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

NINETEENTH CONGRESS
Third Regular Session

0885

HOUSE BILL NO. _

Introduced by Representative HON. ATTY. GERVILLE “JINKY BITRICS” LUISTRO-

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

EXPLANATORY NOTE

There is no doubt that one of the major exports of the Philippines is labor. A recent study shows
that there are currently 2.33 million Overseas Workers from the Philippines, twice the amount as the
previous period;'’ bringing the amount of $3.6 billion in December 2023, up by 3.9 percent from the $3.5
billion recorded in December 2022." However, there is still a much needed reform to address the limitations
of our present law.!?

Although previous legislation, through Republic Act No. 11199 (RA 11199 or the Social Security
Act of 2018, enacted a mandatory inclusion of sea-based and land-based Overseas Filipino Workers
(OFWs) to pay their SSS, Phithealth, and Pag-ibig contributions, it still lacks guidelines to address a wider
professions that are considered atypical jobs such as seafarers, performers, and blue-collar workers that are
not typically employed after a certain age or project.

This bill aims establish the Overseas Filipino Worker Retirement System which will provide a much
needed support to the previous legislation for our modem day heroes ~ by giving them an appropriate
security and benefits, such as a trust fund, which they can utilize after their sacrifice abroad.

In view of the foregoing, this bill is, therefore, ea

© https:/Mnww.statista.com/statistics/1287067/phitippines-number-of-overseas-filipino-
workers/#:~:text=Preliminary%20figures%20f0r%202023%20has,mainly%20work%20as%20domestic%20ne
pers.

2 https:/Awww..pids. gov.ph/details/news/in-the-news/exporting-our-people

+ https://pids.gov.ph/publication/discussion-papers/long-term-ettects-of-tabor-migration-in-the-philippines-
napakasakit-kuya-eddie



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

NINETEENTH CONGRESS
Third Regular Session

- 10855

HOUSE BILLNO.

Introduced by Representatives GERVILLE “JINKY BITRICS” R. LUISTRO

ANACT
ESTABLISHING THE OVERSEAS FILIPINO WORKERS SOCIAL SECURITY AND
RETIREMENT SYSTEM AND APPROPRIATING FUNDS THEREOF

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

SECTION L. Short Title, — This Act shall be known as the “Overseas Filipino Workers Retirement System
Act of 2024.”

SECTION 2. Declaration of Policy. — It is hereby declared the policy of the State to protect and promote
the welfare of Overseas Filipino Workers (OFWs). 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.

SECTION 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 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 and their 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;

SECTION 4. Overseas Filipino Workers Social Security and Retirement System. — Every public
hospital, public medical center, and other public medical institutions must establish an Indigent Children
Section for the accommodation of the free medical and dental services to Indigent Children. Private medical
institutions are encouraged to established a section to accommodate the free medical and dental services to
Indigent Children.

SECTION 5. Objectives. — The system shall have the following objectives:


a.) Provide retirement benefits and welfare assistance to OFWs;

b,) Develop a savings pension plan by which OFWs 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 OFWs; and
.) 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 the OFWs while extending the benefits of the System’s services to the rightful beneficiaries,

SECTION 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 both the land-based
overseas workers and the seamen or the seafarers, upon the recommendation of their respective
organization, 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 shall be
appointed by the board of trustees upon the recommendation of the chairman.

SECTION 7. Power 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;

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

4) 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;

©) Acquire property, real or personal, which may be necessary for the attainment of the
purposes of this Act,

£) Determine and fix the monthly contribution of the OFWs;
g) Sue and he 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.

SECTION 8. Chairman; Power and Functions — The Chairman shall have authority and responsibilty
of exercising the power and functions of the System. He shall be appointed by the President

‘The Chairman shall have the following powers and functions:

3) Formulate and implement policies and programs to attain the objectives and purpose of
the System;

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

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

4) Determine the functions- composition, and compensation of the personnel of the System:

©) Determine and fix the amount of contributions of employers of land-based and sea-based
OFWs.

£) Coordinate all policies and programs relating to OFWs as provided in this Act; and

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

SECTION 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.

SECTION 10. Compulsory Coverage — The System shall be compulsory upon all documented OFWs;
Provided, that 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.

SECTION 11. Separation from Employment— When a covered OFW is separated from employment,
the obligation to pay contribution from that employment shall cease at the end of the month of separation,
but he shall be credited with al contribution paid and shall be entitled to all benefits provided in this Act.

SECTION 12. Retirement Benefits — All covered OFWs who had paid at least one hundred twenty (120)
monthly contributions prior to the senlester 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 (50%) of the monthly pension and his dependents to the
dependents 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 (20) times the monthly pension or (b) the difference ot sixty (60)
times the monthly pension and the total monthly pensions by the System excluding the dependent's pension.

SECTION 13. Early Retirement and Volunteer Separation Benefits — Any OFW who voluntarily elects
in writing and in oath to retire prior to the age of forty-five (45) but who has served for a least fifteen-years
15 years overseas employment or separated from the overseas employment shall be paid retirement
separation benefits equivalent to fifty-percent (50%) of their monthly basic salary for every year of their
respective overseas employment 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.

SECTION 14. Retirement Fund — All OFWs who are duly registered with the Philippine Overseas
Worker's Administration (POEA) shall remit three percent (3%) of their gross monthly income for at leat
ten (10) years that shall be the Overseas Filipino Workers Retirement Funds, hereinafter, referred to as the
“Fund”,

SECTION 15. Source of Fund, — In addition to the monthly contributioin of 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 the fees charged by Philippine Intemational Airports to
outgoing OFWs;

c.) Ten percent (10%) from the fees charged by OFW training centers;

4.) Fifty Million Pesos (P50,000,000.00) annually from 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.

SECTION 16. Appropriation. — To effectively implement the provision 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 appropriation of the Office of the President, Thereafter, the amount
necessary for the continuous operation of the System shall be included in the annual General Appropriation
Act.

SECTION 17. Implementing Rules and Regulations. — The POEA, DBm, and DOLE shall within sixty
(60) days after the effectivity of this Act, promulgate the necessary rules and regulations for the
implementation of this Act.

SECTION 18, Repealing Clause. - All provisions of existing laws, presidential decrees or issuances,
executive orders, letters of instruction, administrative orders, rules and regulations contrary to or
inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly

SECTION 19. Separability Clause. — If any portion of this Act is declared unconstitutional, the same
shall not affect the validity and effectiveness of the other provisions not affected thereby.

SECTION 20, Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official


Gazette or in a newspaper of general circulation.

Approved,