SSS PESO Fund – A Guide

What is SSS?

Employees in the Philippines have access to social insurance through the Philippine Social Security System (SSS). The SSS is a government organization established in 1957 and offers retirement and health benefits to all Filipinos who have been paid in full.

 

An individual must be employed, self-employed, or volunteer to join the SSS. The employee’s contributions must be taken out of their pay by the employer and sent to the SSS along with the employer’s portion.

 

Various benefits, including retirement, disability, survivors, and funeral benefits, are available to SSS members. Additionally, they have the right to get other benefits like loans and health care.

 

Nowadays, investing is a common technique to make money. However, the risks involved are substantial. Therefore you must be extremely careful and astute before entering the world of investing to ensure that you place your money with the correct people.

 

When making your initial investment, members of the SSS P.E.S.O Fund (Personal Equity and Savings Option) might consider it. Since SSS is legitimate and trustworthy, we can all agree that your money is in good hands.

 

The SSS P.E.S.O Fund program offers its members the chance to contribute more and save more money, resulting in future rewards. If you have a keen eye for the future, invest!

Mins to Read: 12 minutes

Age: 18-54 years old

“As important as the funds are, the vision is the greatest gift.” – Niel Young

 

Here’s some information about SSS PESO Fund:

What is SSS PESO Fund?

The SSS P.E.S.O. (Personal Equity and Savings Option) Fund is an investment program offered by SSS (Social Security System) and provides members of its Regular SSS Program.

 

The optional savings option, known as the “second savings for pension,” is one that members may elect to use in addition to their regular payments. By contributing more and saving more, SSS members have a greater chance of achieving financial independence thanks to this investing program.

 

Eligibility to Join the SSS PESO Fund?

All employees, self-employed (SE), voluntary (VM), and OFW members who meet the requirements can participate in the program:

• 54 years old and below
• Must have six (6) consecutive months of paid contribution for the last 12 months
• Have not filed any claim under the SSS Program
• Must have paid maximum contribution amount under SSS regular program (self-employed, voluntary members, and OFW)

 

How is the SSS PESO Fund Allocated?

Your contributions will be disbursed to the lists below.

1. Retirement and Disability

– 65% of your contribution’s fund

2. Medical

– 25% of your contribution’s fund

3. General Purpose

– 10% of your contribution’s fund can be for housing, education, livelihood, or unemployment.

 

Each of these accounts earns different rates of return. It is because SSS would invest in numerous ways. 65% of your funds are transferred to the Retirement/Total Disability account, which is invested in 5-year Treasury bonds (T-bonds). Early withdrawals from this account are not permitted. The Medical Account receives 25%, while General Purpose Account receives 10%. They both hold 364-day Treasury bills (T-bills).

 

How to Contribute to the SSS PESO Fund?

As long as you also contribute similarly to your Regular SSS account, members are free to make contributions whenever they like.

Self-Employed, Voluntary Members and OFW employees must contribute the highest monthly amount allowed by Regular SSS, Php 2,400, to be eligible. After enrolling, customers can transfer the corresponding sum to their PESO Fund account.

 

The SSS PESO Fund accepts contributions starting at P1,000.00 for every payment and going up to P500,000.00 annually. Any additional contributions must be made in multiples of P100.00. Any sum that is less than the minimum that does not come in multiples of P100.00 or is greater than the maximum will not accrue interest and will be automatically refunded.

 

Withdrawals and Account Maturity

When you, a member, successfully file for retirement or total disability, in addition to the benefits you will receive under the ordinary SSS program, you will also receive your contributions to the PESO Fund plus any earnings made during the investment period. But, once you file for Total Disability or Retirement under the Regular SSS Program, your SSS P.E.S.O. Fund account terminates.

 

Once you have successfully retired, you will get your contributions and interest profits.

 

You can choose to receive your real contribution and profits as a lump payment, a monthly pension, or a mix of the two. The member’s designated beneficiaries will be given an equal share of the member’s total contributions and earnings in the event of death.

 

SSS permits withdrawals of up to 35% of your real contribution before the maturity date; up to 25% may be used for medical expenses, and up to 10% may be used for other purposes. It should be noted that you will be assessed management costs and a related penalty if you leave before completing your fifth year of membership.

 

How to Join the SSS PESO Fund?

Even if you have only recently begun working, the PESO fund can aid your retirement savings. However, it’s not as simple to take money out of it is not as simple as it is from a savings account. At the same time, investors with a more aggressive risk profile might find it to rise too slowly.

You can sign up at any SSS location or online if you plan to invest in the PESO fund.

 

Here is the step-by-step process for opening an SSS PESO Fund Account:

Step 1: Login to your SSS Account.

Step 2: Tap “E-Services” followed by “P.E.S.O Fund.”

Step 3: You will be notified when you are qualified or not (with the reason) to open an SSS PESO Fund account.

Step 4: Fill in all the required detail by the system to know if you are qualified.

Step 5: Continue with the registration process. Double-check all the details to avoid any problems.

 

If you have a keen eye for the future, investing in the SSS P.E.S.O Fund is wise if you want a safety net for retirement. There are, of course, many additional investment opportunities available in the Philippines, but you’ll need to examine them to avoid conflicts.

 

Why is it Good to Invest in the SSS PESO Fund?

Let’s now estimate. The estimates represent an approximation of the growth of your funds. The assumed time horizon is 20 years. Because the profits are guaranteed, it is picked. A shorter time horizon—typically five years—is chosen if they are not.

 

The assumed fund growth rates are at 3.75%, 1.85%, and 1.85% per annum for Retirement accounts, Medical accounts, and General Purpose account, respectively. Additionally, fees are not mentioned because they are not actually clear or fully disclosed in any of the SSS-released publications.

 

It’s important to remember that these are only estimations. They are not real returns, though. Additionally, the rate of return is subject to change without notice. Making projections is simply done for the sake of comparison and illustration.

 

Saving the Minimum

The fund must have a minimum initial investment of 1,000 pesos. Suppose you recently started an account by depositing the starting capital. And you somehow forget to put extra effort into it. In that instance, the estimate is concentrated on the growth of the starting capital. Consider putting the money in a bank account for the subsequent 20 years.

 

You can also see a comparison in the table. The other columns represent a 2,000 peso saving.

 

YEAR	SAVINGS	TOTAL	SAVINGS	TOTAL
1	1,000	1,025	2,000	2,049
2		1,050		2,100
3		1,076		2,152
4		1,103		2,206
5		1,130		2,260
10		1,279		2,558
15		1,449		2,898
20		1,644		3,287

 

You can see that over 20 years, a 1,000 peso savings grows to 1,644 pesos. that represents an increase of around 64.4% above what is saved in a bank. When you save 2,000 pesos, the same thing happens. The amount will eventually increase to 3,287 pesos.

 

For instance, if you deposit the money in a bank savings account, the balance will only increase by 5.12% over 20 years to 1,051.21 pesos for a saving of 1,000 pesos and 2,102.41 pesos for a capital investment of 2,000 pesos.

 

Saving Monthly

Of sure, most people prefer to increase their income and savings. One strategy is to budget a small amount each month.

 

Let’s say you can set aside 1,000 or 2,000 pesos every month. This translates to 12,000 or 24,000 pesos at the end of the year. The sum would increase to 240,000 or 480,000 pesos in 20 years.

 

YEAR	1K/MO	TOTAL	2K/MO	TOTAL
1	12,000	12,137	24,000	24,274
2	24,000	24,577	48,000	49,154
3	36,000	37,329	72,000	74,658
4	48,000	50,402	96,000	100,803
5	60,000	63,803	120,000	127,606
10	120,000	136,069	240,000	272,138
15	180,000	218,024	360,000	436,049
20	240,000	311,082	480,000	622,164

 

As you can see, the money grows over a 20-year period. 240,000 pesos in total savings are converted to 311,082 pesos, and 480,000 pesos are converted to 622,124 pesos.

 

Three things should be paid attention to. You can enhance the net savings at the end of two decades by making a monthly contribution. Additionally, investing in the PESO fund allows you to earn additional money.

 

Saving Semi-Annually

You could also wish to experiment with saving every six months rather than monthly to observe how the fund develops. The numbers would be different if that were the case.

 

You can set aside at least 6,000 or 12,000 pesos every two months. You can continue doing this continuously for 20 years. Additionally, you decide against opening a bank account for this purpose and instead invest in the Social Security System P.E.S.O fund.

 

YEAR	6K/SEMI-ANNUAL	TOTAL	12K/SEMI-ANNUAL	TOTAL
1	12,000	12,074	24,000	24,148
2	24,000	24,448	48,000	48,896
3	36,000	37,131	72,000	74,261
4	48,000	50,130	96,000	100,259
5	60,000	63,454	120,000	126,908
10	120,000	135,270	240,000	270,540
15	180,000	216,652	360,000	433,304
20	240,000	308,984	480,000	617,968

 

In contrast, you can possibly save the same amount as with the monthly strategy. However, if you do it semi-annually, the rewards are much lower.

 

Your money still has a chance to make money. At the end of 20 years, the 240,000 pesos you saved will be worth 308,984 pesos, and the 480,000 pesos will be worth 617,968 pesos.

 

Saving Annually

So saving once a year can also be a method if you don’t have any other financial plans or if you are storing up money for a major buy in the future.

Let’s say you can save at least 12,000 or 24,000 pesos for the estimation.

 

YEAR	12K/YR	TOTAL	24K/YR	TOTAL
1	12,000	12,000	24,000	24,000
2	24,000	24,296	48,000	48,592
3	36,000	36,896	72,000	73,793
4	48,000	49,809	96,000	99,618
5	60,000	63,042	120,000	126,084
10	120,000	134,329	240,000	268,658
15	180,000	215,036	360,000	430,072
20	240,000	306,517	480,000	613,035

 

Saving every year shows that your money increases to 306,517 and 613,035 pesos, respectively.

 

Saving One-time Big Time

What happens if you save large one-time savings?

If you have any extra money, you’d like to store up, investing heavily and letting it grow for 20 years can be a great plan.

In that situation, it is assumed that you can set aside 100,000 pesos in the Social Security System (SSS) P.E.S.O. fund.

We’ll examine the development of a 200,000 pesos one-time investment as a benchmark.

 

YEAR	SAVING	TOTAL	SAVING	TOTAL
1	100,000	103,000	200,000	206,000
2		106,090		212,180
3		109,273		218,545
4		112,551		225,102
5		115,927		231,855
10		134,392		268,783
15		155,797		311,593
20		180,611		361,222

 

Your savings might increase to 180,611 pesos with a one-time investment of 100,000 pesos, and to 361,222 pesos after a 20-year commitment of 200,000 pesos.

 

Whatever course of action you choose, getting started is crucial. It would help you increase your investments even faster if you could consistently save a little money now and then.

 

Payment Options for SSS P.E.S.O. Fund Contributions

1. SSS Offices

Payments over the counter can be made at the nearby SSS branch. All you need to do is submit your payment and a properly completed P.E.S.O. Fund payment form.

 

2. GCash

You can now conveniently pay contributions through GCash. Here’s how:

Acquire a Payment Reference Number (PRN). Every time you contribute, you must get a new set of numbers because this one is exclusive and only good for one payment transaction.

1. Launch the GCash app. Choose “Pay Bills” from the menu.
2. Choose “Government” from the list of bill payment categories.
3. Choose “SSS-PRN” from the list of government organizations.
4. Account Type, Payment Reference Number, Amount, and email address must all be entered on the online transaction form.
5. To complete the purchase, click “Next.”
6. Examine the specifics and validate the transaction.
7. You will be notified through email and SMS when the transaction is finished. The payment will be immediately posted to your account because you used a PRN to make your payment. By going into your online SSS account, you can verify it.

 

3. Partner Banks

You can also pay online or over-the-counter at the following partner banks of SSS:

• AUB
• Bank of Commerce
• PNB Savings Bank
• Rural Bank of Lanuza
• UnionBank
• Wealth Bank

4. Bills Payment Centers

SSS has also partnered with the following bills payment centers:

• Bayad Center
• SM Business Center
• SM Hypermarket
• Savemore
• ECPay

 

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