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

Second Regular Session
Sixteenth Congress

5763

HOUSE BILL NO.

Introduced by Hon. Winston “Winnie” Castelo

EXPLANATORY NOTE

This bill seeks to provide the Social Security Commission (Commission) the authority
to condone penalties on delinquent contributions and loans, to determine the monthly salary
credits, the schedule and rate of contributions, benefit increases and the rate of penalty on
delinquent contributions and unpaid loan amortizations san Presidential approval, thereby
further amending Republic Act No. 1161, as amended, otherwise known as the Social
Security Law.

Four years ago, the present Commission convened as the governing board of the
Social Security System (SSS) to establish what it has determined as collegial marching
orders, priorities and strategic directions, guided by its fiduciary duty to protect the welfare
of SSS members and the fortitude to exercise extraordinary diligence in the care of the SS
Fund.

All the nine (9) members of the Commission are appointed by the President of the
Philippines for a term of one year and their performance are appraised and evaluated by the
Office of the President every year. The Commission is a collegial body where the
government, the employers, the workers and the general public are well-represented.

The valued assistance of the six support committees of the Commission permits a
multi-faceted and interlinked view of SSS operations, allowing for speedy but circumspect
decision-making, the prevention of red tape, and offering support for proposed plans and
programs that will sustain the continued growth of SSS, such as the review of policies that
resulted in policy recommendations and enhancements in investments, lending and asset
management, service delivery, contracts and procurement activities, information technology
and budget utilization.

The Commission believes that a strong and vibrant social protection system fulfills an
emerging country. With devotion to its mandate and the willingness to keep learning, the
Commission and the SSS reinforce their commitment for a better SSS in the years to come.

Reaching out initiative reaps increased membership and collections; SSS investment
yield outperforms benchmark; surplus of contribution collections over benefit payments at a
five-year high; operating expenses carefully managed; service delivery further improved;
workforce empowerment through education; approval of major reform measures granted;
responsibility for social security - The long-term benefit of these SSS reforms will be felt
beyond this present administration. These reforms were never conceived to be a panacea,
but rather a movement towards strengthening this institution, on which over 30 million
members depend. It is hoped that the succeeding SSS administrations will take on this
initiative so that SSS members are assured of the continued delivery of benefits and better
service.

Interest or penalty condonation on unpaid
member loans sans Presidential approval

Loans granted by SSS primarily serve as investment vehicles for the pension fund.
Long-term loans help spur economic growth by providing private sector employee wider
access to credit, or individual members with funds to buy, erect or repair their own homes.
On the other hand, short term loans allow qualified members to meet their immediate
financial needs.

The Commission is authorized under Section 4, paragraph (6) of Republic Act No.
1161 as amended (SS Law) to compromise or release, in whole or in part, any interest,

Page 1 of 10


penalty or any civil liability to SSS accruing from unpaid member loans. However, the
exercise of this authority is subject to approval by the President.

The proposed amendment seeks to forego Presidential nod as a_ statutory
requirement when the Commission exercises such authority on the strength of the
foregoing:

1) As a collegial body vested under the SS Law with quasi-judicial and regulatory
functions, all the members of the Commission are appointed by the President. Thus,
each Commissioner may be considered as an extension of Presidential prerogatives
in ensuring full representation of all the sectors and stakeholders in the country’s
social security program. The one-year term of all the Commissioners (under the
auspices of the GOCC Governance Act of 2011 in Section 17, Chapter IV thereof)
already sets some restrictive parameters due to the short term of office and the
prospects of being sooner replaced for untoward conduct or dismal performance.

2) The current expression of Legislative will on the non-requirement of Presidential
approval in the exercise by the governing boards of their statutory powers are found
in the laws enacted by Congress after the passage of the SS Law on 24 May 1997:

a) the GSIS Law (Republic Act No. 8291) on 30 May 1997;

b) the Home Development Mutual Fund (HDMF) of Pag-Ibig Law (RA No, 9679)
on 21 July 2009;

c) the National Internal Revenue Code of the Philippines (RA No, 8424) on 28
July 2008, and;

d) the Philippine Health Insurance Corporation (PhilHealth) Charter (RA No,
10606) on 23 July 2012

These laws provide the requisite background on the proposal to align the SS Law
with the above-enumerated retirement, social and health protection laws.

3) The statutory powers of GSIS’, PhilHealth’s and HDMF’s governing Boards is not
subject to Presidential approval.

a) Section 43 of RA No. 8291 expressly vests upon the GSIS Board of Trustees
without need of Presidential approval, the following powers:

a.i) to compromise or release, in whole or in part, any claim or settle
liability to the GSIS, regardless of the amount involved, under such
terms and conditions as it may impose for the best interest of the
GSIS;

a.ji) to approve and adopt guidelines affecting investments, insurance
coverage of government properties, settlement of claims, disposition of
acquired assets, development of housing projects, increased benefit
and loan packages to members, and;

a.ili) to do and perform any and all acts necessary, proper or incidental to
the attainment of the purposes and objectives of the GSIS Law.

b) Section 16 of RA No. 10606 authorizes PhilHealth Corporation to compromise,
waive or release, in whole or in part, such interest or surcharges imposed upon
employers regardless of the amount involved under such valid terms and
conditions it may prescribe, without Presidential approval, notwithstanding the
provisions of any law to the contrary;

¢) Section 9 of RA No. 9679 empowers the Board of Trustees of HDMF to waive or
suspend the coverage and/or payment of monthly Pag-Ibig contributions without
securing approval from the President of the Philippines by reasons of nature of
employment, condition of business, ability to make contributions and other
reasonable considerations, and;

4) Section 204, Chapter I, Title VIII of RA No. 8424 grants the BIR Commissioner
the authority /) to abate and refund or credit taxes and ii) to compromise the
payment of any internal revenue tax, when (1) a reasonable doubt as to the
validity of the claim against the taxpayer exists; or (2) the financial position of

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the taxpayer demonstrates a clear inability to pay the assessed tax subject to the
following minimum amounts:

i. for cases of financial incapacity, a minimum compromise rate equivalent to
ten percent (10%) of the basic assessed tax; and

li, for other cases, a minimum compromise rate equivalent to forty percent
(40%) of the basic assessed tax.

Where the basic tax involved exceeds One million pesos (P1,000,000.00) or
where the settlement offered is less than the prescribed minimum rates, the
compromise shall be subject to the approval of the Evaluation Board which shall
be composed of the BIR Commissioner and the four (4) Deputy BIR
Commissioners.

It is therefore evident that the President signed RA No. 8291, RA No, 10606, RA No.
9679 and RA No. 8424 into laws, knowingly dispensing the requirement of
Presidential approval upon GSIS‘, PhilHealth’s and HDMF's governing Boards as well
as the BIR Commissioner and BIR Evaluation Board exercising their said statutory
powers,

4) The proposed amendment will allow the Commission to immediately act on situations
needing its urgent attention. This will provide the flexibility and the needed discretion
in running SSS’ operations and managing its loan portfolio. The details of operational
matters need not necessarily involve and burden the President. This makes more
sense when we consider that, on the one hand, it is not easy to schedule an
appointment and obtain a portion of Presidential time mainly because there are
equally pressing matters and affairs of the State that oftentimes are more important,
that hence, demands the President's precious attention.

5) SSS’ ability to extend more financial assistance to its members is hampered by the
breach in the statutory limit for this type of SSS program where it currently stands at
10 % of the Investment Reserve Fund (IRF) for short and medium-term member:
loans. This proposal will help provide the opportunity to address the breach in the
statutory limit brought about by continuously carrying in its books the huge loan
delinquencies of millions of SSS members. This will enable the Commission and the
SSS better manage its loan portfolio.

6) The proposal will further ensure that the policy decisions and issuances of the
Commission, as a collegial body, are less politicized. It means a lot that the
Commission and its Members are of proven technical competence and proficiency in
the field of social security and member-loan administration and are supported by the
technocrats and professional men and women who run SSS and its day-to-day
operations. The decision-making process will be greatly expedited for the benefit of
millions of SSS members.

Penalty condonation on delinquent contributions

Under Section 22 (a) of the SS Law, a penalty of three percent (3%) a month is
assessed on unremitted contributions. This penalty is burdensome as it continues to accrue
from the date the contribution falls due until paid. As a result, the delinquency, if not
quickly addressed, can really pile up. For troubled companies that, by and large, do not
want to be delinquent in the first place but failed to remit what is due as their employees’
contributions to SSS could easily find themselves in arrears.

It is reported that for a big number of billing or demand letters issued against
employers-members of the SSS, the amount of contribution-delinquency is computed based
on presumptive delinquency under Section 22 (d) of the SS Law, and hence not yet final
being subject to reconciliation of records. The Large Account Division of SSS has a
collectible of P1,033 Billion as of 26 May 2014 from delinquent employers. P408 Million is
accounted for by penalties and P625.9 Million is for contributions that are due. By providing
a breathing space, we are actually helping SSS to immediately collect about P625.9 Million
overdue SS contributions which would otherwise be difficult to collect. It is not a secret that
companies choose not to pay what SSS demands of them because of penalties slapped upon
them that have accumulated through the years which, at times, are actually bigger than the

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principal that should have been paid. This measure provides a strong incentive for those
that have been in arrears in the payment of their employees’ contributions to immediately
settle what is due and overdue, minus the huge burden of dealing with the delinquency
penalties. Past SSS condonation experience shows the amount of P3,42 B that was
condoned as penalties while enabling the SSS, at the same time, to collect P3.546B from
24,042 delinquent employers which availed of the program. This amount easily beefed up
the SS Fund and contributed to its stability and viability.

More importantly, this is a welcome development for the privately employed workers
comprising SSS’ general membership, the self-employed individuals, financially distressed
companies, small and medium businesses, other social enterprises, the contributing
members of the informal sector, the farmers and the fisherfolks, the kasambahays and their
household employers. They can now avail of the privileges of SSS members of good
standing, full benefits and loans, which would otherwise not be available had their
delinquent payments remain unsettled.

This Is a three-pronged stimulus package that will benefit all stakeholders of the SSS
in the light of the recent calamities and economic debacles besieging our country, It is
important that the loan privileges of SSS members such as calamity, housing and other loan
packages remain available. This can only happen if contribution payments are up to date.
The law will help the SSS, the employers and workers.

To foster public accountability, transparency and good governance, Congress is not
deprived of its oversight functions because an annual report on the exercise of the proposed
power shall be required to be submitted to both Houses, 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 reason/s for the exercise of power to determine that said powers are
reasonably exercised and that the SSS Is not unduly deprived of revenues,

This new provision is patterned from the GSIS Law, the HDMF/Pag-Ibig Law and
PhilHealth Law and the National Internal Revenue Code. Under the said laws, the statutory
powers which the governing boards of GSIS, PhilHealth and HDMF can exercise in carrying
out their mandates is not subjected to Presidential approval. This proposal is based on the
theory that operational details and accounts management are the province of the
Commission and the SSS, the ones entrusted with the mandate of running the affairs of the
country’s social security system including the exercise of discretion and flexibility in
managing its own affairs.

The aim is to replicate and/or align the SS Law with the Legislative will of Congress
as contained and expressed in its more recent Legislative enactments, to wit:

a) Section 43 of RA No. 8291 expressly vests upon the GSIS Board of Trustees
without need of Presidential approval, the following powers:

a.i) to compromise or release, in whole or in part, any claim or settle liability
to the GSIS, regardless of the amount involved, under such terms and
conditions as it may impose for the best interest of the GSIS;

a.ii) to approve and adopt guidelines affecting investments, insurance coverage
of government properties, settlement of claims, disposition of acquired
assets, development of housing projects, increased benefit and loan
packages to members, and;

a.ili) to do and perform any and all acts necessary, proper or incidental to the
attainment of the purposes and objectives of the GSIS Law.

b) Section 16 of RA No. 10606 authorizes PhilHealth Corporation to compromise,
waive or release, in whole or in part, such interest or surcharges imposed upon
employers regardless of the amount involved under such valid terms and
conditions it may prescribe, without Presidential approval, notwithstanding the
provisions of any law to the contrary;

¢) Section 9 of RA No. 9679 empowers the Board of Trustees of HDMF to waive or
suspend the coverage and/or payment of monthly Pag-Ibig contributions without
securing approval from the President of the Philippines by reasons of nature of

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employment, condition of business, ability to make contributions and other
reasonable considerations, and;

d) Section 204, Chapter I, Title VIII of RA No. 8424 grants the BIR Commissioner
the authority /) to abate and refund or credit taxes and ji) to compromise the
payment of any internal revenue tax, when (1) a reasonable doubt as to the
validity of the claim against the taxpayer exists; or (2) the financial position of
the taxpayer demonstrates a clear inability to pay the assessed tax subject to the
following minimum amounts:

i, for cases of financial incapacity, a minimum compromise rate equivalent to
ten percent (10%) of the basic assessed tax; and

ii, for other cases, a minimum compromise rate equivalent to forty percent
(40%) of the basic assessed tax,

and in certain instances, the BIR Evaluation Board.

Again, it bears stressing that the President did not veto but signed the bills into what
is now known as RA No, 8291, RA No. 10606, RA No. 9679 and RA No. 8424
knowingly dispensing the requirement of Presidential approval in the exercise by
GSIS’, PhilHealth’s and HDMF’s governing Boards as well as the BIR Commissioner
and BIR Evaluation Board of their statutory authorities.

Fixing the monthly salary credits, the schedule and rate
of contributions and the rate of penalty on delinquent
contributions and unpaid loan amortizations

What Is embodied in Section 18 of the SS Law Is an outdated schedule of the social
security contributions and the corresponding monthly salary credits that have failed to keep
pace with the changing times. Amendments to the SS Law last introduced in 1997 (now 17
years old) are no longer reflective of current socio-economic conditions. The minimum
monthly salary credit still pegged at P1,000.00 per month is way below the minimum
salary/wage in the private sector while the maximum salary credit at P15,000.00 per month is
a far cry from existing realities in compensation administration and labor developments.

The SS contribution rate is an altogether different story. Since 1980, the contribution
rate was pegged at 8.4 percent for 23 years, until it was increased by one-percent to 9.4
percent in 2003, to 10.4 percent in 2007 and 11 percent in 2014 to avoid fund depletion.
The contribution rate of the GSIS stands at 21 per cent. Given this, it is timely that
Congress revisit the SS Law and ensure that this provision is responsive to the present-day
realities.

Upon the other hand, across-the-board pension increases of eight to fifty percent
were granted 24 times (the last one in 2007); and the minimum monthly pension was also
increased under the 1997 SS Law Amendment to 1,200 if with at least 10 Credited Year of
Service (CYS) and to A2,400 if with at least 20 CYS. These pension increases averaged
15.12 percent per year for the period 1972 to 2007 and were often announced on “special
occasions” such as Labor Day in May and the SSS anniversary in September.

It is just unfortunate that while these pension increases averaged 15.12 percent per
year for the period 1972 to 2007 the SS contributions was increased only six times from
1960 to 2014.

The toll exacted by these benefit increases with no counterpart contribution
increases is the drastic deterioration of the life of the fund from perpetuity (per 1983
Valuation) to only until 2043 (per 2011 Valuation), and the accumulation of unfunded
liabilities, By 2027, benefit payments (P225.36 Billion) would already exceed contributions
(P222.02 Billion). This would persist in the succeeding years at an increasing rate.

Prudent fiscal management coupled with solid investment strategies are continuously
being undertaken because they remain as the key drivers toward strengthening the viability
of the SS Fund. The SSS continues to find ways and means to keep the fund viable by
ensuring a balanced investment portfolio with emphasis on liquidity and risk management.
‘The investment income plays the important role of financing the gap between contributions
and expenditures covering the shortfall of contributions to total expenditures. However,

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today’s difficult times is fraught with a lot of uncertainties. Managing the risks and optimizing
the return on investment will prove a real challenge and there is no single formula that will
ensure financial success. By year 2034, the investment income would no longer be sufficient
to cover the gap; hence the SS Fund would have to be tapped to finance the deficit. In the
succeeding years, the annual deficits will be covered by dipping into the SS Fund until it is
exhausted by 2043.

The heavy strain on the SS Fund being exacted by the increasing benefit obligations of
the SSS to be paid to its members and their beneficiaries has a dire effect on the fund's long-
term viability. To lighten this load, the SSS, at the same time, carefully manage benefit
payouts and operating expenses to minimize SSS' unfunded liability.

SSS initiatives to enlighten more workers on the value of SSS and the importance of
the active membership has helped boost contributions collections, which is the lifeblood of the
SSS Fund. However, the existing contribution set-up does not ensure that SSS can
continuously cover its ballooning unfunded liabilities in the future. To address such concern
and be able to cope with this predicament, something must be done about the SSS
contribution rates and align the same with industry standards and sound international
practices taking into consideration actuarial calculations, rate of benefits, inflation and other
relevant socio-economic indicators.

Under the present provisions of the SS Law, the Commission cannot increase the
minimum and maximum monthly salary credits, the schedule and the rate of contributions as
well as the rate of benefits without securing the approval of the President of the Republic of
the Philippines. This process is usually tedious and takes a determinable time.

‘As a quasi-judicial body, all the stakeholders in the implementation of the social
security program in the Philippines have a seat in the Commission, To live up to the
Commission's full representative capacity where the sectors of the government, the workers,
the management and the general public are well represented, the authority to determine and
fix from time to time through rules and regulations, the minimum and maximum monthly
salary credits, the schedule and the rate of contributions as well as the rate of increase in
benefits, without the Presidential approval requirement, is now being proposed.

Corollary to the power to determine and fix the minimum and maximum monthly
salary credits, the schedule and the rate of contributions as well as the rate of increase in
benefits is the authority to review and periodically adjust the rate of penalty on due but
unremitted contributions and unpaid loan amortizations taking into consideration inflation and
other pertinent socio-economic data. This is the logical consequence as this harmonizes the
power to condone, compromise or release, in whole or in part, such 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.

As earlier discussed, the proposed bill is aligned with the GSIS Law, the PhilHealth
Charter, the Pag-Ibig Law and the NIRC.

The GSIS Law (in Section 43 thereof) expressly vests upon the GSIS Board of
Trustees without need of Presidential approval, the power i) to fix and periodically review
and adjust the rates of interest and other terms and conditions for loans and credits
extended to its members or other persons, whether natural or juridical, ii) to compromise or
release, in whole or in part, any claim or settle liability to the GSIS, regardless of the
amount involved, under such terms and conditions as it may impose for the best interest of
the GSIS, iii) to approve and adopt guidelines affecting investments, insurance coverage of
government properties, settlement of claims, disposition of acquired assets, development of
housing projects, increased benefit and loan packages to members, iv) to determine, fix and
impose interest upon unpaid or unremitted premiums and/or contributions, and v) to do and
perform any and all acts necessary, proper or incidental to the attainment of the purposes
and objectives of the GSIS Law.

Also, the PhilHealth Corporation has authority pursuant to Section 16 of its Charter
to i) impose interest and/or surcharges not exceeding three percent (3%) per month, in
case of delay by a public or private employer in the remittance of contributions within the
prescribed period, and /i) to compromise, waive or release, in whole or in part, such interest

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or surcharges imposed upon employers regardless of the amount involved under such valid
terms and conditions it may prescribe, without Presidential approval, notwithstanding the
provisions of any law to the contrary.

The Board of Trustees of the HDMF, in the same vein, may waive or suspend the
coverage and/or payment of monthly Pag-Ibig contributions pursuant to Section 9 of the
Pag-Ibig Law without securing approval from the President by reasons of nature of
employment, condition of business, ability to make contributions and other reasonable
considerations.

Similarly, the same statutory powers are also found in the provisions of the RA 8424
granting the BIR Commissioner the authority /) to abate and refund or credit taxes and ii) to
compromise the payment of any internal revenue tax, when (1) a reasonable doubt as to
the validity of the claim against the taxpayer exists; or (2) the financial position of the
taxpayer demonstrates a clear inability to pay the assessed tax and the BIR Evaluation
Board in certain instances.

SSS power, subject to SSC review, to provide
increases in benefits and additional ones without
Presidential approval

- and-

Deletion of the proviso ~ “That such increases in
benefits shall not require any increase in the rate
of contributions”

‘The SSS is cognizant of the fact that members join or continue their membership not
just because of the ease, accessibility and speed by which they are able to transact with
SSS, but primarily because of the benefits that they stand to receive.

Under the present dispensation, the SSS, subject to SSC review, can provide feasible
increases in benefits and additional ones only upon the approval of the President of the
Philippines pursuant to Section 4, paragraph 2 of the SS Law. This bill seeks to do away
with Presidential approval so that SSS can act with dispatch especially if there are situations
that demand an increase in benefits or introduction of new ones for as long as the actuarial
soundness of the reserve fund is guaranteed,

Synchronization is achieved because the dropping of the requirement of Presidential
approval on increases in benefits is a parallel move and the logical consequence of the other
proposals in this bill to allow the Commission to determine and fix the monthly salary
credits and rate of contributions of SSS members without going to the President, every now
and then, seeking approval. There is matching in the principle and in the language of the
proposed law.

To stress, lest it be misinterpreted, the proposal not to seek Presidential approval
does not mean that Congress is clipping the powers of the President. There is really a felt
need to empower the Commission to move the pensions and other benefits whenever
economic conditions require it. And as previously pointed out, this is being pursued to align
the SS Law with the GSIS Law and the PhilHealth and HDMF Charters where their governing
boards can exercise their statutory powers thereunder without need of Presidential
approval.

As another important manifestation of the proposal to empower the Commission to
exercise both the power to fix the rate of contributions and the power to increase benefits,
the above quoted proviso in Section 4, paragraph 2 of the SS Law ("Provided, further, That
such increases in benefits shall not require any increase in the rate of contributions”), by
necessity, must be dropped. In the past, benefit increases were provided by the Commission
without any additional increase in premium contributions for as long as the actuarial
soundness of the reserve fund is guaranteed.

The statutory safeguard of “actuarial soundness" is not lost to the Commission, which
in its humble submission, is the most compelling and the overriding consideration in
administering a social security program or any pension fund for this matter.

It is in this context that the early passage of this bill is earnestly sought.

Page 7 of 10


Based on the foregoing, therefore, the proposed SSS Chartef Amendments are being)
put forward for the cause of the 30 million SSS members here and afound the world.

Page 8 of 10


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Second Regular Session
Sixteenth Congress

House BILLNo.__9? 63

Introduced by Hon. Winston “Winnie” Castelo

AN ACT
AUTHORIZING THE SOCIAL SECURITY COMMISSION TO CONDONE PENALTIES ON DELINQUENT CONTRIBUTIONS.
AND TO DETERMINE THE MONTHLY SALARY CREDITS, THE SCHEDULE AND RATE OF CONTRIBUTIONS AND THE
RATE OF PENALTY ON DELINQUENT CONTRIBUTIONS AND UNPAID LOAN AMORTIZATIONS, THEREBY FURTHER
AMENDING REPUBLIC ACT NO. 1161, AS AMENDED, OTHERWISE KNOWN AS THE SOCIAL SECURITY LAW

Be it enacted by the House of Representatives of the Philippine in Congress assembled:

SECTION 1. Section 4, paragraph (a) of Republic Act No. 1161, as amended,
otherwise known as the “Social Security Law", 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 XXX Xxx

(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—ofthe
Philippines;-and]

(7) NOTWITHSTANDING THE PROVISIONS OF ANY LAW TO THE CONTRARY, TO
CONDONE, COMPROMISE OR RELEASE, IN WHOLE OR IN PART, SUCH 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 IMPLEMENTING RULES AND REGULATIONS TO CARRY OUT
THIS PROVISION SHALL BE ADOPTED AND PROMULGATED BY THE COMMISSION NOT LATER
THAN NINETY (90) DAYS AFTER THE APPROVAL OF THIS ACT.

THE COMMISSION SHALL SUBMIT TO BOTH THE SENATE AND HOUSE OF
REPRESENTATIVES, AN ANNUAL REPORT ON THE EXERCISE OF THE POWERS UNDER THIS
SECTION, 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 REASON/S FOR THE EXERCISE OF POWER 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, THE SCHEDULE
AND THE RATE OF CONTRIBUTIONS, THE RATE OF PENALTY ON DUE BUT UNREMITTED
CONTRIBUTIONS AND UNPAID LOAN AMORTIZATIONS TAKING INTO CONSIDERATION
ACTUARIAL CALCULATIONS, RATE OF BENEFITS, INFLATION AND OTHER RELEVANT SOCIO-
ECONOMIC DATA, AND;

[9] (9) 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.”

SECTION 2. Section 4, paragraph (b), sub-paragraph (2) of the Social Security Law is
hereby further amended to read as follows:

“SEC. 4. Powers and Duties of the Commission and SSS. - xxx xxx xxx
(b) The Social Security System - Subject to the provision of Section four (4), paragraph
(a) [seven-(7}], SUB-PARAGRAPH NINE (9) hereof, the SSS shall have the following powers
and duties:

xx Xxx. 200%

(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, and to undertake the

Page 9 of 10


necessary actuarial studies and calculations concerning increases in benefits taking into
account inflation and the financial stability of the SSS and to provide feasible increases in
benefits every four (4) years, including the addition of new ones, under such rules and
regulations as the Commission may adopt, [subi +

Philippines:] Provided, That the actuarial soundness of “the reserve fund shall_be
guaranteed|:Providedtfurther Thi Cf req ¥
increase In-the-rate-of contribution];

SECTION 3. Section 18, paragraph (a) of the Social Security Law is hereby further
amended to read as follows:

“SEC. 18. Employee's Contribution. - (a) Beginning as of 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 [fetlowing-schedtle] MONTHLY SALARY CREDITS,
THE SCHEDULE AND THE RATE OF CONTRIBUTIONS AS MAYBE DETERMINED AND FIXED BY
THE COMMISSION.

30x 0

The foregoing MONTHLY SALARY CREDITS, schedule AND RATE of contributions shall

also apply to self-employed and voluntary members.

The-maxim hiy-satary—credit-shall-be—Nine—thousand—pe: 000+

january—Nineteen--hundred_and—ninety-six—(4996):—Provided;—That—it-shall-be
increased—by-One—thousand-Pesos-(P:4,000-00)-every-year—th Funtiit-shalt hay
Provided further,-That-the-minimum-and-maximum-monthly-salary-credits-as-well-as-the
rate-of -contributions-may-be-fixed-from-time-to-time-by-the-Commission-through-rules-and
regulations-taking-into-consideration-actuarial-caleulations-and-rate-of-benefits;-subject-to
the approval-of the President-oF the Philippines:

SECTION 4. Section 22, paragraph (a) of the Social Security Law 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, he shall pay besides the contribution a penalty thereon [ef-three
percent-{3%)-per-menth] 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 SOCIO-
ECONOMIC 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. Separability Clause. If any provision of this Act is declared invalid, the
other provisions not affected thereby shall remain valid.

SECTION 6. Repealing Clause. All laws, decrees, orders, rules and regulations and
other issuances or parts thereof which are inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.

SECTION 7. Effectivity. - This Act shall take effect fifteen (15) days following its
complete publication in the Official Gazette or in at least (2) national newspapers of general
circulation whichever comes earlier.

Approved,

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