GSIS & SSS: The

Philippine
Social Security
Machineries
Lowell Polinar
Justin Cebrian
Benjamin Tesoro
Bin Romero
Karlo 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.
2.

The general concept of social well-being; and

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.
2.
3.

Conditions for child to be considered dependent:

1.
2.
3.

Legal spouse entitled to support

Child, whether legitimate, legitimated, legally adopted or illegitimate
Parents dependent for support
Unmarried
Not gainfully employed
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.
2.

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

2.
3.

4.

Members of the AFP

Members of the PNP
Contractual
employees
who
have
no
employer-employee relationship with the
agency they serve
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.
2.

Employer's contributions
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 members

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 wouldnt 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 MEASURES
GSIS will be an organization
that is transparent,
autonomous, and beyond
public reproach.

~ Vision, GSIS Citizens 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 selfemployed, 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.
2.

3.
4.

5.

Those whose employment is purely casual and not for

purpose of occupation
Those who perform services on or in connection with
an alien vessel, if employed when such vessel is outside
the Philippines
Government employees
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
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:

SSS

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

Requirement for retirement benefits:

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

monthly retirement pension + 13th month pension

every December
if the member has dependent minor children =
dependents pension equivalent to 10% of the
members 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:

SSS

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

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 Bugante
SSS 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 Jurado
Manila 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 funds 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 agencys fund from drying up
and would add to greater benefits for
members

ANTI-FRAUD MEASURES

Annual Confirmation of Pensioners Program (ACOP)

Request for original records

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
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-providegovernment-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/

THANK YOU
FOR LISTENING!