Objectives of the Fund
- Promote home ownership through affordable credit systems.
- Invest members' provident savings focusing on profitability and safety.
- Provide small, short-term loans and benefits.
- Foster self-reliance via a nationwide savings system.
Definitions of Key Terms
- Employer: any individual or entity in the Philippines using services of employees.
- Employee: person receiving compensation from an employer.
- Fund: Home Development Mutual Fund (HDMF) created under PD 1752 and amended laws.
- Member: mandatorily or voluntarily covered person registered in the Fund.
- Active Member: member updated on monthly contributions.
- Member-Borrower and Member-Saver: distinguished by outstanding housing loan.
- Total Accumulated Value: sum of employee and employer contributions plus dividends.
- Monthly Compensation includes basic salary and COLA, with a max of PHP 5,000 for contribution computation.
- Superior Plans and Distressed Employer: terms defining conditions for coverage waiver or suspension.
Membership Coverage and Portability
- Mandatory membership covers employees under SSS and GSIS; voluntary for those earning below PHP 4,000.
- Coverage effective January 1, 1995, for pre-existing non-members; new employees covered from employment start.
- Members retain Total Accumulated Value when changing employers or becoming self-employed.
Termination, Retirement, and Disability
- Membership terminates on maturity of 20 years, death, retirement, permanent total disability, insanity, permanent departure from the country, or health-based termination.
- Compulsory retirement at 65; early retirement options at 45 or 60 under specified conditions.
- Permanent total disability defined by specific injuries or conditions as approved by the Board.
Registration of Members
- Employers must register all covered employees per Fund requirements.
- Employers must register voluntary members (earning below PHP4,000) within 30 days of written intent.
- Non-compliance by employers incurs penalties.
Contribution Rates and Remittance
- Employees contribute 1% or 2% depending on income; employers contribute 2% of monthly compensation.
- Contributions gathered via payroll deductions, employers act as agents.
- Employers must remit contributions within 15 days after collection; penalties apply for delay or non-compliance.
- Effects on contributions during leave without pay, suspension, resignation, or separation outlined, distinguishing member-borrowers and member-savers.
Waiver or Suspension of Coverage
- Employers with existing sound provident/retirement or housing plans may apply for coverage waiver or suspension.
- Employers with capital impairment (25%+) may apply for waiver/suspension.
- Waivers valid for one year and renewable.
- Effects specify continued obligations for member-borrowers and options for member-savers.
- Procedures for application, decision, and appeal mechanisms defined.
- New provident or housing plans after RA 7742's effectivity do not qualify for waiver or suspension.
Benefits
- Members receive Total Accumulated Value on membership termination free of outstanding obligations.
- Death benefits to legal heirs in addition to accumulated value.
- Option to withdraw contributions after 10 or 15 years continuous membership if no outstanding loans.
- Annual dividends not less than 70% of net income are credited proportionally to members.
Claims and Disputes Adjudication
- Fund has exclusive jurisdiction over disputes and claims related to its provisions.
- Decision of Fund President final after 30 days if not appealed; Board of Trustees' decision final after 15 days.
- Death proof requires certified death certificate or acceptable equivalent.
Administration of the Fund
- Administration costs capped at 2% of prior year net Fund assets.
- Commission on Audit acts as ex-officio auditor; Board may also contract independent audits.
- Fund and its assets exempt from taxes; payments to members protected from legal processes except for debts to Fund.
- At least 70% of investible funds must be invested in housing per National Shelter Program.
- Fund authorized to inspect employers to ensure compliance.
Miscellaneous Provisions
- Private employers may treat Fund coverage as substitute retirement plan under the Labor Code if consistent with agreements.
- Unclaimed contributions after 10 years post age 65 transferred to a Board-established reserve.
Sunset Review
- Congress conducts a systematic review every 3 years to assess Fund's continued existence based on performance.
Penalties and Enforcement
- Employers failing/refusing to comply with registration, collection, and remittance provisions face fines up to double amount due and/or imprisonment up to 6 years.
- Penalties extend to corporate officers in offending corporations.
- Prior inconsistent rules repealed.
- Rules effective 15 days after publication in general circulation newspapers.