Question & AnswerQ&A (Republic Act No. 7742)
Republic Act No. 7742 amends Presidential Decree No. 1752, reinstating and modifying provisions related to the coverage, contributions, membership terms, investments, and regulations of the Home Development Mutual Fund (Pag-IBIG Fund).
All employees covered by the Social Security System and the Government Service Insurance System, and their respective employers are mandatorily covered. Employees earning less than P4,000 per month have voluntary coverage, with their employers still contributing accordingly.
Employees whose monthly compensation is less than P4,000 may opt for voluntary coverage; however, if they become members, their employers must contribute accordingly.
Employees earning not more than P1,500 per month shall contribute one percent (1%) of their monthly compensation to the Fund.
All employers shall contribute two percent (2%) of the monthly compensation of all covered employees.
Monthly Compensation means the basic monthly salary plus Cost of Living Allowance (COLA), with a maximum limit of P5,000 used in computing contributions.
No. Employers are not entitled to deduct from the wages or remuneration of employees or recover their contributions in any way.
Membership in the Fund is for a period of twenty (20) years, except when terminated earlier due to retirement, disability, insanity, death, departure from the country, or other causes as determined by the Board of Trustees.
Members who joined after the effectivity of the Act may withdraw their accumulated contributions after the tenth or fifteenth year of continuous membership, provided they have no outstanding housing loans, and this option is exercised only once.
The Fund must invest not less than seventy percent (70%) of its investible fund into housing in accordance with the Act.
Section 10(b), (c), and (d) of Executive Order No. 90 are repealed, and all laws, executive orders, rules, or regulations inconsistent with this Act are repealed or modified accordingly.
Every three years after the effectivity of the Act, Congress shall conduct a "sunset review" to evaluate the Fund's performance, impact, and accomplishments to determine if it merits continued existence.
This Act took effect fifteen (15) days after its complete publication in the Official Gazette or in at least two national newspapers of general circulation, whichever came first.