Friday, September 26, 2014

Social Security System (SSS) Reveal Provident Fund for Members - SSS PESO Fund

The Social Security System (SSS) has launched last September 25, 2014 a voluntary provident fund program that offers its members an additional way of saving for their retirement. 

According to SSS President and Chief Executive Officer Emilio S. de Quiros, Jr, the new retirement savings called the SSS Personal Equity and Savings Option (SSS PESO) Fund is an alternative and tax-free investment that would help members accumulate adequate income in retirement and earn a reasonable rate of return. The SSS PESO was created in accordance to Sec. 4(a)(2) of the Social Security Law.

"SSS PESO savings can be used to supplement the benefits available under the regular SSS program. It offers guaranteed earnings based on rates higher that those at brick-and-mortar banks." De Quiros said.

The SSS PESO fund is open to all members below 55 years old with six consecutive SSS contributions within the last 12 months prior to enrollment and have not yet filed final claims with the SSS. Qualified members can participate for a minimum contribution of Php.1,000 up to a maximum of Php100,000 per year.

De Quiros also added, that "One's membership will start upon receipt of first contribution, Succeeding SSS PESO fund contributions can be made anytime as long as there is a corresponding SSS contribution on the month of contribution".

Self-employed, voluntary and OFW members are qualify if they are paying the maximum SSS contribution and also need to pay the maximum SSS contribution for the month they are to save in the SSS PESO fund.

The savings in the SSS PESO Fund are invested in sovereign guaranteed investments, where 65 percent of the total fund is allocated for retirement, and 35 percent is for medical and general purposes. SSS PESO accounts will be charged a one-percent administration fee annually.

Besides, the portion for retirement is guaranteed to earn income based on interest rates of five-year Treasury yield, while earnings of the fund allotted for medical and general purposes will be based on 364-day Treasury bill rates.

The SSS President also added that aside from the guaranteed earnings, SSS PESO Fund members may also get excess earnings, which will be credited automatically to their accounts, depending on the actual year-end performance of the SSS PESO Fund.

Savings in SSS PESO fund can be withdrawn upon the member's effective date of retirement or total disability with the SSS either in monthly pensions over a minimum period of 12 months and Php1,000 payment per month, in lumpsum, or contribution of both.

If members need to withdraw funds early, they may only touch the portion of their equity allocated for medical and general purposes, and it will be subject to penalties and service fees if withdrawn earlier than five years and if a member died before the maturity of his SSS PESO savings or expiration of the pension period, the member's beneficiaries will received the savings in the form of death to be paid in lumpsum.


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