The Social Security System (SSS) is set to introduce a groundbreaking pension reform program beginning this September that will incrementally raise pensions over a three-year period. The Social Security Commission (SSC) approved the initiative on July 11, marking the first multi-year pension adjustment in the agency's 68-year history.

SSS President and CEO Robert Joseph M. De Claro explained, "Following thorough actuarial analysis, we are implementing a sustainable and equitable pension increase that benefits all pensioners while maintaining the fund's financial stability." Starting in 2025, all pensioners registered by August 31 will receive annual pension hikes every September through 2027.

Retirement and disability pensions will see a 10% increase each year, culminating in a total raise of roughly 33% after three years. Meanwhile, death or survivor pensions will grow by 5% annually, amounting to a 16% increase by 2027. Approximately 3.8 million pensioners, including 2.6 million retirement and disability recipients and 1.2 million survivor pensioners, stand to benefit from the reform.

Importantly, the SSS confirmed that this adjustment will not require an increase in contribution rates. "Our actuarial team assures that the pension fund remains financially sound," De Claro stated. Although the reform will slightly reduce the fund's projected lifespan from 2053 to 2049, this is balanced by stronger cash flows due to previous contribution rate increases and improved collection efforts.

De Claro added, "We are dedicated to extending the fund's viability back to 2053 through expanding coverage and enhancing collection efficiency."

Finance Secretary Ralph G. Recto, who chairs the SSC, highlighted the broader economic impact: "The pension increase will boost the purchasing power of millions, injecting significant funds into the economy and encouraging growth." The SSS estimates the reform will contribute approximately ₱92.8 billion to the Philippine economy from 2025 to 2027, with the Department of Finance projecting up to ₱117.2 billion in economic stimulus.

The average monthly pension for retirement beneficiaries aged 60 to 89, currently around ₱4,923, is expected to rise to about ₱6,548 after three years—an increase of ₱1,625 or 33%. Over the three-year period, a typical pensioner will receive an additional ₱41,145 in total pension payments.

This reform has been made possible by substantial cash inflows resulting from the incremental contribution rate hikes mandated under Republic Act No. 11199 (Social Security Act of 2018). Contribution rates have increased by one percentage point every two years since 2019, rising from 11% and culminating in the latest adjustment in January 2025.