GSIS & SSS: The Philippine Social Security MachineriesLowell PolinarJustin Cebrian Benjamin TesoroBin RomeroKarlo Talingdan

SOCIAL SECURITY SOCIAL SECURITY

Article 22, Universal Declaration of Human Rights:

"Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality."

Social security refers to two things:1. The general concept of social well-being; and2. The systems that ensure it.

SOCIAL SECURITY IN THE PHILIPPINES The GSIS and the SSS are two of three agencies tasked

with administering social security in the Philippines. Both agencies provide income support to employees

(government employees for the GSIS, private employees for the SSS) and their families in times of contingencies like death, old age, sickness, and disability arising from work

Both are financed out of members’ contributions (and that of their employers), and are mandatory, publicly-managed, and benefit-driven, with no less than the government guaranteeing their solvency to the level of benefits prescribed by the law

THE GSIS The Government Service Insurance System

(GSIS) is a social insurance institution created under Commonwealth Act Number 186 that was passed on November 14, 1936, and later amended under Republic Act No. 8291 dated June 24, 1997

To secure the future of all employees of the Philippine government, the GSIS provides and administers a pension fund that has the following social security benefits: compulsory life insurance, optional life insurance, retirement benefits, and disability benefits for work-related accidents and death benefits

WHO ARE COVERED EMPLOYER - the national government, its

political subdivisions, branches, agencies or instrumentalities, including GOCCs and financial institutions with original charters, the constitutional commissions, and the judiciary

EMPLOYEE - any person receiving compensation while in service of an employer as defined herein, whether by election or appointment

WHO ARE COVERED Dependents:

1. Legal spouse entitled to support2. Child, whether legitimate, legitimated, legally adopted or illegitimate3. Parents dependent for support

Conditions for child to be considered dependent:1. Unmarried2. Not gainfully employed3. Not over the age of majority, OR incapable of supporting himself either

physically or mentally prior to 21 years of age or the age of majority, as the case may be

Beneficiaries:1. PRIMARY: (a) legal dependent spouse (until remarriage); and (b)

dependent children2. SECONDARY: (a) dependent parents; and (b) legitimate descendants

subject to restrictions on dependent children, legitimate descendants

WHO ARE COVERED Coverage:

Compulsory: for all employees receiving compensation who have not reached the compulsory retirement age, irrespective of employment status

Exceptions from coverage:1. Members of the AFP2. Members of the PNP3. Contractual employees who have no employer-

employee relationship with the agency they serve4. Members of the judiciary and the constitutional

commissions: covered by life insurance only

AVAILABLE BENEFITS ALL MEMBERS:

life insurance retirement disability survivorship separation unemployment

JUDICIARY: life insurance ONLY - all tax exempt

SOURCE OF FUNDING Funding:

1. Employer's contributions2. Employee's/member's contributions

RE: BENEFITS Contribution rate: 21% of the member's monthly

compensation (9% on the part of the employee, and 12% for the employer [including the 4% premium for life insurance]) Compensation: the basic pay or salary received by an

employee, pursuant to his election/appointment, excluding per diems, bonuses, overtime pay, honoraria, allowances and any other emoluments received in addition to the basic pay

Basis of claim: work-connected disability exempt from liability where permanent disability due to his grave misconduct, habitual intoxication, or willful intention to kill himself or another (Sec. 15-17)

Effects of separation from employment: a member separated from the service shall continue to be a member, and shall be entitled to whatever benefits he has qualified to in the event of any contingency compensable under the act

Prescriptive period: 4 years from date of contingency

EXEMPTION FROM TAXES, LEGAL PROCESSES, AND LIENS Property, assets, and revenues of the

GSIS are all exempt from taxes, and all benefits paid by the GSIS are likewise exempt from taxes, assessments, fees, charges, and duties of all kinds

DISPUTE SETTLEMENT Any dispute arising under RA 8291 falls

under the jurisdiction of the GSIS, to be decided by it within 30 days from receipt of the hearing officer's findings and recommendations or 30 days after submission for decision

Appeal: CA SC

FRAUD IN THE GSIS? Anomalous deductions from a

member’s policy even if the member does not procure any loan therefrom (mid-2000s) The difficulty in this apparently lies in

proving that you did not procure a loan, since GSIS staff tend to stand by what appears in their records

Some members go so far as to assume that this is an inside job

FRAUD IN THE GSIS? Fixers

A person who uses influence or makes arrangements for another, especially by improper or unlawful means

They will offer their "services" to members, so as to take care of, say, applying for death benefits

The fixer somehow gets the benefit, then absconds, leaving the member behind (and in quite a fix [pun intended])

FRAUD IN THE GSIS? Pension checks getting lost

“The check payment system was just too administratively burdensome. It had been subject to a lot of fraud. We had to undergo changes in our designs but even [with] that [change] in the checks, some unscrupulous persons [still] take advantage and cash those checks.“Some checks would also get lost in the mail. And our pensioners wouldn’t know how many checks they lost. They would become victims of unscrupulous persons.”

Enriqueta Disuanco, GSIS Executive VP of Operations, in an interview w/ Asianjournal.com dated May 2, 2008

ANTI-FRAUD MEASURESGSIS will be an organization

that is transparent, autonomous, and beyond public

reproach.~ Vision, GSIS Citizen’s Charter

Increased vigilance against fixers

The GSIS encourages members to report on fixers and other instances of fraudulent activity or negligence to the appropriate authorities

ANTI-FRAUD MEASURES G-W@PS and e-cards 2008: the GSIS implemented the G-W@PS (GSIS Wireless Automated

Processing System), designed to do away with the fraud attending the previous check-based system. Members can register for availing of the G-W@PS by way of giving a fingerprint, for which they shall be issued an e-card. Monthly pensions can be deposited directly to the pensioner's bank, which can be received at their local bank ATM.

The e-card also serves as an official GSIS ID, and a transactional and debit card.

2012: the GSIS and Globe Telecom have joined hands in the increased deployment of automated processing system kiosks in government offices. The G-W@PS kiosks look like ATMs but offer a good number of services, allowing members to update their account information, check the status of their loan payments, or even apply for a loan.

THE SSS The Social Security System (SSS),

created by virtue of RA 1161, provides social security protection to employees from the private sector and those who are self-employed, and their families. RA 8282, the Social Security Act of 1997, expanded the SSS' coverage and increased the benefits it affords its members, among others.

WHO ARE COVERED Covers on a compulsory basis the following

persons (who should not be over 60 y/o): all workers in the private sector all self-employed persons with a monthly net income

of at least P1,000, including workers in the informal sector

all household helpers with a monthly income of at least P1,000

all Filipino seafarers all employees of a foreign government, international

organization, or their wholly owned instrumentality based in the Philippines

WHO ARE COVERED Covers on a voluntary basis:

parent, spouse, or child below 21 y/o, of the owner of a single proprietorship

members separate from employment and who would like to continue paying his contributions

overseas worker employed in a country that has signed a bilateral agreement w/ the PH government to include Filipinos and their nationals in the social security coverage of either country

Filipinos recruited by a foreign-based employer for employment abroad, or Filipinos who legitimately entered a foreign country (e.g. as a student or a tourist) an are eventually employed

persons not yet members of the SSS (legally married to a currently employed and actively paying SSS member) and who devotes his time fully in the management of his household and family affairs

WHO ARE (NOT) COVERED EXCEPTIONS FROM COVERAGE:1. Those whose employment is purely casual and not for

purpose of occupation2. Those who perform services on or in connection with an

alien vessel, if employed when such vessel is outside the Philippines

3. Government employees4. Those who perform services in the employ of a foreign

government, or international organizations or a wholly owned instrumentality employing workers in the Philippines or employing Filipinos outside the Philippines

5. Temporary employees an other employees excluded by SSS regulation

RE: BENEFITS SSS contribution rate:

[SSS Circ. 2013-010, effective Jan. 2014] 11% of a worker's monthly salary credit (MSC), 7.37% of which is share by the employer (leaving 3.63% to be shouldered by the employee)

Self-employed persons, OFWs, and voluntary members shoulder the whole 11%

Contribution rate is applied to 31 MSC brackets (min. P1,000 [P5,000 for OCWs], max. P16,000), w/c means that the monthly contribution per member can be anywhere from P110 to P1,760

COMPARISON OF BENEFITS

GSIS Value of the benefit for each

type of benefit = anchored on a member's BMP (basic monthly pension)

37.5% of the average monthly compensation in the last three years + 2.5% of the average monthly compensation in the last three years for each year of service in excess of 15 years

The BMP cannot exceed 90% of the average monthly compensation.

SSS Monthly pension = highest of the

following amounts: P300+20% of average monthly salary

credit + 2% of the average monthly salary credit for each credited year in excess of 10 years

40% of average monthly salary credit P1,000, provided that the monthly

pension is not to be paid for an aggregate amount of less than 60 months

Minimum amount of pension = P1,200 for those with at least 10 credited years of service, P2,400 for those with at least 20 years

COMPARISON OF BENEFITS

GSIS Requirement for retirement benefits:

at least 15 years of services rendered

at least 60 y/0 at the time of retirement

not receiving a monthly pension from permanent total disability

Retirement benefit = either: lump sum payment equivalent to 60

months of the BMP + old age pension benefit equal to the BMP payable monthly for life starting upon the expiration of the five-year guaranteed period covered by the lump sum; or

cash payment equivalent to 18 months of the BMP + monthly pension for life payable immediately equivalent to the BMP

SSS Requirement for retirement benefits:

at least 60 y/o (optional retirement), separated from employment, or has ceased to be self-employed, and has paid at least 120 monthly contributions prior to the semester of retirement; or

65 y/o (mandatory retirement), and has paid at least 120 monthly contributions prior to the semester of retirement

Retirement benefits: monthly retirement pension + 13th month pension

every December if the member has dependent minor children =

dependent’s pension equivalent to 10% of the member’s monthly pension or P250, whichever is higher (only five children, beginning from the youngest, are entitled thereto)

Lowest monthly retirement pension: P1,200 if the member has 120 monthly

contributions or with at least 10 credited years of service

P2,400 if with at least 20 credited years of service

COMPARISON OF BENEFITS

GSIS when a member becomes disabled, he

gets: a waiver of the monthly premiums on the policy

from the time the insured member was found to be disable and while the disability lasts

basic monthly pension provided the member has paid at least 36 monthly contributions

the total face value of the policy on maturity date or earlier contingency

permanent disability = permanent disability benefits in the form of cash payment equivalent to 100% of the average monthly compensation for every year of service he paid contributions but not less than P12,000 provided that he is in service at the time of the disability, or if separate therefrom, he has paid 36 monthly contributions w/in the last 5 years prior to the disability, or has paid at least 180 monthly contributions prior

SSS when a member becomes

disabled and can no longer render service: monthly pension based on the

member's number of paid contributions and his/her years of membership

lowest monthly pension = P1,000 for members w/ less than 10 calendar years of service (CYS); P1,200 for those w/ at least 10 CYS; P2,400 for whose w/ at least 20 CYS

pension will be suspended if the pensioner recovers from his illness, resumes employment, or fails to report for physical examination when notified by the SSS

lifetime monthly pension for completely and permanently disabled members

FRAUD IN THE SSS? Falsified declarations on application

Rampant before the computerization of SSS One may opt to fake his/her birth date so as

to have a younger age and be able to work or to have an older age to immediately gain pension proceeds

The falsification of other essential requirements like name, address, and status was fixed by the computerization of membership data and finger print scans

FRAUD IN THE SSS? SSS loan application of a person

done by another An individual may apply for loans under

another person covered by the SSS where the latter will be the guarantor without knowing of the loan transaction

FRAUD IN THE SSS? Fake pension checks (Dec. 2013)

“There is a case of allegedly forfeited check reported to our office where the issuing bank is Landbank of the Philippines,”

Marisu BuganteSSS Vice President for Public Affairs

The only authorized issuing bank of the SSS is the Philippine National Bank; also, the only signatory in the check should be the SSS President

FRAUD IN THE SSS? Multiple SSS applications

Before the full computerization of SSS, some opted to apply in several branches to have several accounts, thus, receiving several payouts from each

This was solved by the scanning and recording of finger prints from applicants and covered persons when SSS became fully computerized.

FRAUD IN THE SSS? Unauthorized withdrawals via ATM

Withdrawal transactions via automated teller machine is possible using ATM cards issued by several banking institutions as a collaborative drive to speed up the release process of requests and benefits such as loans.

FRAUD IN THE SSS? Failure or refusal of the employer to pay or

remit the contributions of the covered employee The employer shoulders 7.37% of the contribution while

the employee will pay 3.63% for a total of 11% monthly contribution rate

However, the most common problem in this area is the incomplete or worse, the non-remittance of the employer of the required 7.37% contribution in favor of the employee

The effect of this would render the employee unable to avail any SSS benefit unless payment of the deficiency is made

ANOMALIES IN THE SSS Union Bank Dividends (2013)

“x x x Social Security System officials led by SSS President/CEO Emilio de Quiros Jr. had been granted by the Union Bank dividends and bonuses as representatives to the bank board. SSS has interest in the bank. I asked whether the SSS officials pocketed the money or gave them back to the SSS, since the money was given them not because they, as individuals, were shareholders but because they were representing the SSS.My comment drew instant reaction from the SSS that De Quiros et al gave back to the SSS the dividends and bonuses they received.”

Atty. Emil JuradoManila Standard Today

ANOMALIES IN THE SSS SSS Fat Bonus (2013) SSS Commissioners, who pocketed bonuses for 2012 were: Juan

Santos, chairman, P1.17 million; Emilio de Quiros Jr., SSS president and SSS vice chairman, P1.04 million; Diana Pardo-Aguilar, P1.33 million; Daniel Edralin, P1.12 million, Eliza Antonino, P968,000; Marianita Mendoza, P1.02 million; Ibarra Malonzo, P1.41 million; and Bienvenido Laguesma, P1.30 million.

De Quiros Jr. justified the granting of the bonus by citing the pension fund’s net income of P36.2 billion in 2012, which was 42 percent higher than the previous year.

The income came from profits in investments and premium contributions from members employed in the private sector, minus operational expenses and payment of members’ benefits.

ANOMALIES IN THE SSS SSS Premium Hike (2014)

The premium was raised to 11% from the previous 10.4% starting January 2014

Presidential Communications Operations Office (PCOO) Secretary Herminio Coloma said that the increase was needed to prevent the agency’s fund from drying up and would add to greater benefits for members

ANTI-FRAUD MEASURES Annual Confirmation of Pensioners Program (ACOP)

All pensioners were required to report personally to any SSS office on their pension “anniversary” month and accomplish forms, thereby proving that they were still alive, disabled and have not remarried

Request for original records The applicant is advised to produce the original records of his

birth certificate and any other official document for validation Finger Print Identification

Applicants are required to scan their finger prints to detect whether there is an existing specimen of it in the roster of SSS pensioners to prevent multiple accounts under one pensioner

SOURCES http://en.wikipedia.org/wiki/Social_security http://manilastandardtoday.com/2013/08/16/anti-poor-anti-fraud-pension-measures/ http://newsinfo.inquirer.net/540949/warning-up-on-fake-pension-checks http://newsinfo.inquirer.net/563803/sc-defers-action-on-petition-vs-hike-in-sss-contributions http://www.manilatimes.net/sss-members-pay-more-officials-get-bonuses/42681/ http://manilastandardtoday.com/2013/10/09/aquinos-silence-on-sss-anomalies/ An interview with Ms. Jackylene Ocampo Pagal (Cashier Admin - SSS Manila) a trip to the GSIS Main Office in Pasay "SALIENT FEATURES OF THE SSS LAW AND GSIS LAW" "A Review of Social Insurance in the Philippines" by Rosario G. Manasan "Social Insurance in the Philippines: Responding to the Global Financial Crisis and Beyond"

by Rosario G. Manasan "A Sturdy Ship: The 2009 GSIS Annual Report“ http://www.biometricupdate.com/201208/philippines-using-biometrics-to-provide-

government-pensions "GSIS taps Land Bank as additional bank for pensioners, members"

(http://www.gsis.gov.ph/print.php?id=185) http://asianjournal.wordpress.com/2008/05/02/the-gsis-e-card-system-controversy/

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