Q. Hello Atty Wong! Meron lang sana akong inquiry ulit sa iyo Atty. Wong. While in Canada, I continued paying my SSS premium contribution thru voluntary scheme program, now that I already reached my 60’s, I was informed by the SSS office that I have a option whether to wait getting my pension benefits until I reached 65 and continue paying my voluntary contribution until 65 or apply for early retirement benefits getting in the form of Lump sum.
Ano kayang mas maganda Atty.? kasi kung hantayin ko pa hanggang 65 na kukunin ang monthly SSS pension, of course malalaman ng Government of Canada na may tinatanggap na SSS pension sa PH.
Baka babawasan din nila ang OAS na matatanggap ko dito, where as kung kunin ko na lump sum ngayon at least ma enjoy ko na wala na silang makikita na ibang pension na tinatanggap ko.
Ito lang Atty Wong ang gusto kong tanungin sa iyo and what is the best option? Lump sum or monthly pension?
Thanks again Atty. Wong for your precious time for getting in touch. For sure Atty. we will drop by to visit you in your office in Manila once we’re in town for a vacation. Have a wonderful day, God Bless po! Sincerely, Freddy .
Ans: Hello Freddy, under the SSS law in the Philippines, if a member who has paid at least 120 monthly contributions and upon reaching 60 years of age, may opt to apply for optional or early retirement. The mandatory retirement is 65 years of age.
You are now in quandary whether to avail of the optional retirement or continue paying your monthly SSS contribution until you reach the mandatory retirement age of 65 years.
As to which options would be best for you is a judgment call on your part. And considering further that I am not privy of the details of your retirement plans and the supposed SSS retirement benefits, such as how long have you been paying and the amount of monthly premium you are paying. Such factors will have a bearing in your retirement benefits and pension.
There are pros and cons on the issue. If your option for an early retirement, upon reaching 60 years, you could enjoy your retirement benefits and make use of your money. If you take this option, under the SSS policy, a retiree-member has the option to receive the first 18 months’ pension paid out in lump sum, but discounted at a preferential rate of interest to be determined by the SSS.
The member shall start receiving his pension on the 19th month, and every month thereafter. This option for advance payment shall be exercised only when filing the first retirement claim. It is only the advanced pension payments that are discounted on the date of payment; the dependent’s allowance and 13th month pension are excluded from the advanced 18-month pension amount.
On the other hand, should you prefer to continue paying your SSS monthly contributions, until reaching 65 years, the obvious downside being that we are not even sure what will happen in future? This is crucial especially where one is confronted with health issues and may not live long enough or may be incapacitated to enjoy his or her pension in the future by the time he or she reaches 65 years of age.
Based on the results of the findings in a similar queries before, there is really no substantial difference in terms of the monthly pension should one opt to retire before reaching 65 years or continue paying the SSS premium until the compulsory retirement of 65 years.
However, let me reiterate that such difference may or may not be an issue depending on the financial circumstances or preferences of the concerned retiree.
As to your other concern that your Old Age Security pension in Canada may be adversely affected should you avail of your early SSS retirement, it is suggested that you confer with our Philippine Consulate in Toronto in conjunction with the international agreement entered into by the Philippine(SSS) and the government of Canada’s pension authorities as regards the portability of SSS and Canadian pensions and retirement of benefits of the respective of citizens of Canada and the Philippines. This agreement originally came into effect on March of 1997 and the Supplemental Agreement on July 1, 2001.
You may also directly inquire with the Canadian pension authorities as well as with the SSS head office in the Philippines and confer with them whether your SSS retirement benefit will result in the diminution of your Old Age Security (OAS) benefits in Canada.
This representation is of the view that since your SSS benefits and pension are not considered as compensation or business income and are therefore exempt from taxation under the Tax Code of the Philippines, your receipt of such pension should not have adverse effect on your OAS benefits in Canada. Nonetheless, it is suggested that you confer this issue with the Canadian pension authorities.
The information that you may secure as suggested above, could provide you with the necessary basis towards an informed decision relative to your queries.
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