Comfortable retirement?

It is becoming more apparent that most of the Filipinos who are presently employed still do not want to retire. They may want to change gears and possibly pursue other dreams, but they definitely don’t want to stop moving!

In the recent report of the Philippine Franchise Association, chairman emeritus Samie Lim has noted that Filipino retirees are among the top subscribers of franchise businesses. In a random survey I made among people on the street, eight out of ten still wanted to continue to work. With most of them coming from private companies, they intend to continue working even after they retire, whether it be through a mandatory age or an early retirement.

“What’s there to do?” Ana (not her real name) a former banker told me when I asked if she was excited to retire now that she was closing in on the mandatory.

“I have been so used to working, I do not think I can stop. Maybe this time I will chase my passion and be my own boss. But I will definitely not stop working!”

There are many people like Ana. Who upon retirement, find themselves sitting at home, watching television, playing games on their gadget, and doing gardening when they finally get to lift their butts from the couch. But after a while, when the lazy bones have been satisfied, the brain begins to wonder about the waste of talent. Not to mention the slowly depleted savings – if one had any – and retirement pension.

Many of my friends have engaged themselves into selling. Whatever it is. Whether it be books, insurances, credit cards, memorial plans, or memorial estates. Others have gone lucrative in property engagements and have qualified to be brokers. While others have set up their own small business of food. And only those who stay on, and have the right acumen in business survive. The others, just give up after having to wake up early for marketing and sleeping late for shop closes and inventories.

In the small circle that I have randomly asked, those who were looking forward to retirement were mainly those who had been in government service for a while. Either as teachers, accountants, clerks or government service personnel. It is because under the Government Service Insurance System, employees who last for 35 years or more  are able to get 90% of their average monthly compensation granted that they have paid all their premiums for all those years of service. If they have been in service for less than 35 years then they get a commensurate compensation based on the computation of .025 periods with premium payment (PPP)  multiplied by the average monthly compensation (AMC) + 700.  Or to sum the formula given to me by Ms. Mitos Galicinao of GSIS, the computation would be .025 PPP x AMC + 700.  The basis for average salary is based on the compensation of the last three months of the employee.

For those who are under the Social Security System, people under private employment, may upon retirement get a fixed amount, depending on their  number of remitted contributions which normally is 4% of one’s salary but not exceeding the ceiling amount of P20,000 (based on RA 111-99 as of April 2019) prior to which the base amount was P16,000. This contribution is called the Monthly Salary Credit.   

It is a misconception that the retiree may get a pension of P16,000 or P20,000 a month.  The amount is still dependent on the amount contributed based on the ceiling salary of P20,000.  Confusing?  Well, yes!  But perhaps if you do want to know what you can reap at the end of your employment in the private sector, it would be safe to go to your nearest SSS Office.

It is no wonder why most of those in the private sector maximize their employment age to 65 because of the fear of losing the benefits that come with their attachment to their company.  When one loses employment he loses his HMO unless he has enrolled in a similar package with an insurance firm. 

In the Philippines, regular employment is limited to 65 because of the human consideration of providing adequate rest for the senior citizens. However because most of us are not prepared with adequate savings and health plans, retirement looks daunting.

In other countries like the US and Australia for instance, employees can work for as long as they like, and for as long as they are capable. And their retirement package is likewise sustainable. Although it is true that their taxes are high, still, the needs of their aging population are met.

My wish is that government will consider following the formula of GSIS on the SSS members. Perhaps with a bit of adjustment for the employer, maybe maintain the base percentage for them as the employees can voluntarily increase their own contributions to get a rather comfortable retirement plan instead of enrolling in private insurance companies who sometimes close down before the subscriber can get his investment back.

Perhaps this can be considered for our young. For we in the golden years, may not longer be able to benefit from the policy changes ruled today.

A good part though is that we have far more better Senior Citizen benefits than some of our counterparts in Asia. Well, at least, we have that.