Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

150
HOUSE BILL NO.

Introduced by Honorable Rodante D. Marcoleta

EXPLANATORY NOTE

This bill seeks to establish the Overseas Filipino Workers Retirement System which
will provide retirement benefits and welfare assistance to overseas Filipino workers (OFWs)
and their dependents.

There is no doubt that OFWs play an important role in revitalizing the economy.
OFWs’ remittances contribute as much as 20% of the gross domestic product. The OFWs are
the so called heroes of our time. Unfortunately, uncertainty lies before them during their old
age and retirement years. The government has yet to establish a system that would truly
assure social security and protection for the millions of OF Ws during their retirement.

‘At present, the Social Security System (SSS) program for OFWs offers limited
pension benefits which matures only at the age of 60. There is no law which would allow the
OFWs to neither receive retirement pay at an earlier age nor provide voluntary separation
benefits. Unlike the SSS members, the employment of an OFW is purely contractual and is
usually only for a short period of time. OFWs such as domestic helpers and construction
workers usually find reemployment difficult at the age of 45. Performing artists are not
usually rehired at the age of 35. It is unthinkable for them to wait until the age of 60 to
receive their pension benefits under the SSS program.

As our modern day heroes, OFWs deserve to be given appropriate benefits and be
greater security after their employment days are over. The present set-up
necessitates improvement in that direction. This bill therefore proposes to establish a
retirement system designed to provide the OFWs with funds they can use to establish a
business or other productive endeavors when they decide to finally retire or separate from
work.

In view of the foregoing, the approval of this bill is earnestly recommended.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session,

HOUSE BILL NO.

Introduced by Honorable Rodante D. Marcoleta

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

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

SECTION 1. Short Title. — This Act shall be known as the “Overseas Filipino
Workers Retirement System Act of 2019.”

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) “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;


b) “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;

«

“Beneficiaries” refers to the dependent spouse of an OFW, his
dependent children, whether legitimate or illegitimate, who are the
primary beneficiaries. In their absence, the dependent parents shall be
the secondary beneficiaries. In the absence of the foregoing, another
person designated by the OFW.

d) “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 years of age: Provided, That he is
congenitally incapacitated and incapable of self-support, physically or
mentally; legitimate spouse dependent for support upon the employee;
and the legitimate parents wholly dependent upon the covered employee

for regular support.

SEC. 4. Overseas Filipino Workers Social Security and Retirement System. —

There is hereby established an Overseas Filipino Workers Social Security and

Retirement System, hereinafter referred to as the System, which shall cover all

documented OFWs who are duly registered with the Philippine Overseas Employment

Administration.

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

a) Provide retirement benefits and welfare assistance to OF Ws and their

dependents;


b) Develop a savings pension plan by which OF Ws can be encouraged
collectively to contribute part of their earnings in order to protect
them against the hazards of old-age, disability, sickness and death;

c) Ensure the viability of the funds remitted by IFWs; and

d) Establish a trust fund which will constitute the contributions of
OFWs.

The system shall endeavor to strike a right balance in management and
safekeeping of the funds remitted by OFWs while extending the benefits of the
System’s services to the rightful beneficiaries.

SEC. 6. Board of Trustees. — The System shall be administered by a board of

trustees which shall be composed of the Secretary of Labor and Employment, as

chairman, the Administrator of Philippine Overseas Employment Administration
(POEA), the Director of the System, two (2) representatives from the land-based
overseas workers, two (2) representatives from the seamen of seafarer’s group, and
one (1) representative each from the management and labor sectors, as members.

The director of the System and the representatives of both management and
labor sectors, upon the recommendation of the Secretary of Labor and Employment,
and the representative of both the land-based overseas workers and the seamen or the
seafarers, upon the recommendation of their respective organizations, shall be
appointed by the President.

The director shall be the chief executive officer of the System. He shall have

the qualifications, rank and compensation of bureau director. The director shall be

assisted by a deputy director who shall be appointed by the board of trustees upon the


recommendation of the chairman.
SEC. 7. Powers and Functions. — The Board of Trustees shall have the
following powers and functions:
a) Formulate and implement measures to attain the system’s objectives

and purposes;
b

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

o

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

@

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;

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Acquire property, real or personal, which may be necessary for the

attainment of the purposes of this Act;

f) Determine and fix the monthly contribution of the OF Ws;

g) Sue and be sued in court;

h) Appoint such personnel as may be deemed necessary to ensure the
efficient administration of the System; and

i) Perform such other acts as may be necessary for the effective

implementation of this Act.


SEC. 8. Chairman; Power and Functions. — The chairman shall have authority
and responsibility of exercising the powers and functions of the System. He shall be
appointed by the President.

The Chairman shall have the following powers and functions:

a) Formulate and implement policies and programs to attain the
objectives and purposes of the System;

b) Issue rules and regulations to carry out the objectives and purposes
of the System;

c) Administer fund resources and recommend to the Board of Trustees
the annual budget of the System;

d) Determine the functions, composition, and compensation of the
personnel of the System;

e) Determine and fix the amount of contributions of employers of
land-based and sea-based OF Ws;

f) Coordinate all policies and programs relating to OF Ws as provided
in this Act; and

g) Undertake necessary consultations concerning matters affecting the
welfare of OF Ws and their families, and recommend to the President
policies and programs relative thereto.

SEC. 9. Secretariat. — The Secretariat personnel shall be appointed by the
Chairman, upon the recommendation of the Director. The compensation of the
personnel and the operating expenses of the Secretariat shall be charged to the

Retirement Fund as hereinafter established.


SEC. 10. Compulsory Coverage. — The System shall be compulsory upon all
documented OFWs; Provided, That if an OFW is a member of Social Security System
or any similar entity as provided under existing laws, the same shall be discontinued
and any benefit or benefits accruing to the OFW from such membership shall be
integrated into the System.

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

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 he shall be credited with all
contributions paid and shall be entitled to all benefits provided in this Act.

SEC. 12. Retirement Benefits. — All covered OF Ws who had paid at least one
hundred twenty (120) monthly contributions prior to the semester of retirement and
who has 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 Social Security System.

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
and his dependents to the dependent’s pension: Provided, That if he has no primary
beneficiaries and he dies within sixty months from the start if his monthly pension, his
secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the
greater of (a) twenty (2) times the monthly pension or (b) the difference of sixty (60)

times the monthly pension and the total monthly pensions by the System excluding the


dependent’s pension.

SEC. 13. Dependent’s Pension. — The dependent’s pension shall be equivalent
to ten percent (10%) of the monthly pension for each dependent child which shall not
exceed five, beginning with the youngest and shall be without substitution: Provided,
That his dependents born before his retirement of a marriage subsisting when he 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 who
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 4) month basic salary for every year of their respective overseas
employment or the nearest equivalent fraction thereof favorable 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 as such with the Philippine Overseas Worker’s Administration
(POEA) _ shall remit five (5%) of their gross monthly income for at least ten (10)
years.

The Fund shall be used for the purpose of providing retirement benefits and
similar gratuities to OF W or their beneficiaries.

SEC. 16. Source 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;

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Ten percent (10%) from fees charged by OFW training centers; and
d

Fifty Million Pesos (P50,000,000.00) annually for five (5) years to be
appropriated and 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,
there is hereby appropriated the amount of One Hundred Million Pesos
(P100,000,000.00) 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. -The POEA shall, within
sixty (60) days after the effectivity of this Act, promulgate the necessary rules and
regulations for the implementation of this Act.

SEC. 19. Repealing Clause. - Any provision of laws, decrees, executive
orders, proclamations, rules and regulations, or parts thereof, which are inconsistent
with this Act are hereby repealed, amended or modified accordingly.

SEC. 20. Separability Clause. - If any portion of this Act is declared
unconstitutional or invalid, the other provisions not affected shall continue in full

force and effect.


SEC. 21. Effectivity Clause. - This Act shall take effect fifteen (15) days
following the completion of its publication in two (2) newspapers of general
circulation.

Approved,