QuestionsQuestions (PRESIDENTIAL DECREE NO. 1636)
The Commission may provide for feasible increases in benefits and addition of new ones, but actuarial stability/solvency of the reserve fund must be guaranteed, and such increases shall not require any increase in contribution.
Replacement ratio is defined as 20% plus the quotient obtained by dividing 300 by the sum of 340 and the average monthly salary credit.
For those covered prior to January 1975: 1975 minus calendar years of coverage, plus the number of calendar years from January 1975 to the calendar year containing the semester prior to the contingency where 6 or more contributions were paid.
For those covered in or after January 1975: the number of calendar years in which 6 or more contributions were paid from the year of coverage up to the calendar year containing the semester prior to the contingency.
Coverage is compulsory for all self-employed persons earning at least ₱1,800 per annum, subject to rules determining effectivity of coverage for certain groups and subject to Section 10(b) for specified categories.
The listed categories include: (1) self-employed professionals licensed by the PRC (including lawyers licensed to practice law); (2) partners and single proprietors; (3) actors/actresses, directors, script writers, and news correspondents not falling under the employee definition; (4) professional athletes/coaches/trainers licensed by the Games and Amusement Board, and jockeys/trainers licensed by the Philippine Racing Commission. It is significant because their coverage takes effect based on the delayed start rule in Section 10(b) (first day of January following the year started, but not earlier than Jan 1, 1980).
Compulsory coverage of the employer takes effect on the first day of his operation; employee coverage on the day of employment. For the self-employed categories under Section 10(b), effectivity is the first day of January following the calendar year they started practice/business operations, but not earlier than January 1, 1980.
If the self-employed realizes no net professional or business income in any calendar year, he is not required to pay contributions for the succeeding year. He may continue paying under the same rules applicable to separated covered employees.
Monthly pension equals: (1) average monthly salary credit multiplied by the replacement ratio, plus (2) 1.5% of the average monthly salary credit for each credited year of service in excess of ten years.
Monthly pension shall not be less than ₱120 and shall not be paid in aggregate amount of less than 60 times the monthly pension (except to a secondary beneficiary). Surviving pensioners’ monthly pension is increased by 20%.
He must have paid at least 120 monthly contributions prior to the semester of retirement and: (1) reached age 60 and not receiving monthly compensation of at least ₱300; or (2) reached age 65. Then he is entitled to a monthly pension for as long as he lives.
Dependents born before retirement of a marriage subsisting when the member was 57 years old are entitled to dependents’ pension.
He is entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf, provided he is separated from employment and not continuing payment of contributions to the SSS on his own.
If re-employed and less than 65 years old, the pension is reduced by an amount equivalent to one-half of his earnings over ₱300. The employee again becomes subject to Section 18 and his employer to Section 19 of the Act.
Primary beneficiaries receive: (i) monthly pension and dependents’ pension only if the employee had at least 36 monthly contributions prior to the semester of death. If conditions are not satisfied, primary beneficiaries get a lump sum benefit equivalent to 35 times the monthly pension; if there are no primary beneficiaries, secondary beneficiaries get 20 times the monthly pension. Minimum death benefit is not less than total contributions (employee and employer) nor less than ₱1,000; beneficiaries of a covered employee who dies without at least three monthly contributions get the minimum benefit.