Ronaldo Torres (not his real name) had been employed with a chemical company for seven years when he turned 65 years old in February 2015. Because of Torres’s age, the company stopped deducting and remitting his contributions to the Social Security System (SSS). While Torres had a date of coverage of November 1983, he only had 116 monthly contributions to his account at that time. In order to qualify to a retirement pension from the SSS, he should have contributed at least 120 monthly contributions.
The issue at hand is whether an employer should automatically stop deducting and remitting the social security (SS) and employees’ compensation (EC) contributions for an employee who has reached the mandatory age of retirement of 65 while still employed.
An employer cannot be compelled to pay the SSS contributions of its employee who has reached the technical retirement age of 65. However, it may voluntarily do so as part of a mutual agreement or as a form of benefit or special concession for the employee, especially considering that the employee only has a few months to go before reaching the required 120 months contribution to be eligible to a retirement pension.
The mandatory retirement age is 65 and, with it, the legal obligation of the employer to pay SSS contributions of the member ends. At this age, the employer has every right, in fact, to sever the employment of a worker. This is so because continuous employment would mean not only SSS contributions, but also EC, Philippine Health Insurance Corp. and Pag-IBIG contributions, among other benefits that an employee is entitled to and the employer is obliged to give.
Moreover, at age 65, the SSS is mandated to pay the member his or her retirement benefit regardless of whether he is still employed. If the member does not have the required 120 months contributions, his retirement benefit can be paid out in lump sum. However, if the member wishes to avail himself or herself of a pension benefit, then he must pay the remaining required contributions on his own.
Thus, in the case of Torres, he can opt to continue paying his contributions for four more months in order to qualify to a retirement pension from the SSS or he can seek his employer’s benevolence to continue paying on his behalf.
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For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS call center at 920-6446 to 55, which accepts calls from 7 a.m. on Monday all the way to 7 a.m. on Saturday.
Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante.bmirror@gmail.com.
1 comment
Hi,
What if employee is qualified to retire and is above 65 years old but is till employed. Should the SSS contribution stop or is it okay to continue?What will happen to the excess contribution above 65 years old?
Thank you,
Ali