ENTATIVES
RECEIVED
2140

Republic of the Philippines
House of Representatives
Quezon City Metro Manila

SEVENTEENTH CONGRESS |
First Regular Session

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54 Be |

House Bill @Lu0 [usin

Introduced by REP. ENRICO A. PINEDA and REP. MICHAEL ODYLON L. ROMERO

Explanatory Note

The recent veto of the P2,000 increase in the minimum monthly pension of Social
Security System (SSS) pensioners revealed that more reforms are needed to guarantee the

actuarial life of this pension fund.

The episode underscores the retooling of the internal mechanisms which would allow
the said Fund to respond to a wide range of challenges from pensioner pressure to adjust
entitlements to petition of employers to give leeway to meet obligations.

There is also the need to arm the Fund with the powers on when to apply leniency on
certain receivables especially on cases when the party who should provide it is deemed to be
in financial distress.

In response to these, this bill seeks to ordain reforms in the powers and functions of
the Social Security System and the SSS itself.

In doing so, it is hoped that the SSS’ capacity to fund increases in the minimum
monthly pension and other benefits will be ensured.

Approval of this measure is respectfully sought

oe .. PINEDA

Representative, IPACMAN Partylist



Republic of the Philippines
House of Representatives
Quezon City Metro Manila

SEVENTEENTH CONGRESS
First Regular Session
2108
House Bill °

Introduced by REP. ENRICO A. PINEDA and REP. MICHAEL ODYLON L. ROMERO

AN ACT
RATIONALIZING AND EXPANDING THE POWERS AND DUTIES OF THE
SOCIAL SECURITY COMMISSION AND THE SOCIAL SECURITY SYSTEM,
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 1161, AS AMENDED BY
REPUBLIC ACT NO. 8282, OTHERWISE KNOWN AS THE “SOCIAL SECURITY
ACT OF 1997”

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

SECTION 1.Short Title- this Act shall be known as the “SSS Reform Act of 2016”.

SECTION 2.Section 4 of Republic Act No. 1161, as amended, is hereby further
amended to read as follows:

“SEC. 4.Powers and Duties of the Commission and SSS.

~ (a) The Commission. — For the attainment of its main objectives as set forth in
Section 2 hereof, the Commission shall have the following powers and duties:

“XXX.

“(2) To establish a provident fund for the members which will consist of
voluntary contributions of employers and/or employees, self-employed and voluntary
members and their earnings, for the payment of benefits to such members or their
beneficiaries, subject to such rules and regulations as it may promulgate [and
approved by the President of the Philippines];

“x XX

“(6) To compromise or release, in whole or in part, any interest, penalty or any
civil liability to SSS in connection with the investments authorized under Section 26
hereof, under such terms and conditions as it may prescribe [and approved by the
President of the Philippines; and];


“(7) ANY LAW TO THE CONTRARY NOTWITHSTANDING, TO
CONDONE, ENTER INTO A COMPROMISE, OR RELEASE, IN WHOLE
OR IN PART, PENALTIES IMPOSED UPON DELINQUENT SOCIAL
SECURITY CONTRIBUTIONS REGARDLESS OF THE AMOUNT
INVOLVED UNDER SUCH VALID TERMS AND CONDITIONS IT MAY
PRESCRIBE WHEN THE FINANCIAL POSITION OF THE EMPLOYER
DEMONSTRATES A CLEAR INABILITY TO PAY THE ASSESSED
DELINQUENCY.

“THE COMMISSION SHALL SUBMIT TO BOTH THE SENATE AND
HOUSE OF REPRESENTATIVES OF THE PHILIPPINES AN ANNUAL
REPORT ON THE EXERCISE OF THE POWERS UNDER THIS
PROVISION, STATING THEREIN THE FOLLOWING FACTS AND
INFORMATION, AMONG OTHERS: NAMES AND ADDRESSES OF
EMPLOYERS WHOSE PENALTY DELINQUENCIES HAVE BEEN THE
SUBJECT OF COMPROMISE OR CONDONATION; AMOUNT INVOLVED;
AMOUNT COMPROMISED OR CONDONED; AND THE JUSTIFICATIONS
THEREON, TO DETERMINE THAT SAID POWERS ARE REASONABLY
EXERCISED AND THAT THE SSS IS NOT UNDULY DEPRIVED OF
REVENUES;

“(8) TO DETERMINE AND FIX FROM TIME TO _ TIME,
THROUGH RULES AND REGULATIONS, THE MINIMUM AND
MAXIMUM MONTHLY SALARY CREDITS OF MEMBER- EMPLOYEES,
THE SCHEDULE AND THE RATE OF CONTRIBUTIONS OF EMPLOYERS
AND MEMBER-EMPLOYEES, THE RATE OF PENALTY ON DUE BUT
UNREMITTED CONTRIBUTIONS OF EMPLOYERS AND MEMBER-
EMPLOYEES AND UNPAID LOAN AMORTIZATIONS OF MEMBER-
EMPLOYEES, TAKING INTO CONSIDERATION ACTUARIAL
CALCULATIONS, RATE OF BENEFITS, INFLATION, AND OTHER
RELEVANT SOCIOECONOMIC DATA; AND

“[()) To approve, confirm, pass upon or review any and all actions of the
SSS in the proper and necessary exercise of its powers and duties hereinafter
enumerated.

“The Social Security System. ~ Subject to the provision of Section [four (4)] 4,
[paragraph seven (7)] SUBSECTION (A.9) hereof, the SSS shall have the following
powers and duties

XxX

“(2) To require the actuary to submit a valuation report on the SSS benefit
program every four (4) years, or more frequently as may be necessary, to undertake
the necessary actuarial studies and calculations concerning increases in benefits taking
into account inflation and the financial stability of the SSS, and to provide for feasible
increases in benefits every four (4) years, including the addition of new ones, under
such rules and regulations as the Commission may adopi{, subject to the approval of
the President of the Philippines]: Provided, That the actuarial soundness of the reserve


fund shall be guaranteed|: Provided, further, That such increases in benefits shall not
require any increase in the rate of contribution];

XXX.

SECTION 3.Section 18, paragraph (a) of Republic Act No. 1161, as
amended, is hereby deleted and a new paragraph shall be introduced to read as
follows:

“SEC. 18, EMPLOYEE’S CONTRIBUTION, - BEGINNING ON THE
LAST DAY OF THE CALENDAR MONTH WHEN AN EMPLOYEE'S
COMPULSORY COVERAGE TAKES EFFECT AND EVERY MONTH
THEREAFTER DURING HIS EMPLOYMENT, THE EMPLOYER SHALL
DEDUCT AND WITHHOLD FROM SUCH EMPLOYEE’S MONTHLY
SALARY, WAGE, COMPENSATION OR EARNINGS, THE EMPLOYEE'S
CONTRIBUTION IN AN AMOUNT CORRESPONDING TO HIS SALARY,
WAGE, COMPENSATION OR EARNINGS DURING THE MONTH IN
ACCORDANCE WITH THE MONTHLY SALARY CREDITS, SCHEDULE,
AND THE RATE OF CONTRIBUTIONS AS MAY BE DETERMINED AND
FIXED BY THE COMMISSION.

“THE MONTHLY SALARY CREDITS, SCHEDULE, AND
RATE OF CONTRIBUTION SHALL ALSO APPLY TO SELF-
EMPLOYED AND VOLUNTARY MEMBERS.”

SECTION 4.SEC. 3. Section 22, paragraph (a) of Republic Act No. 1161, as
amended, is hereby further amended to read as follows:

“SEC. 22.Remittance of Contributions. ~ (a) The contribution imposed in the
preceding section shall be remitted to the SSS within the first ten (10) days of each
calendar month following the month for which they are applicable or within such time
as the Commission may prescribe. Every employer required to deduct and to remit
such contributions shall be liable for their payment and if any contribution is not paid
to the SSS as herein prescribed, {heJTHE DELINQUENT EMPLOYER shall pay
besides the contribution a penalty thereon fof three percent (3%) per month] from the
date the contribution falls due until paid.

THE RATE OF THE PENALTY ON _DELINQUENT
CONTRIBUTIONS PER MONTH SHALL BE DETERMINED AND FIXED
BY THE COMMISSION THROUGH RULES AND REGULATIONS, TAKING
INTO CONSIDERATION THE CURRENT INFLATION RATE AND OTHER
RELEVANT SOCIOECONOMIC DATA. If deemed expedient and advisable by
the Commission, the collection and remittance of contributions shall be made
quarterly or semi-annually in advance, the contributions payable by the employees to
be advanced by their respective employers: Provided, That upon separation of an
employee, any contribution so paid in advance but not due shall be credited or
refunded to his employer.”

SECTION 5. The Commission shall promulgate the necessary rules and regulations
to implement this Act not later than ninety (90) days after its effectivity.


SECTION 6. If, for any reason, any part, section or provision of this Act is held
invalid or unconstitutional, the remaining provisions not affected thereby shall continue to be
in full force and effect.

SECTION 7, All laws, decrees, orders, rules, regulations and other issuances or parts
thereof which are inconsistent with the provisions of this Act are hereby repealed or modified
accordingly. Republic Act No. 1161, as amended, is further amended accordingly.

SECTION 8. This Act shall take effect fifteen (15) days after its publication in the

Official Gazette or in a newspaper of general circulation

Approved,