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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. _______ 
Introduced by Representative Ron P. Salo 
EXPLANATORY NOTE 
Overseas Filipino Workers (OFWs) are integral to the growth and development 
of the Philippines, contributing significantly to the economy through their hard work, 
remittances, and sacrifices. Their dedication and perseverance often come at a great 
personal cost, as they face unique challenges and vulnerabilities while working 
abroad. 
In consultations conducted by the author in different parts of the world, it has 
become apparent that the establishment of a unique pension system for OFWs is one 
of their most enduring and urgent aspirations. After years of toiling in foreign lands and 
diligently sending their hard-earned money to their loved ones in the Philippines, they 
find themselves without adequate social protection in the twilight of their years. 
Therefore, their heartfelt aspiration is for the Philippine Government to establish a 
retirement plan that specifically caters to their needs and concerns. 
Currently, the Social Security System allows OFWs to become voluntary 
members through specific schemes. However, this approach does not fully resonate 
with the OFW community. Their resounding clamor is for a specific and distinct social 
security system designed explicitly for them—an exclusive framework that 
acknowledges the unique circumstances and vulnerabilities they face as overseas 
workers. 
Thus, it is imperative to establish a separate and dedicated Social Security and 
Retirement System specifically tailored to the needs of OFWs. This system would 
provide comprehensive social protection, ensuring their overall well-being. It would 
offer financial support in the event of job loss, disability, or death, providing a safety 
net for OFWs and their families during challenging times. Additionally, the system 
would establish a retirement fund, enabling OFWs to secure social and financial 
protection in their old age, granting them the dignity and peace of mind they deserve. 
The establishment of a separate system holds significant importance for 
multiple reasons. Firstly, it provides OFWs with a much-needed safety net, shielding 
them from the risks associated with their overseas employment. Secondly, it ensures 
the availability of a retirement fund, mitigating uncertainties regarding their post-
employment years. Lastly, it instills confidence in OFWs and their families, assuring 
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them that a comprehensive social safety net is in place to protect their rights and 
welfare. 
By establishing and implementing a Kabayan OFW Pension System (KOPS), the 
government takes a substantial step towards safeguarding the rights and welfare of 
OFWs. This dedicated system reflects the government's commitment to providing 
comprehensive social protection tailored to the unique circumstances and 
vulnerabilities of OFWs. Moreover, it underscores the significance of a social security 
and retirement system in promoting overall well-being and economic stability within 
society. Through the enactment of this bill, the government reaffirms its dedication to 
protecting and empowering our modern-day heroes—the OFWs who have contributed 
so significantly to the nation's progress. 
In view of the foregoing, approval of this bill is earnestly sought. 
RON P. SALO   
 KABAYAN Party List 


 
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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. _______ 
Introduced by Representative Ron P. Salo 
AN ACT  
ESTABLISHING THE KABAYAN OVERSEAS FILIPINO WORKERS PENSION 
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 the "Kabayan OFW 
Pension 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, the 
State shall establish a social security protection system that specifically considers their 
peculiar work conditions and caters to their needs.  
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
overseas employment certificate, or to a Filipino citizen employed abroad,
whether documented or non-documented;
b) "Non-documented OFW" refers to an OFW who does not have valid contract
of employment nor possesses the necessary documents to work abroad;
c) “Member” refers to an OFW who is enrolled in the System and is qualified
to receive the benefits and privileges provided in this Act;
d) “Beneficiaries" refers to the dependent spouse of an OFW, his dependent
children, whether legitimate or illegitimate who are the primary beneficiaries;
or in their absence, the dependent parents; or in the absence of the
foregoing, the person designated by the OFW;
e) "Dependent" refers to the legitimate, legitimated, or legally adopted child
who is unmarried, not gainfully employed, and not over twenty - one (21)
years of age; or over twenty-one (21) years of age, Provided, That he
is congenitally incapacitated and incapable of self-support, physically
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or mentally; legitimate spouse dependent for support upon the OFW; and 
the legitimate parents wholly dependent upon the covered OFW for regular 
support.  
 
f) “System” refers to the Kabayan Overseas Filipino Workers Pension System. 
 
SEC. 4. Kabayan OFW Pension System (KOPS). – To carry out the purposes 
of this Act, there is hereby established a Kabayan Overseas Filipino Workers Pension 
System (KOPS), hereinafter referred to as the “System”, which shall cover all 
documented OFWs.  
 
The benefits under the System shall be separate and distinct from other 
benefits that the OFWs are receiving from other programs of the government.  
 
The System shall be a corporate body, with principal place of business in Metro 
Manila, Philippines. In the discharge of its mandates under this Act, the System shall 
function and operate as an independent and accountable government-owned and -
controlled corporation (GOCC) within the corporate governance standards and 
principles of Republic Act No. 10149 (GCG Law), except as otherwise provided herein. 
 
SEC. 5. Objectives. – The System shall have the following objectives:  
 
a) Provide retirement benefits and social security assistance to OFWs and their 
dependents against various contingencies resulting in loss of income or financial 
burden; 
 
b) Develop and manage a sound social security system which shall promote 
social justice and provide adequate protection to the OFWs and their dependents 
against the risks of old-age, disability, sickness, death, unemployment and other 
contingencies;  
 
c) Ensure the financial viability of the System; 
 
d) Provide world class assistance to the OFWs and their dependents availing 
of the services of the System; and 
 
The System shall endeavor to strike a right balance in management and 
safekeeping of the funds contributed by OFWs while extending the benefits of 
the System to the OFW beneficiaries.  
 
SEC. 6. Board of Trustees. – The System shall be directed and 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 ex-officio chairman; 
b) Secretary of Finance, as ex-officio vice chairman; 
c) the Administrator of the Overseas Workers Welfare Administration 
(OWWA), as ex-officio member;  
d) the President of the System;  
e) one (1) representative from the land-based overseas workers;  


 
 
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f) one (1) representative from the sea-based overseas workers; and  
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 representative of the land-based overseas workers, sea-based overseas 
workers, manning agency and the recruitment agency shall be appointed by the 
President of the Philippines upon the recommendation of their respective 
organizations. They shall be of known competence, probity and integrity. In this regard, 
the DMW Secretary shall transmit to the President the recommendees of their 
respective organizations.  
 
The representative from the actuarial or finance industry shall be appointed by 
the President upon recommendation of the GCG, and must be of recognized expertise 
in any of the fields of social security, pension fund, insurance, investment, banking 
and finance, economics, or actuarial science, and with at least ten (10) years of 
managerial or leadership experience.  
 
The term of office of the 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 shall have been appointed and 
duly qualified. 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 GCG Law. 
 
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, consistent with provisions of this Act; 
 
d) Determine the benefits that will be received by the members, which shall be 
proportionate to their contributions and in accordance with the provision of 
this Act;  
 
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;  
 


 
 
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h) Establish offices locally or abroad, preferably within the MWOs, to ensure 
effective collection of contribution or availment of benefits by its members;  
 
i) Enter into agreements or contracts for such service and aid, as may be 
necessary for the proper and effective administration of the System; 
 
j) Manage the retirement fund and other sources of the System subject to 
pertinent accounting rules and regulations issued by the Commission on 
Audit (COA); 
 
k) Invest reserve funds in accordance with Section 18 of this Act; 
 
l) Approve its annual budget; 
 
m) Acquire property, real or personal, which may be necessary for the 
attainment of the purposes of this Act;  
 
n) Sue and be sued in court; 
 
o) Confirm the appointment, transfer or removal of personnel occupying 
managerial positions and higher;  
 
p) Establish a performance-based system on the personnel; and 
 
q) Perform 
such 
other 
acts 
as 
may 
be 
necessary 
for 
the 
effective implementation of this Act. 
 
SEC. 8. Fiduciary Duties of the Board of Trustees. – The fiduciary duties of 
a member of the Board include the following: 
 
a) 
Act with utmost and undivided loyalty to the System; 
 
b) 
Act with due care, extraordinary diligence, and skill in the conduct of 
business and exercise utmost good faith in all transactions relating to 
his/her duties to the System and its properties, and in his/her dealings 
with and for the System he/she is held to the same strict rule of honesty 
and fair dealing between himself/herself and his/her principal as other 
agent; 
 
c) 
Act for the benefit of the System and not for his/her own benefit; 
 
d) 
Not to profit as individual by virtue of his/her position and ensure that 
profits received by him/her from the System properties or businesses 
revert to the System and to hold the same as trustee for the benefit of 
the System and its members; 
 
e) 
Avoid conflicts of interest and not to acquire an interest adverse to or in 
conflict with that of the System while acting for the System or when 
dealing individually with third persons and declare any interest he/she 
may have in any particular matter before the Board; and 


 
 
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f) 
Apply sound business principles to ensure the financial viability of the 
System. 
 
SEC. 9. President of the System. – The President shall be appointed by the 
President of the Philippines and shall be a person of known competence, probity, 
integrity and recognized expertise in social security, pension fund, insurance, 
investment, banking and finance, economics, law, or actuarial science and with at least 
ten (10) years of managerial or leadership experience. He shall be the chief executive 
officer of the System.  
 
He shall serve for a term of four (4) years, which can be extended for another 
term of four (4) years. Provided, That he shall continue to hold office until his 
successors shall have been appointed and duly qualified. All vacancies, prior to the 
expiration of the term, shall be filled for the unexpired term only. 
 
 
The President may be removed for a valid cause, or for any of the following 
reasons in accordance with the requirement of due process: 
 
a) If he or she becomes physically or mentally incapacitated from discharging 
the duties and responsibilities of the office, and such incapacity has lasted 
for more than six (6) months; 
 
b) If he or she is guilty of acts or omissions which are of fraudulent or illegal or 
which are manifestly opposed to the aims and interests of the System; 
 
c) If he or she no longer possess the qualifications specified in this Act;  
 
d) Upon vote of loss of confidence by the absolute majority of the Board, 
including the Chairman and Vice-Chairman of the Board; or  
 
e) If he or she does not meet the standards of performance based on the 
evaluation by the Governance Commission for GOCCs under the GCG Law. 
 
SEC. 10. Powers and Functions of the President of the System. – The 
President shall have powers and functions of exercising the following powers and 
functions: 
 
a) Ensure the efficient and effective administration of the System;  
 
b) Ensure that the welfare of the members is taken-care of through efficient 
and effective implementation of the programs and benefits of the System;   
 
c) Implement policies and programs formulated by the Board to attain 
the objectives and purposes of the System; 
 
d) Ensure that the process of the System is streamlined, particularly in the 
availment of benefits by the members;  
 
e) Recommend policies and programs for approval by the Board;  


 
 
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f) Administer the System’s resources efficiently, effectively and economically, 
and recommend to the Board of Trustees the annual budget of the System;  
 
g) Determine the functions, composition, and compensation of the personnel 
of the System for approval of the Board; 
 
h) Recommend to the Board the appointment, transfer or removal of officers 
occupying managerial positions or higher;  
 
i) Appoint, transfer or remove personnel of the System occupying those lower 
than managerial positions;  
  
j) 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; 
  
k) Issue membership cards or assign membership numbers to OFW members, 
consistent with guidelines to be issued by the Board; and 
 
l) Such other powers and functions necessary to achieve the objectives of this 
Act. 
 
SEC. 11. Personnel. – Subject to Republic Act No. 10149 or the GOCC 
Governance Act of 2011, the Board shall determine its own staffing patterns 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. 12. Compulsory Coverage. – The System shall be compulsory upon 
all documented OFWs: Provided, That if an OFW 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 Republic Act No. 7699 otherwise known 
as the Portability Law, and any benefit or benefits accruing to the OFW from such 
membership shall be integrated into the System, upon application by the OFW. The 
OFW, however, may opt to retain his 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 OFW from availing of 
separate membership with other social security or retirement systems, whether public 
or private. 
 


 
 
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SEC. 13. Contribution of Members. – Beginning on the last day of the 
calendar month when an OFW’s compulsory coverage takes effect and every month 
thereafter during his employment, the employer of the OFW shall deduct and withhold 
from such monthly salary, wage, compensation or earnings, the OFW’s contribution in 
an amount corresponding to his salary, wage, compensation or earnings during the 
month in accordance with the monthly salary credits, the schedule and the rate of 
contributions as may be determined and fixed by the Board. 
 
SEC. 14. Contribution of Employers. – Beginning on the last day of the month 
when an OFW’s compulsory coverage takes effect and every month thereafter during 
his employment, his employer shall pay, with respect to such covered employee, the 
employer’s contribution in accordance with the schedule provided in this Act.  
 
Notwithstanding any contract to the contrary, an employer shall not deduct, 
directly or indirectly, from the compensation of the OFW.  
 
For purposes of this Act, the term employer may refer to the OFW’s direct 
employer, the foreign recruitment agency (FRA), the Philippine recruitment agency 
(PRA), or the manning agency as determined by the DMW. 
 
The FRA, PRA, and manning agency shall establish mechanisms to ensure the 
appropriate deduction and remittance of the OFW and the employer’s contribution to 
the System.  
 
The implementation of this paragraph shall be subject to Sections 20 and 21 of 
this Act. 
 
SEC. 15. 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.  
 
However, 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. 16. Benefits. – The Board shall set the schedule of benefits and 
guidelines for availment. The benefits shall be proportionate to their contributions, as 
well as to the contributions made by their employers.  
 
The following shall be considered mandatory benefits to the members, subject 
to the Guidelines by the Board:  
 
a. Retirement benefits  
b. Monthly pension   
c. Death benefits  
d. Permanent disability benefits  
e. Funeral benefits 
 


 
 
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When feasible and financially viable, the Board shall also provide the following 
benefits to the members:  
 
a. Sickness benefit  
b. Maternity leave benefit  
c. Repatriation benefit  
f. Dependent’s pension  
g. Unemployment or involuntary separation benefits 
 
Finally, the Board may adopt other benefits for the members. 
 
SEC. 17. 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) Fifty percent (50%) from the fees charged by the DMW from all PRAs, FRAs 
and manning agencies, including fees from penalties or other charges;  
b) Fifty percent (50%) from fees charged by the DMW from the Overseas 
Employment Certificate (OEC); 
c) Ten percent (10%) of the net income of the OFW Bank;  
d) Savings from the Assistance to Nationals (ATN) administered by the DFA, 
and Aksyon Fund by the DMW, if there are any;  
e) Grants or bequests from donors, local or foreign, to the System; and  
f) One Hundred Million Pesos (P100,000,000.00) annually for ten (10) years 
to be appropriated by the National Government as its contribution to the 
Fund of the System.  
 
The Guidelines shall consider best practices of the Social Security System 
(SSS) and the Government Service Insurance System (GSIS).  
 
 SEC. 18. Investment of Reserve Funds. – All revenues of the System that 
are not needed to meet the current administrative and operational expenses incidental 
to the carrying out of this Act shall be accumulated in a fund to be known as the 
"Reserve Fund".  
 
Any investments shall be approved by the Board upon recommendation of the 
President of the System, which shall also bear the recommendation of an investment 
expert or firm on the soundness of the transaction, taking into account the financial 
position of the System and best practices of other security system, such as the SSS 
or the GSIS.  
 
No portion of the Investment Reserve Fund or income thereof shall accrue to 
the general fund of the National Government, or to any of its agencies or 
instrumentalities, including government-owned or -controlled corporations, except as 
may be allowed under this Act: Provided, That no portion of the Investment Reserve 
Fund shall be invested for any purpose or any instrument, institution, or industry over 
and above the following cumulative ceilings as follows: 
 
60% in private securities 
5% in housing 
30% in real estate related investments 


 
 
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25% in short and medium-term member loans 
30% in government financial institutions and corporations 
15% in any particular industry 
7.5% in foreign-currency denominated investments 
5% in private-sponsored infrastructure projects without guarantee 
5% private and government sponsored infrastructure projects with guarantee 
5% in private and government sponsored infrastructure projects. 
 
SEC. 19. Exemption from Tax, Legal Process and Lien. – All laws to the 
contrary notwithstanding, the System and all its assets and properties, all contributions 
collected and all accruals thereto and income or investment earnings therefrom as well 
as all supplies, equipment, papers or documents shall be exempt from any tax, 
assessment, fee, charge, or customs or import duty; and all benefit payments made 
by the System shall likewise be exempt from all kinds of taxes, fees or charges, and 
shall not be liable to attachments, garnishments, levy or seizure by or under any legal 
or equitable process whatsoever, either before or after receipt by the person or 
persons entitled thereto, except to pay any debt of the member to the System. No tax 
measure of whatever nature enacted shall apply to the System, unless it expressly 
revokes the tax-exemption to the System. Any tax assessment imposed against the 
System shall be null and void. 
 
SEC. 20. DMW and MWO Coordination. – The DMW and its MWOs shall 
coordinate with their counterparts in the countries where OFWs are deployed to secure 
the concurrence of the officials of the country on the contributions to be made by the 
foreign employers. In this regard, the DMW shall ensure that the mandatory 
contribution from employers is included in the country specific standard contract 
entered into by the OFWs or with the manning agencies.  
 
SEC. 21. DMW Certification. – In the implementation of the mandatory 
contributions of employers, the DMW shall certify which countries or sectors it shall be 
implemented, consistent with the preceding paragraph.  
 
SEC. 22. Non-Transferability of Benefits. – The System, shall promptly pay 
the benefits provided in this Act to such persons as may be entitled thereto in 
accordance with the provisions of this Act: Provided, That the System shall pay the 
retirement benefits on the day of contingency to qualified members who have 
submitted the necessary documents at least six (6) months before: Provided, 
further, That the beneficiary who is a national of a foreign country which does not 
extend benefits to a Filipino beneficiary residing in the Philippines, or which is not 
recognized by the Philippines, shall not be entitled to receive any benefit under this 
Act: Provided, further, That notwithstanding the foregoing, where the best interest of 
the System will be served, the Board may direct payments without regard to nationality 
or country of residence: Provided, further, That if the recipient is a minor or a person 
incapable of administering his own affairs, the President or authorized official of the 
System shall appoint a representative under such terms and conditions as it may deem 
proper: Provided, further, That such appointment shall not be necessary in case the 
recipient is under the custody of or living with the parents or spouse of the member in 
which case the benefits shall be paid to such parents or spouse, as representative 
payee of the recipient. Such benefits are not transferable and no power of attorney or 
other document executed by those entitled thereto in favor of any agent, attorney or 


 
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any other person for the collection thereof on their behalf shall be recognized, except 
when they are physically unable to collect personally such benefits: Provided, further 
That in case of death benefits, if no beneficiary qualifies under this Act, said benefits 
shall be paid to the legal heirs in accordance with the law of succession. 
SEC. 23. Appropriations and Government Contribution. – 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. 
Thereafter, the amount necessary for the continuous operation of the System, but 
excluding 
benefits 
to 
the 
members, 
shall 
be 
included 
in 
the 
annual 
General Appropriations Act, until such time that the Department of Finance certifies 
that the System can already operate on its own.  
This amount shall be separate from the Government’s contribution as stated in 
Section 26 of this Act. 
SEC. 24. Records and Reports. –  The President of the System shall keep 
and cause to keep records of operations of the funds of the System and of 
disbursements thereof and all accounts of payments made out of said funds. During 
the month of January of each year, the President of the System shall prepare for 
submission to the President of the Philippines and to Congress of the Philippines a 
report of operations of the System during the preceding year, including statistical data 
on the number of persons covered and benefited, their occupations and employment 
status, the duration arid amount of benefits paid, the finances of the System at the 
close of the said year, and recommendations. He shall also cause to be published in 
two (2) newspapers of general circulation in the Philippines a synopsis of the annual 
report, showing in particular the status of the finances of the System and the benefits 
administered. 
SEC. 25. Implementing Rules and Regulations. – The DMW, in consultation 
with the OWWA, the Department of Finance (DOF), the BSP, and the SSS shall, within 
sixty (60) days after the effectivity of this Act, promulgate the necessary rules 
and regulations for the implementation of this Act.  
SEC. 26. 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. 
27. 
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. 28. Effectivity Clause. – This Act shall take effect fifteen (15) days 
following the completion of its publication in two (2) newspapers of general circulation.  
Approved.