Strengthening Social Security Commission Powers

Fiduciary duties and staffing rules

Section 3(a) imposes fiduciary duties on Commission members to: act with utmost and undivided loyalty to the SSS; exercise due care, extraordinary diligence and skill and utmost good faith; act for the benefit of the SSS and not personal benefit; avoid profiting personally from SSS position and ensure profits revert to the SSS as trustee; avoid conflicts of interest and declare interests before the Commission; and apply sound business principles to ensure the SSS’s financial soundness.
Section 3(a) provides that compensation, per diems, allowances, and incentives of appointive members of the Commission follow and are subject to Republic Act No. 10149.
Section 3(b) vests general conduct of operations and management functions in the SSS President, who serves as Chief Executive Officer and is immediately responsible for carrying out the SSS program and Commission policies.
Section 3(b) requires the SSS President to be appointed by the President of the Philippines and be of known competence, probity, integrity, and recognized expertise in social security, pension fund, insurance, investment, banking and finance, economics, management, law, or actuarial science.
Section 3(b) allows removal of the SSS President for valid cause, including:
- physical or mental incapacity lasting more than six (6) months;
- fraudulent or illegal acts or omissions, or acts manifestly opposed to SSS aims and interests;
- loss of qualifications specified in the Act;
- failure to meet performance standards based on evaluation by the Governance Commission for GOCCs under Republic Act No. 10149.
Section 3(c) requires creation of an Office of the Actuary to conduct actuarial studies and present recommendations on premiums, investments, and related matters; the Commission appoints the Chief Actuary on recommendation of the SSS President and prescribes duties and methods to ensure efficient, honest, economical administration.
Section 3(c) provides appointment and confirmation rules:
- personnel below the rank of Vice-President are appointed by the SSS President;
- personnel appointed by the SSS President (except those below assistant manager) require Commission confirmation;
- SSS personnel are selected only from civil service eligibles and are subject to civil service rules and regulations.
Section 3(c) grants exemption of the SSS from Republic Act No. 6758 and Republic Act No. 7430.
Section 3(c) restricts removal of the Chief Actuary to just causes including gross incompetence, gross inefficiency, disloyalty, conflict of interest, dishonesty, and serious misconduct.
Section 3(d) requires the Commission to fix reasonable compensation, allowances, and benefits of all SSS positions, including the President and Chief Executive Officer, based on comprehensive job analysis and audit, comparable with the compensation plans in GSIS, BSP, and other government financial institutions, and subject to periodic review by the Commission no more than once every four (4) years, without prejudice to merit reviews or increases based on productivity and efficiency.

Commission and SSS powers

Section 4(a) authorizes the Commission to formulate, adopt, amend, and/or rescind rules and regulations necessary to carry out the Act.
Section 4(a)(2) authorizes the Commission to establish a Provident Fund for members consisting of employer and employee contributions and contributions from self-employed, OFW, and voluntary members based on:
- SSS contribution rate in excess of twelve percent (12%), or
- monthly salary credit in excess of Twenty thousand pesos (P20,000.00) up to the prescribed maximum monthly salary credit,
  plus earnings, to pay benefits in addition to benefits provided for under the Act.
Section 4(a)(2) allows members to contribute voluntarily in excess of the prescribed contribution rate and/or maximum monthly salary credit subject to Commission rules.
Section 4(a)(3) requires maintenance of a Provident Fund consisting of contributions made by both the SSS and its officials and employees and their earnings, to pay benefits to officials and employees or their heirs under terms and conditions the Commission prescribes.
Section 4(a)(4) empowers the Commission to conduct continuing actuarial and statistical studies and valuations to readjust benefits, contributions, premium rates, interest rates, or allocation/reallocation of funds for contingencies covered, within Act limitations.
Section 4(a)(5) allows the Commission to approve restructuring proposals for payment of due but unremitted contributions and unpaid loan amortizations under Commission-prescribed terms.
Section 4(a)(6) authorizes cooperatives registered with the Cooperative Development Authority or associations registered with the appropriate government agency to act as collecting agents for SSS collections of their members, provided the SSS accredits them and requires bonding of persons authorized to collect.
Section 4(a)(7) allows compromise or release, in whole or in part, of interest, penalty, or civil liability to the SSS connected with investments authorized under Section 26 under terms the Commission prescribes.
Section 4(a)(8) permits, regardless of any law to the contrary, condonation, compromise, or release (in whole or in part) of penalties imposed upon delinquent social security contributions regardless of amount under valid terms when the employer’s financial position demonstrates clear inability to pay assessed delinquency arising from economic crisis, serious business losses or financial reverses, or resulting from natural calamity or man-made disaster without fault on the employer.
Section 4(a)(8) requires the Commission, immediately after passage of the Act, to institute a condonation of penalties of delinquent employers under Republic Act No. 10361, subject to Commission rules and regulations.
Section 4(a)(8) requires an annual report submission by the Commission to the Office of the President of the Philippines, the Senate, and the House of Representatives on exercise of the condonation/compromise power, including names and addresses of delinquent employers subjected to compromise or condonation, the amount involved, amount compromised or condoned, and underlying reasons and justifications, to ensure reasonable exercise and that the SSS is not unduly prejudiced.
Section 4(a)(9) mandates implementation of the schedule of contribution rates and minimum and maximum monthly salary credits effective January of each year shown, with the following contribution and salary credit schedule:
- 2019: Contribution rate 12% (Employer 8%, Employee 4%), minimum monthly salary credit P2,000.00, maximum monthly salary credit P20,000.00
- 2020: Contribution rate 12% (Employer 8%, Employee 4%), minimum P2,000.00, maximum P20,000.00
- 2021: Contribution rate 13% (Employer 8.5%, Employee 4.5%), minimum P3,000.00, maximum P25,000.00
- 2022: Contribution rate 13% (Employer 8.5%, Employee 4.5%), minimum P3,000.00, maximum P25,000.00
- 2023: Contribution rate 14% (Employer 9.5%, Employee 4.5%), minimum P4,000.00, maximum P30,000.00
- 2024: Contribution rate 14% (Employer 9.5%, Employee 4.5%), minimum P4,000.00, maximum P30,000.00
- 2025: Contribution rate 15% (Employer 10%, Employee 5%), minimum P5,000.00, maximum P35,000.00
Section 4(a)(9) provides that domestic workers or “kasambahays” under Republic Act No. 10361 or the Batas Kasambahay who receive monthly income lower than the minimum monthly salary credit shall pay contributions based on their actual monthly salary.
Section 4(a)(9) directs that members under compulsory coverage receiving monthly income below the minimum monthly salary credit shall be assessed contributions using the current minimum monthly salary credit, and those above the maximum shall be assessed using the maximum monthly salary credit, as provided in the Act.
Section 4(a)(9) requires the Commission to determine and fix the rate of penalty on unpaid loan amortizations from time to time through rules and regulations based on applicable actuarial studies, rate of benefits, inflation, and other relevant socioeconomic data.
Section 4(a)(10) requires the Commission to develop and administer a special social security program for workers with unique economic, social, and geographic situations as determined by the Commission, allowing proportionately calculated different contributions and benefits that are fair, equitable, actuarially sound, and viable.
Section 4(a)(10) mandates that the special program enjoys the same legal privileges as the regular social security program.
Section 4(a)(11) empowers the Commission to approve, confirm, pass upon, or review actions of the SSS in the proper and necessary exercise of SSS powers and duties.
Section 4(b) empowers the SSS (subject to Section 4(a)(11)) to:
- submit annually not later than April 30 a public report to the President and Congress covering preceding year activities in administration and enforcement and including information and recommendations on broad SSS policy development and perfection;
- require actuarial valuation reports every three (3) years or more frequently as needed and undertake actuarial studies for feasible benefit increases every four (4) years, including addition of new benefits, subject to Commission rules and ensuring actuarial soundness of the reserve fund;
- establish offices to cover provinces, cities, congressional districts, and foreign countries whenever expedient, necessary, and feasible, and inspect such offices periodically;
- enter into agreements or contracts for services and aid needed for proper, efficient, stable administration;
- adopt or approve annual and supplemental budgets of receipts and expenditures, authorize necessary capital and operating expenditures and disbursements, and manage budgets against available funds under the Act;
- set up its accounting system and provide necessary personnel;
- require reports and investigations of statistical and economic data for proper administration and development;
- acquire, develop, and dispose of property real or personal, including through joint ventures with public and/or private sector, to attain Act purposes; and prohibits injunctions or restraining orders from barring, impeding, or delaying sale/development/disposition of SSS property except on questions of ownership and national or public interest;
- acquire and hold property for housing projects preferably for low-income members, and for maintenance of hospitals and institutions for the sick, aged, and disabled, and schools for members and immediate families;
- enter agreements with GSIS or other entities for members transferring from one system to another, subject to Republic Act No. 7699 (Portability Law);
- sue and be sued;
- perform other corporate acts appropriate to enforce the Act.

Dispute settlement and judicial review

Section 5(a) provides that disputes under the Act involving coverage, benefits, contributions, penalties, or other related matters are cognizable by the Commission.
Section 5(a) provides that cases are heard by the Commission or any of its members, or by hearing officers duly authorized, and must be decided within a mandatory period of twenty (20) days after submission of evidence.
Section 5(a) requires that filing, determination, and settlement of disputes follow Commission rules and regulations.
Section 5(b) provides that decisions of the Commission become final and executory fifteen (15) days after notification if no appeal is taken as provided, and that judicial review is permitted only after exhaustion of remedies before the Commission.
Section 5(b) deems the Commission a party to any judicial action involving its decision and allows representation by an attorney employed by the Commission, or upon request by the Commission, by the Solicitor General or a public prosecutor.
Section 5(c) provides that Commission decisions may be reviewed by the Court of Appeals both on law and facts.
Section 5(c) provides that appeals from Commission decisions must be taken within fifteen (15) days from notification.
Section 5(c) provides that if the Commission decision involves only questions of law, review is by the Supreme Court.
Section 5(c) states that no appeal bond is required and the case is heard summarily, taking precedence over all cases except in the Supreme Court where criminal cases with life imprisonment or death imposed by the trial court take precedence.
Section 5(c) provides that no appeal acts as a supersedeas or stay of the Commission order unless ordered by the Commission, Court of Appeals, or Supreme Court.
Section 5(d) authorizes the Commission, motu proprio or on motion of an interested party, to issue a writ of execution to enforce final and executory decisions or awards, in the same manner as Regional Trial Court decisions by directing the city or provincial sheriff or sheriff appointed for enforcement; disobedience after being required may be punished for contempt upon Commission application under Rule 71 of the Rules of Court.

Investigations, oaths, and evidence powers

Section 6(a) makes the Chairman of the Commission on Audit the ex officio Auditor of the SSS, requiring checking and auditing of SSS accounts, funds, and properties with the same manner and frequency as government accounts under existing laws.
Section 6(a) provides that, as far as practicable, the Auditor has the same powers and duties as with checking and auditing public accounts, funds, and properties generally.
Section 6(b) makes the Secretary of Justice the ex officio counsel of the SSS, requiring his representative to act as legal adviser and counsel.
Section 7 authorizes, when authorized by the Commission, SSS officials or employees to administer oaths, take depositions, certify official acts, and issue subpoena and subpoena duces tecum to compel attendance of witnesses and production of books, papers, correspondence, and other records deemed necessary as evidence in questions arising under the Act.
Section 7 provides that contumacy is dealt with by the Commission in accordance with law.

Definitions governing coverage and benefits

Section 8(a) defines SSS as the Social Security System created by the Act.
Section 8(b) defines Commission as the Social Security Commission created by the Act.
Section 8(c) defines Employer as any person—natural or juridical—domestic or foreign carrying on trade, business, industry, undertaking, or activity in the Philippines using another person’s services under the employer’s orders regarding employment, excluding the government and its political subdivisions, branches, or instrumentalities (including government-owned or -controlled corporations), and provides that a self-employed person is both employee and employer at the same time.
Section 8(d) defines Employee as any person performing services with mental or physical efforts and receiving compensation, where there is an employer-employee relationship, and provides that a self-employed person is both employee and employer at the same time.
Section 8(e) defines Dependents as: the legal spouse entitled by law to receive support; unmarried legitimate, legitimated, legally adopted, and illegitimate children not gainfully employed and not over twenty-one (21) years of age, or if over twenty-one (21) when congenitally or while still a minor permanently incapacitated and incapable of self-support; and the parent receiving regular support.
Section 8(f) defines Compensation as actual remuneration for employment including the mandated cost-of-living allowance, plus cash value of remuneration paid in any medium other than cash, except that part of remuneration received during the month in excess of the maximum salary credit as provided in the Act.
Section 8(g) defines Monthly salary credit as the compensation base for contributions and benefits, with a maximum of Twenty thousand pesos (P20,000.00) until adjusted under Section 4(a)(9).
Section 8(h) defines Monthly as the period from one end of the last payroll period of the preceding month to the end of the last payroll period of the current month if compensation is hourly, daily, or weekly; otherwise, one (1) month.
Section 8(i) defines Contribution as the amount paid to the SSS by and on behalf of members in accordance with the schedule in the Act.
Section 8(j) defines Employment and provides exclusions including no employer-employee relationship under existing labor laws; service in employ of the Philippine Government or its instrumentalities or agencies; service in employ of foreign government or international organization or their wholly-owned instrumentality (with an agreement framework for inclusion in the SSS except those already covered by their civil service retirement systems), and other services performed by temporary and other employees excluded by Commission regulation; it also states that employees of bona fide independent contractors are not employees of the employer engaging the contractor.
Section 8(k) defines Beneficiaries as the dependent spouse until remarriage; dependent legitimate, legitimated, legally adopted, and illegitimate children as primary beneficiaries, with illegitimate children entitled to fifty percent (50%) of the share of legitimate children; if no legitimate children, illegitimate children entitled to one hundred percent (100%); otherwise, secondary beneficiaries are dependent parents, and if absent, any other person designated by the member as secondary beneficiary.
Section 8(l) defines Contingency to include retirement, death, disability, injury or sickness, and maternity.
Section 8(m) defines Average monthly salary credit as the greater of: the result of dividing the sum of the last sixty (60) monthly salary credits preceding the semester of contingency by sixty (60), or dividing the sum of all monthly salary credits paid prior to the semester of contingency by the number of monthly contributions paid in the same period; it provides that injury or sickness causing disability is deemed permanent disability for computing average monthly salary credit.
Section 8(n) defines Average daily salary credit as the result of dividing the sum of the six highest monthly salary credits in the twelve-month period preceding the semester of contingency by one hundred eighty (180).
Section 8(o) defines Semester as a period of two (2) consecutive quarters ending in the quarter of contingency.
Section 8(p) defines Quarter as a period of three (3) consecutive calendar months ending on March, June, September, and December.
Section 8(q) defines Credited years of service with separate formulas for members covered prior to January 1985 versus those covered in or after January 1985, plus a provision that the Commission may provide for a different number of contributions in a calendar year to be considered credited.
Section 8(r) defines Member as a worker covered under Section 9, Section 9-A, and Section 9-B.
Section 8(s) defines Self-employed as persons whose income is not derived from employment as defined, and includes workers enumerated in Section 9-A.
Section 8(t) defines Net earnings as net income before income taxes plus non-cash charges such as depreciation and depletion appearing in the regular financial statement.
Section 8(u) defines Fixed charges as recurring expenses such as amortization of debt discount and rentals for leased properties including interest on funded and unfunded debt.

Compulsory and voluntary coverage

Section 9(a) provides compulsory SSS coverage for all employees, including kasambahays or domestic workers, and their employers, not over sixty (60) years of age.
Section 9(a) preserves benefits already earned under private benefit plans existing at the time of approval by providing that such benefits shall not be discontinued, reduced, or impaired.
Section 9(a) requires integration of existing private benefit plans with the SSS plan where employer contribution to the private plan is more than required by the Act, so the employer pays only the contribution required to the SSS and continues contributing to the private plan less the contribution to SSS so total employer contribution remains the same as before compulsory coverage.
Section 9(a) provides that changes to benefits under the remaining private plan necessary due to reduced contributions must be subject to agreements between employers and employees concerned, while the employer continues to manage and control the private plan unless an agreement provides otherwise.
Section 9(a) affirms that nothing limits the right of employers and employees to agree on and adopt benefits over and above those provided under the Act.
Section 9(b) allows spouses who devote full time to managing the household and family affairs, unless they are also engaged in other vocation or employment subject to mandatory coverage, to be covered on a voluntary basis.
Section 9-A provides that coverage is also compulsory for self-employed persons as determined by the Commission under rules and regulations, including self-employed professionals; partners and single proprietors of businesses; actors and actresses, directors, scriptwriters, and news correspondents who are not employees under the definition; professional athletes, coaches, trainers, and jockeys; and individual farmers and fishermen; it also applies provisions applicable to covered employees to covered self-employed persons unless otherwise specified.
Section 9-B provides compulsory coverage for all sea-based and land-based OFWs as defined under Republic Act No. 8042, as amended by Republic Act No. 10022, provided they are not over sixty (60) years of age, and provides that benefit provisions under the Act apply to covered OFWs, including retirement, death, disability, funeral, sickness, and maternity.
Section 9-B provides that manning agencies are agents and considered employers of sea-based OFWs; for implementation, manning agencies are jointly and severally or solidarily liable with their principals for civil liabilities for violations of the Act, and persons with direct control, management, or direction of manning agencies are criminally liable for penalized acts or omissions despite Section 28(f).
Section 9-B provides that land-based OFWs are compulsory members treated as self-employed persons under Commission-prescribed rules and regulations.
Section 9-B(d) mandates DFA, DOLE, and involved agencies to negotiate bilateral labor agreements with OFW host countries to ensure required SSS contributions by employers of land-based OFWs; when such agreements exist, land-based OFWs are no longer treated as self-employed, and instead are treated as compulsorily covered employees with employer and employee shares as provided in the bilateral labor agreements and implementing administrative agreements.
Section 9-B(d) provides that in countries already extending social security coverage to OFWs, DFA through Philippine embassies and DOLE negotiate further agreements to serve the best interests of OFWs.
Section 9-B(e) mandates DFA, DOLE, and SSS to ensure compulsory coverage of OFWs through bilateral social security and labor agreements and other enforcement measures.
Section 9-B(f) allows OFWs, upon termination of overseas employment, to continue paying contributions on a voluntary basis to maintain rights to full benefits.
Section 9-B(g) allows Filipino permanent migrants, including Filipino immigrants, permanent residents, and naturalized citizens of host countries to be covered on a voluntary basis.

Effect of coverage, separation, and business interruption

Section 10 provides that compulsory coverage of the employer takes effect on the first day of the employer’s operation and compulsory coverage of the employee takes effect on the day of employment.
Section 10 provides that compulsory coverage of the self-employed person takes effect upon registration with the SSS.
Section 11 provides that when an employee under compulsory coverage is separated, the employer’s contribution on the employee’s account and the employer’s obligation to pay contributions arising from that employment cease at the end of the month of separation, while the employee is credited with all contributions paid and remains entitled to benefits under the Act; the separated employee may continue paying total contributions to maintain full benefit rights.
Section 11-A provides that if a self-employed member has no income in any given month, he is not required to pay contributions for that month.
Section 11-A allows a self-employed member to continue paying contributions under the same rules applicable to a separated employee member, but prohibits retroactive payment of contributions other than as prescribed under Section 22-A.

Pension and benefits—amounts and conditions

Section 12(a) provides monthly pension is the highest among:
- (1) P300.00 + 20% of the average monthly salary credit + 2% of the average monthly salary credit for each credited year of service in excess of ten (10) years;
- (2) 40% of the average monthly salary credit; or
- (3) P1,000.00