R.A. 2658

REPUBLIC ACT No. 2658

AN ACT TO AMEND CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED ELEVEN HUNDRED AND SIXTY-ONE AS AMENDED BY REPUBLIC ACT NUMBERED SEVENTEEN HUNDRED AND NINETY-TWO, OTHERWISE KNOWN AS "THE SOCIAL SECURITY ACT OF 1954."

Section 1. Section three of Republic Act Numbered Eleven hundred and sixty-one, as amended by Republic Act Numbered Seventeen hundred and ninety-two, is further amended to read as follows:

"Sec. 3. Social Security System. (a) To carry out the purposes of this Act, the Social Security System with principal place of business in Manila or Quezon City, Philippines, is hereby created. The system shall be directed and controlled by a Social Security Commission composed of the Secretary of Labor and six appointive members, two of whom shall represent the labor group, two, the management group and two, the general public, to be appointed by the President with the consent of the Commission on Appointments. The Chairman of the Commission shall be designated by the President of the Philippines. The term of the appointive members shall be three years: Provided, That the terms of the first six appointive members shall be one, two and three years for every two members, respectively. All vacancies, except through the expiration of the term, shall be filled for the unexpired term only. The appointive members of the Commission shall receive twenty-five pesos per diem for each meeting actually attended by them: Provided, That no compensation shall be paid for more than one meeting a week.

Section 2. Paragraphs (j) and (k) of Section four of the same Act are changed to (k) and (l), respectively, and a new paragraph to be known as paragraph (j) is inserted in the same section, to read as follows:

Section 3. Paragraph (a) of Section five of the same Act is amended to read as follows:

"Sec. 5. (a) Settlement of claims. The filing, determination and settlement of claims shall be governed by the rules and regulations promulgated by the Commission."

Section 4. Paragraphs (d), (e), (f) and (g), and subparagraphs (1) and (9) of paragraph ( j) of Section eight of the same Act are amended and a new paragraph to be known as paragraph (k) is added to the same section to read as follows:

Section 5. Section nine of the same Act is further amended to read as follows:

"Sec. 9. Compulsory coverage. Coverage in the System shall be compulsory upon all employees between the ages of sixteen and sixty years, inclusive, and their employers: Provided, That any benefit already earned by employees under private benefit plans existing at the time of the approval of this Act shall not be discontinued, reduced or otherwise impaired: Provided, further, That private benefit plans which are existing and in force at the time of the compulsory coverage shall be integrated with the plan of the System in such a way where the employer's contribution to his private plan is more than that required of him in this Act he shall pay to the System only the contribution required of him and he shall continue his contributions to such private plan less his contribution to the System so that the employer's total contribution to his private benefit plan and to the Social Security System shall be the same as his contribution to his private plan before the compulsory coverage: Provided, further, That any changes, adjustments, modifications, eliminations or improvements in the benefits to be available under the remaining private plan, which may be necessary to adopt by reason of the reduced contribution thereto as a result of the integration, shall be subject to agreements between the employers and employees concerned: Provided, further, That the private benefit plan which the employer shall continue for his employees shall remain under the employer's management and control unless there is an existing agreement to the contrary: Provided, finally, That nothing in this Act shall be construed as a limitation on the right of employers and employees to agree and adopt benefits which are over and above those provided under this Act."

Section 6. Section ten of the same Act is further amended to read as follows:

"Sec. 10. Effective date of coverage. Compulsory coverage of the employer shall take effect on the first day of his operation, and that of the employee on the date of his employment."

Section 7. Section twelve of the same Act is further amended to read as follows:

"Sec. 12. Retirement benefits. (a) Upon reaching the age of sixty years and after having paid at least one hundred twenty monthly contributions to the System, a covered employee shall have the option to retire and he shall then be entitled for as long as he lives but in no case for less than five years to a monthly basic pension amount to be computed as follows:

Section 8. Section thirteen of the same Act is further amended to read as follows:

"Sec. 13. Death and permanent disability benefits. (a) Upon the covered employee's death or total and permanent disability, he or in case of his death, his beneficiaries shall be entitled to a basic lump sum amount equivalent to the total twelve highest monthly salary credits within the thirty-six calendar month period preceding his death or total and permanent disability excluding the month of death or total and permanent disability, or twelve times the total monthly salary credits divided by the total number of monthly contributions, whichever is greater, plus five-twelfths of one per centum of the basic lump sum amount for each monthly contribution in excess of one hundred twenty monthly contributions: Provided, That the following conditions are satisfied at the time of death or total and permanent disability:

Section 9. Section fourteen of the same Act is further amended to read as follows:

"Sec. 14. Sickness Benefit. (a) Under such rules and conditions as the Commission may prescribe, any covered employee under this Act who has paid at least twelve monthly contributions and who, on account of sickness or bodily injury is confined in a hospital, or elsewhere with the Commission's approval, shall, for each day of such confinement, be paid by his employer, or by the System if such person is unemployed or is a voluntary member, an allowance equivalent to thirty per centum of the total monthly salary credits within the twelve-month period immediately preceding his confinement divided by three hundred, plus ten per centum thereof for each dependent duly reported to the System prior to his current confinement if he has any, but in no case shall the total amount of such daily allowance be less than one peso and fifty centavos nor exceed seven pesos or seventy per centum of the total monthly salary credits within the twelve-month period immediately preceding his confinement divided by three hundred, whichever is the smaller amount, nor paid for a period longer than one hundred twenty days in one calendar year; nor shall any unused portion of the one hundred twenty days sick benefits granted under this section be carried forward and added to the total period allowable in the subsequent year: Provided, That such allowance shall begin only after the first seven days of confinement, except when such confinement is due to injury or to any acute disease; but in no case shall such allowance begin before all sick leaves of absence with pay, if any, to the credit of the employee shall have been exhausted: Provided, further, That payment of such allowances shall be promptly made by the employer every regular pay day, or on the fifteenth and last day of each month in the case of direct payment by the System, for as long as such allowances are due and payable.

Section 10. Section fifteen of the same Act is further amended to read as follows:

"Sec. 15. Non-transferability of benefit. The System shall pay the benefits provided for in this Act to such persons as may be entitled thereto in accordance with the provisions of this Act. Such benefits are not transferable, and no power of attorney or other document executed by those entitled thereto in favor of any agent, attorney, or any other individual for the collection thereof in their behalf shall be recognized except when they are physically and legally unable to collect personally such benefits: Provided, however, That in the case of death benefits, if no beneficiary has been designated or the designation thereof is void, said benefits shall be paid to the legal heirs in accordance with the laws of succession."

Section 11. Section eighteen of the same Act is further amended to read as follows:

"Sec. 18. Employee's contribution. Beginning as of the last day of the calendar month when an employee's compulsory coverage takes effect and every month thereafter during his employment, the employer shall deduct and withhold from such employee's monthly salary, wage, compensation or earnings the employee's contribution in an amount corresponding to his salary, wage, compensation or earnings during the month in accordance with the following schedule:

Section 12. Section nineteen of the same Act is further amended to read as follows:

"Sec. 19. Employer's contribution. Beginning as of the last day of the month when an employee's compulsory coverage takes effect and every month thereafter during his employment, his employer shall pay, with respect to such covered employee, the employer's contribution in accordance with the schedule indicated in Section eighteen of this Act. Notwithstanding any contract to the contrary, an employer shall not deduct, directly or indirectly, from the compensation of his employees covered by the System or otherwise recover from them the employer's contribution with respect to such employees."

Section 13. Paragraph (a) of Section twenty-two of the same Act is further amended to read as follows:

"Sec. 22. Remittance of premiums. (a) The contributions imposed in the preceding sections shall be remitted to the System within the first seven days of each calendar month following the month for which they are applicable or within such time as the Commission may prescribe. Every employer required to deduct and to remit such contributions shall be liable for their payment, and if any contribution is not paid to the System, as herein prescribed he shall pay besides the contribution a penalty thereon of three per centum per month from the date the contribution falls due until paid. If deemed expedient and advisable by the Commission, the collection and remittance of contributions shall be made quarterly or semi-annually in advance, the contributions payable by the employees to be advanced by their respective employers: Provided, That upon separation of an employee, any premium so paid in advance but not due shall be credited or refunded to his employer."

Section 14. Section twenty-five of the same Act is further amended to read as follows:

"Sec. 25. Deposit and disbursement. All moneys paid to or collected by the System every year under this Act and all accruals thereto shall be deposited, administered and disbursed in the same manner and under the same conditions and requirements as provided by law for other public special funds: Provided, That of the total yearly collection of such moneys and their accruals, not more than seven per centum shall be disbursed for the payment of salaries and wages and purchases of office equipment and materials and operational expenses of the System for any year."

Section 15. Paragraph (d) of Section twenty-six of the same Act is re-designated paragraph (f) and two new paragraphs to be known as paragraphs (d) and (e) are inserted in the same section, to read as follows:

Section 16. Paragraph (e) of Section twenty-eight of the same Act is further amended to read as follows, and a new paragraph to be known as paragraph (g) is hereby added:

Section 17. This Act shall take effect upon its approval.

Approved: June 18, 1960