THE SOCIAL Security System (SSS) is implementing a landmark pension reform program starting this September, which will gradually increase the monthly pensions of all pensioners over a three-year period.
The Social Security Commission (SSC) approved the SSS Pension Reform Program, which features a structured, three-year increase in pensions for all SSS pensioners, on July 11.
This is the first multi-year adjustment of pensions in the SSS’ 68-year history.
“After careful actuarial review, we are rolling out a rational and sustainable pension increase that uplifts all pensioners without compromising the fund’s actuarial soundness,” SSS President and Chief Executive Officer Robert Joseph M. De Claro said in a statement.
Starting this year, all pensioners as of Aug. 31, 2025, will receive annual pension increases every September until 2027.
The pension for retirement and disability pensioners will be raised by 10% every September until 2027. The pension for death or survivor pensioners will be increased by 5%.
“After three years, pensions will have increased by approximately 33% for retirement/disability pensioners and 16% for death/survivor pensioners,” the SSS said.
Around 3.8 million pensioners will benefit from the pension reform. This includes 2.6 million retirement/disability pensioners and 1.2 million survivor pensioners.
The SSS said the pension reform program “will not necessitate any contribution increase.”
Mr. De Claro said the actuarial team confirms that the pension fund “remains financially sound.”
Quoting its chief actuary, the SSS said the reform will slightly shorten the fund’s lifespan — to 2049 from 2053 previously, but this is offset by strong cash flow from previous contribution reforms and better collection efforts.
Mr. De Claro said they are “committed to restoring fund life back to 2053 through coverage expansion and improved collection efficiency.”
Finance Secretary Ralph G. Recto, who chairs the SSC, said the pension hike will help spur economic growth as pensioners will have additional spending power.
The SSS estimated the pension hike will inject around P92.8 billion into the Philippine economy from 2025 to 2027, but the Department of Finance (DoF) estimated this could reach up to P117.2 billion.
“For retirement pensioners aged 60-89 (99.4% of all retirement pensioners), around P4,923 is the average monthly pension just before implementation of this reform program. Such a pension amount will grow to about P6,548 after the third tranche of pension increase — an increase of P1,625 or 33%,” the DoF said.
“After three years of pension increases starting September 2025, SSS will have paid about P41,145 in additional pensions to such average retirement pensioner,” it added.
Meanwhile, the SSS said it is able to implement the pension reform due to strong cash flows from the increase in incremental contribution rates that was completed in January 2025.
Under Republic Act No. 11199 or the Social Security Act of 2018, the SSS implemented incremental contribution rate hikes of one percentage point every two years starting in 2019 from the original contribution rate of 11%. — AMCS
