Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL NO. _1641

Introduced by Representative Paolo Henry M. Marcoleta

EXPLANATORY NOTE

Overseas Filipino Workers (OFWs) are called modern-day heroes for
many reasons. Among said reasons is the significant role they play in nation-
building and revitalizing the nation’s economy, with their remittances
contributing as much as 20% to the gross domestic product. In 2024, remittances
represented 8.3 % of the country’s Gross Domestic Product' with over USD
$38.34 billion in remittances back to the Philippines, marking a 3% increase from
the USD $37.21 billion recorded in 2023.?

According to the World Bank, the Philippines ranked fourth among the top
remittance-receiving countries in 2024. However, despite their substantial
contribution to our economy, their future remains uncertain as they enter their
later years and approach retirement.

Currently, the Social Security System (SSS) program for OFWs is purely
voluntary. It offers limited pension benefits, which are only accessible upon
reaching the age of 60. There is no legislation that allows OFWs to receive
retirement benefits at an earlier age or to access voluntary separation pay.

Unlike regular SSS members, the employment of an OFW is contractual
and typically for a short, uncertain duration. Many OFWs, such as domestic and
construction workers, face difficulty in finding reemployment after the age of 45,
while performing artists often struggle to secure work past the age of 35. It is
therefore unrealistic for these workers to wait until the age of 60 to claim their
pension benefits under the current SSS program.

* Personal Remittances Reach a Record High of US$3.7 Billion in December 2024.
? OFW Remittances in the Philippines Hit Record USD $38.34 Billion


Our modern-day heroes deserve better. They deserve to receive appropriate
benefits and greater security once their employment comes to an end, or when
they choose to finally return home and retire.

The existing framework calls for substantial reforms to address the plight
of our unsung heroes of today.

This bill seeks to establish a retirement system that will provide OFWs
with the financial means to invest in a business or pursue other productive
ventures once they decide to retire or separate from their employment.

This measure shall establish the Overseas Filipino Workers Retirement
System which will provide retirement benefits and welfare assistance to OFWs
and their dependents.

In light of the foregoing, the immediate passage of this bill is earnestly
sought.

PAOLO HENRY M. MARCOLETA
Representative, SAGIP Partylist


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL No. _1641

Introduced by Representative Paolo Henry M. Marcoleta

AN ACT
ESTABLISHING THE OVERSEAS FILIPINO WORKERS SOCIAL
SECURITY AND RETIREMENT SYSTEM, AND
APPROPRIATING FUNDS THEREFOR

Be it enacted by the Senate and the House of Representatives of the Philippines
in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as “Overseas Filipino
Workers Retirement System Act.”

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the
State to protect and promote the welfare of overseas Filipino workers. Towards
this end, there is a need to pioneer and develop innovative means to provide
incentives designed to uplift their standard of living as well as those of their
families.

SEC. 3. Definition of Terms. — For purposes of this Act, the following
terms shall mean:

a. Beneficiaries or Beneficiary refers to the dependent spouse of an OFW, his
dependent children, whether legitimate or illegitimate, who shall be the
primary beneficiaries; or in their absence, the dependent parents; or in the
absence of the foregoing, the person designated by the OFW;


b. Dependent refers to the legitimate. legitimated or legally adopted child
who is unmarried, not gainfully employed, and not over twenty-one years
of age, or over twenty-one (21) years of age but is incapable of self-support
due to a physical or mental deformity or condition; legitimate spouse
dependent for support upon the employee; and the legitimate parents
wholly dependent upon the covered employee for regular support;

c. Employer for the purposes of this Act, may refer to the OF W’s direct
employer, the foreign recruitment agency (FRA), the Philippine
recruitment agency, or the manning agency as determined by the
Department of Migrant Workers (DMW);

d. Non-documented OFW refers to an overseas Filipino worker who does not
have valid contract of employment nor possesses the necessary documents
to work abroad; and

e. Overseas Filipino Worker (OFW) refers to a Filipino citizen with a valid
contract of employment outside the Philippines through a legitimate
agency or employer and who possesses the necessary documents to work
abroad.

SEC. 4. Overseas Filipino Workers Social Security and Retirement System.
~ To carry out the purposes of this Act, the Overseas Filipino Workers Social
Security and Retirement System, herein referred to as the “System”, is hereby
established which shall cover all documented OF Ws who are duly registered with
the DMW.

SEC. 5. Objectives — The System shall have the following objectives:

a. Provide retirement benefits and welfare assistance to OFWs and their
dependents;

b. Develop a savings pension plan to which OFWs can contribute part of their
earnings in order to protect them against the risks of old-age, disability,

sickness, death, and unemployment;

c. Ensure the viability of the funds of the System; and


d. Establish a trust fund which will constitute for the contributions of OF Ws.

The system shall endeavour to strike the right balance in the management

and safekeeping of the funds remitted by OF Ws while extending the benefits of
the System to the OF W beneficiaries.

SEC. 6. Board of Trustees. — The System shall be administered by a Board
of Trustees, hereinafter referred to as the “Board”, which shall be composed of
the following members:

a. Secretary of Migrant Workers, as the ex-officio Chairperson;

b. Secretary of Finance, as the ex-officio Vice Chairperson;

c. Administrator of the Overseas Workers Welfare Administration
(OWWA), as ex-officio member;

d. Director of the System;

. one (1) representative from the land-based overseas workers;

f. one (1) representative from the sea-based overseas workers;

g. one (1) representative from the manning agency sector;

h. one (1) representative from the recruitment agency sector; and

i. one (1) representative from the actuarial or finance industry.

The representatives of the land-based overseas workers, sea-based
overseas workers, manning agency, and the recruitment agency shall be
appointed by the President upon the recommendation of their respective
organizations. They shall be of known competence, probity and integrity. The

DMW shall transmit to the President the recommendations of their respective
organizations.


The representative from the actuarial or finance industry shall be appointed
by the President upon recommendation of the Governance Commission for
Government-Owned or Controlled Corporations (GCG), and must be of
recognized expertise in any field of social security, pension fund, insurance,
investment, banking and finance, or actuarial science, and with at least ten (10)
years of managerial or leadership experience.

The Director shall be appointed by the President and shall serve as the
Chief Executive Officer of the System. Must be a person of known competence,
probity, integrity and recognized expertise in social security, pension fund,
insurance, investment, banking and finance, or actuarial science, and with at least
ten (10) years of managerial or leadership experience.

The term of office of regular appointive members of the Board shall be
three (3) years, which can be extended for another term of three (3) years:
Provided, that they shall continue to hold office until their successors have been
duly qualified and appointed. All vacancies, prior to the expiration of the term,
shall be filled for the unexpired term only.

The compensation, per diems, allowances, and incentives of the appointive
members of the Board shall be in accordance with and subject to the GOCC

Governance Act of 2011 or Republic Act No. 10149.

SEC. 7. Powers and Functions of the Board of Trustees. — The Board of
Trustees shall have the following powers and functions:

a. Provide strategic leadership, guidance and direction to the System;

b. Formulate and adopt measures to ensure the attainment of the System's
mandate, objectives and purposes;

c. Determine and fix the monthly contribution of the OFWs and their
employers;

d. Determine the benefits that will be received by the members, which shall
be proportionate to their contributions;


Ce a od

e. Determine and approve increases in contributions and benefits of
members;

f. Issue rules and regulations to carry out the objectives and purposes of the
System;

g. Approve the organizational structure of the System, including the positions
and salaries of personnel, or initiate the reorganization of the same;

h. Enter into agreements or contracts for such service and aid as may be
necessary for the proper and effective administration of the System;

i. Manage the retirement fund and other sources of the System subject to
pertinent accounting rules and regulations issued by the Commission on
Audit;

j. Adopt from time to time a budget of expenditures for the System, including

its annual budget, which shall not be more than thirty percent (30%) of the
retirement fund;

k. Acquire property, real or personal, which may be necessary for the
attainment of the purposes of this Act;

I. Sue and be sued in court;
m. Establish a performance-based system on the personnel; and

n. Perform such other acts as may be necessary for the effective
implementation of this Act.

SEC. 8. Power and Functions of the Director of the System. — The Director

shall have the following powers and functions:

a. Ensure the efficient and effective administration of the System;

b. Ensure that the welfare of the members is prioritized through efficient and
effective implementation of the programs and benefits of the System;


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. Implement policies and programs formulated by the Board to attain the

objectives and purposes of the System;

|. Ensure that the process of the System is streamline and convenient,

particularly in the availment of pension and benefits by the members or
their beneficiaries;

. Recommend policies and programs for approval by the Board;

Administer the System’s resources efficiently and effectively; and

recommend to the Board of Trustees the annual budget of the System;

. Determine the functions, composition, and compensation of the personnel

of the System;

. Determine the functions, composition, and compensation of the personnel

of the System for the approval of the Board;

. Appoint, transfer, or remove personnel of the System occupying those

lower than managerial positions;

Recommend to the Board the amount of contributions of employers of
land-based and sea-based OFWs after thorough consultations with
stakeholders, including the DMW and OWWA;

. Coordinate all policies and programs relating to OF Ws as provided in this

Act; and
Undertake necessary consultations concerning matters affecting the
welfare of OFWs and their families, and recommend to the DMW policies

and programs relative thereto.

SEC. 9. Personnel Complement. - Subject to the GOCC Government Act

of 2011 or Republic Act No. 10149, the Board shall determine its own staffing
pattern and the number of personnel in the System. The Board shall, in
accordance with existing laws and policies, select, appoint, employ, and fix the


compensation of such officers and employees as may be necessary to carry out
its powers and functions.

SEC. 10. Compulsory Coverage. - The System shall be compulsory upon
all documented OF Ws: Provided, That if an OF W is a member of Social Security
System (SSS) or any similar entity as provided under existing laws, the same may
be transferred to the System, in accordance with Portability Law or Republic Act
No. 7699, and any benefit or benefits accruing to the OF W from such membership
shall be integrated into the System. The OFW, however, may opt to retain existing
membership with the SSS or any similar entity, but the OFW shall still be
mandatorily covered by the System.

Compulsory coverage of the OFW under this system shall take effect on
the first day of his employment in the foreign country.

Non-documented OFWs may avail themselves of coverage under the
System on a voluntary basis. The rules on voluntary coverage shall be determined
by the Board.

Nothing in this Act shall be construed to prevent an OF W from availing of
separate membership with other security or retirement systems, whether public
or private.

SEC. 11. Separation from Employment. - When a covered OFW is
separated from employment, the obligation to pay contributions from that
employment shall cease at the end of the month of separation, but the OF W shall
be credited for all contributions paid and shall be entitled to all benefits provided
in this Act.

The OFW concerned may continue his contribution to the fund on a
voluntary basis. The Board shall issue the necessary guidelines on this matter.

SEC. 12. Retirement Benefits. - All covered OF Ws who had paid at least
one hundred twenty (120) monthly contributions and who have reached the age
of forty-five (45) years shall be entitled to a monthly pension.


The computation of the monthly pension shall be determined by the Board
of Trustees in accordance with the actuarial system of the SSS. Upon the death
of the retired OFW pensioner, his primary beneficiaries as of the date of his
retirement shall be entitled to eighty percent (80%) of the monthly pension.

Provided, that if the OFW has no primary beneficiaries and dies within
sixty (60) months from the start of his monthly pension, the secondary
beneficiaries shall be entitled to a lump sum benefit equivalent to:

a. Thirty-six (36) times the monthly pension - if the member has paid at least
36 monthly contributions prior to the semester of death; or

b. Monthly pension times the number of monthly contributions paid or twelve
(12) times the monthly pension, whichever is higher - if the member has
not paid the required 36 monthly contributions prior to the semester of
death.

SEC. 13. Dependent's Pension. - The dependent's pension shall be
equivalent to ten percent (10%) of the member’s monthly pension. This is paid
for each dependent child conceived/legally adopted on or before the date of
retirement of the member but shall not exceed five (5) in number beginning with
the youngest and without substitution. Provided, that his dependents born, before
his retirement, from a marriage subsisting when the member was forty (40) years
old shall be entitled to the dependent's pension.

SEC. 14. Early Retirement and Voluntary Separation Benefits. - Any OFW
who voluntarily elects in writing to retire prior to the age of forty-five (45) but
has served for at least five (5) years in overseas employment or separated from
the overseas employment shall be paid retirement or separation benefits
equivalent to one and one-fourth (1%) month basic salary for every year of their
respective overseas employment or the nearest equivalent fraction thereof
favourable to them on the basis of the highest salary which they respectively
received in the course of their employment in the foreign country.

SEC. 15. Retirement Fund. - There shall be created an Overseas Filipino
Workers Retirement Fund, hereinafter referred to as the “Fund”, where all OFWs
who are duly registered with the DMW shall remit five (5%) of their gross


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monthly income for at least ten (10) years. The Fund shall be used for the purpose
of providing retirement benefits and similar gratuities to OFW or their
beneficiaries.

SEC. 16. Sources of Fund. - In addition to the monthly contribution of the
OFWs to the Fund, the Fund shall be financed from the following sources:

a. Ten percent (10%) from the fees charged by medical testing centers which
provide medical test to overseas job-applicants;

b. Ten percent (10%) from fees charged by Philippine international airports
to outgoing OF Ws;

c. Ten percent (10%) from fees charged by OF W training centers, recruitment
agencies, and manning agencies;

d. Twenty percent (20%) from fees charged by the DMW from the Overseas
Employment Certificate;

e. Savings from Assistance to Nationals administered by the Department of
Foreign Affairs, and Aksyon Fund by the DMW, if there are any;

f. Grants, bequests from donors, local or foreign, to the System; and

g. Fifty Million Pesos (Php50,000,000.00) annually for five (5) years to be
appropriated by the National Government and shall be taken from the
Contingency Fund of the Office of the President to complement the
Overseas Filipino Workers Fund's Reserve.

SEC. 17. Appropriation. - To effectively implement the provisions of this
Act, the amount of One Hundred Million Pesos (Php 100, 000, 000.00) is hereby
appropriated for the initial capitalization of the System to be charged to the
current appropriations of the Office of the President. Thereafter, the amount
necessary for the continuous operation of the System shall be included in the
annual General Appropriations Act.


SEC. 18. Implementing Rules and Regulations. - Within sixty (60) days
from the effectivity of this Act, The DMW shall, in coordination with the
OWWA, the Department of Finance, the Bangko Sentral ng Pilipinas, and the
SSS, promulgate the rules and regulations to effectively implement the provisions
of this Act.

SEC. 19. Separability Clause. - If any provision or part of this Act is
declared invalid or unconstitutional, the remaining parts not affected shall remain
in full force and effect.

SEC. 20. Repealing Clause. - All laws, presidential decrees, executive
orders, letters of instructions, administrative orders, proclamations or
administrative regulations that are inconsistent with the provisions of this Act are
hereby repealed, amended, or modified accordingly.

SEC. 21. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,