SSS expands repayment period for overdue contributions by employers

MANILA, Philippines – The Social Security System (SSS), the state-run pension fund for private employees, has expanded the repayment period for overdue contributions to encourage employers to settle their obligations under an amnesty period which will run until July 31.

SSS president and chief executive Romulo Neri said the SSS is extending a payment term dubbed as the “3-4-5 Formula” which is more liberal than previous amnesty programs.

Under the scheme, SSS offers three percent annual interest for installment payments of up to four years and with only a five percent downpayment of their outstanding obligations.

Employers can remit their unpaid contributions to the SSS in full or by installment along with the list of covered employees under the amnesty program. Neri said while the six-month amnesty period will end on July 31, the installment payments can run for 48 months.

This is a marked improvement from the agency’s amnesty program in 1997 when it offered a maximum of only twelve monthly installments. Furthermore, Neri said employers had no option to pay by installment under the first condonation program in 1986.

Neri said the pension fund also expanded the amnesty’s coverage to include employers with pending or approved applications to settle unpaid contributions through the regular installment payment scheme. SSS also allowed dacion en pago or payment in kind such as real estate properties.

With more liberal terms in this year’s amnesty program, SSS expects to collect P3.9 billion in five years.

The agency estimates that total contribution collections are expected to reach P3.69 billion while interest payments, pegged at three percent per annum, will amount to P208 million in five years.

“Initial figures show that we have already collected P48.71 million from 549 employers nationwide, adding that condoned penalties so far amount to P208 million in five years,” Neri said.

Delinquent employers have been a major problem of the agency.

Last year, SSS filed cases against a total of 1,133 employers for failing to remit contributions of workers estimated at P478.22 million, including penalties amounting to P167.04 million.

Neri said the agency would withdraw the cases against employers who would avail of the amnesty. At the same time, he said SSS would re-file the charges if they fail to remit their delinquent contributions in full or if they default on their installment payments under the amnesty program.

Delinquent employers face imprisonment of six to 12 years and a maximum fine of P20,000 as provided under the Social Security Act of 1997.

Over 600 of the cases filed in 2009 were against employers in the National Capital Region. The agency also sued at least 188 employers who refused to present company records. –Iris C. Gonzales (The Philippine Star)