MANILA, Philippines – The Social Security System (SSS) marked 2025 with a landmark three-year pension reform that will increase benefits without increasing contribution rates.

Starting September 1, the state pension fund raised retirement and disability pensions by 10%, while death and survivor pensions will be increased by 5%.

SSS president and Chief Executive Officer Robert Joseph Montes De Claro said the state pension fund will carry out the second tranche of pension hikes on September 1, 2026. The final wave of pension hikes will take effect in September 2027.

By the end of the three-year program, benefits for retirement and disability pensioners will have increased by 33% while death and survivor pensioners’ benefits are estimated to grow 16%. This will cover over 3.8 million SSS pensioners, including 2.6 million retirement or disability pensioners and 1.2 million survivor pensioners.

Apart from pension increases, the SSS also aims to launch a micro loan program in early 2026. Its emergency loan program with a 7% interest rate from the original 10% will also be available until December 2026 or until the state of national calamity is lifted.

Impact on fund life

De Claro earlier said the pension hike will shorten its fund life to 2049 from 2053. But he is confident that this will be offset by stronger cash flows from previous contribution increases and enhanced collection efforts.

“Our actuarial team confirms that the fund remains financially sound. We are committed to restoring fund life back to 2053 through coverage expansion and improved collection efficiency,” he said.

The SSS in January implemented a 1% contribution hike to 15% from 14% as part of a rate hike that started in 2019.

As of September 2024, the SSS has nearly P55 billion in assets and has P11.3 billion in reserves for the future payment of employee compensation claims.

De Claro previously said they expect SSS’ net income growth to slow down in 2025 as the fund implements the three-year pension hike. However, he remains optimistic that the pension fund will make at least P100 billion.

The SSS made a P90.2 billion profit in 2024, with earnings from the fund’s investments contributing more than half of its bottomline.

The SSS currently has around P500 billion invested in long-term government securities while the remaining 45% of the fund’s portfolio is invested in the capital market and real estate. (READ:  SSS invests P500 million in Century Properties) – Rappler.com