Objectives and policy intent
- The program ensures registration of unregistered employers with the Fund.
- The program compels employers to settle their provident obligations.
Coverage and who may apply
- The Guidelines apply to all unregistered and delinquent registered employers who deducted monthly savings (MS) from employees but failed to remit the same to the Fund.
- The Guidelines apply to all employers with pending applications for plan of payment resulting from enforcement efforts of the Fund who were not qualified to apply under Circular 387.
- Only eligible employers may avail themselves of the program under the one-year availability period and complete-document requirement.
Provident obligations to be paid
- Employers must pay the Total Unremitted Monthly Mandatory Savings, including the employer counterpart and employee contribution, computed as of the payment date of the provident obligation.
- Employers must pay deprived dividends, computed as of the payment date of the provident obligation.
- Employers must pay Total Assessed Penalties (TAP), where TAP are computed as of the payment date of the provident obligation.
- Employers must calculate and settle all required components as of the actual payment date of the provident obligation.
TAP discounts and payment options
- Employers are granted a specific discount on the TAP depending on the payment option selected.
- Full Payment discount: Employers receive a 70% discount on TAP for full settlement of the total unremitted monthly mandatory savings, deprived dividends, and the remaining 30% of the TAP.
- Deadline for Full Payment: Full payment must be made within thirty (30) calendar days from the date of approval of the discount; otherwise, the approval is forfeited.
- Employers who signified intent to pay in full but later opt for a plan of payment receive discounts under Plan of Payment rules if they submit plans of payment not later than the 25th day from the date of approval of application for penalty condonation; otherwise, the approval is forfeited.
Plan of payment terms and enforcement
- Employers opting for a plan of payment receive TAP discounts based on settlement term:
- 1 year or less: 60% discount on TAP.
- More than 1 year to 2 years: 50% discount on TAP.
- More than 2 years to 3 years: 40% discount on TAP.
- More than 3 years to 4 years: 30% discount on TAP.
- More than 4 years to 5 years: 20% discount on TAP.
- The total unpaid balance under the approved plan is charged an interest of 0.50% per month until full settlement.
- If the employer fails to pay any installment due under the approved plan, all other penalties are re-imposed and appropriate civil and/or criminal actions are filed against the delinquent employer.
- Payment under the plan starts exactly one month after the date of approval of application for penalty condonation, which is treated as the due date under the plan of payment.
- The employer must issue the corresponding number of post-dated checks (PDCs) to cover the approved plan of payment.
Availability, application processing, and document completeness
- Eligible employers may avail of the program within one year from the effectivity of these Guidelines.
- The Fund accepts and processes only applications with complete documents.
Resolution of interpretation and implementation issues
- Any issue in interpretation and implementation is resolved, as much as possible, by the concerned officer.
- Matters not satisfactorily resolved are escalated to the next higher approving authority.