Further Amending Certain Sections Of Republic Act No. 1161, As Amended, Otherwise Known As The "Social Security Law"
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Further Amending Certain Sections Of Republic Act No. 1161, As Amended, Otherwise Known As The "Social Security Law"
Executive Order No. 102
January 1, 1987
Case Overview and Summary
Summary of Executive Order No. 102Amendments to the Social Security Law (Republic Act No. 1161)
- Composition of the Social Security Commission (Sec. 1)
• The Commission shall be composed of the Minister of Labor and Employment, the SSS Administrator, and six appointive members (two representing labor, two representing management, and two representing the general public).
• The President shall appoint the members and designate the Chairman from among them.
• The appointive members shall serve for three years and receive a per diem of ₱700 per meeting attended, up to eight meetings per month.
- Actuarial Valuation and Benefit Increases (Sec. 2)
• The actuary shall submit a valuation report on the SSS benefit program every five years or more frequently if necessary. (Sec. 4(c))
• Actuarial studies and calculations shall be undertaken for increases in benefits and the financial stability of the SSS, subject to the approval of the President. (Sec. 4(c))
• Benefit increases shall not require any increase in the contribution rate, and the actuarial soundness of the reserve fund shall be guaranteed. (Sec. 4(c))
- Definitions (Sec. 3)
• "Compensation" is defined as all actual remuneration for employment, including the mandated cost of living allowance, up to a maximum of ₱3,000 per month. (Sec. 8(f))
• "Average daily salary credit" is defined as the sum of the six highest monthly salary credits in the 12 months preceding the contingency, divided by 180. (Sec. 8(n))
- Retirement and Disability Benefits (Secs. 4-6)
• The minimum monthly pension shall be ₱200, and the aggregate pension shall not be less than 60 times the monthly pension, except for secondary beneficiaries. (Sec. 12(b))
• Pensioners as of December 31, 1986, shall receive a 20% increase in their monthly pension. (Sec. 12(b))
• Upon the death of a retired or permanently totally disabled pensioner, their primary beneficiaries shall receive 80% of the monthly pension, and dependents shall receive the dependents' pension. (Secs. 12-B(d), 13-A(c))
• If the pensioner has no primary beneficiaries and dies within 60 months of receiving the pension, the secondary beneficiaries shall receive a lump sum benefit equal to the greater of (1) 20 times the monthly pension or (2) the difference between 60 times the monthly pension and the total pensions paid, excluding dependents' pensions. (Secs. 12-B(d), 13-A(c))
- Funeral Benefits (Sec. 7)
• A funeral grant of ₱2,000 shall be paid upon the death of a covered member, permanently totally disabled employee, or retiree to help defray funeral expenses. (Sec. 13-B)
- Sickness Benefits (Sec. 8)
• The daily sickness allowance shall not be less than ₱7.50 nor exceed ₱75, and shall not be paid for more than 120 days in one calendar year. (Sec. 14(a)(1))
• Unused portions of the 120 days of sickness benefit shall not be carried forward to the subsequent year. (Sec. 14(a)(1))
- Contributions (Sec. 9)
• The employee's contribution shall be deducted from their monthly salary, wage, compensation, or earnings according to a specified schedule effective January 1, 1987. (Sec. 18(a))
• The schedule provides contribution rates for 13 salary bracket numbers, ranging from ₱10.50 for a monthly salary credit of ₱125 to ₱252 for a monthly salary credit of ₱3,000 and above. (Sec. 18(a))
• The maximum covered earnings or compensation for all SSS members shall be limited to ₱3,000 per month, unless otherwise provided by the Social Security Commission. (Sec. 18(a))
- Operational Expenses (Sec. 10)
• Not more than 12% of the total yearly contributions plus 3% of other revenues shall be disbursed for salaries, wages, office equipment and materials, operational expenses, and maintenance of regional offices. (Sec. 25)
• If expenses in any year are less than the maximum permissible amount, the difference shall not be availed of as additional expenses in the following years. (Sec. 25)
- Investment of Reserve Funds (Sec. 11)
• The Reserve Fund shall be invested to earn an average annual income of at least 9% and shall be known as the "Investment Reserve Fund". (Sec. 26)
• Investments may include direct housing loans to covered employees and group housing projects (up to 30% of the Investment Reserve Fund), short and medium-term loans to covered employees (up to 10% of the Investment Reserve Fund), bonds and debentures of solvent corporations (up to 10% of the Investment Reserve Fund), preferred stocks of solvent corporations (up to 10% of the Investment Reserve Fund), and common stocks of solvent and profitable corporations listed on the stock exchange (up to 10% of the Investment Reserve Fund). (Sec. 26)
- Repealing Clause and Effectivity (Secs. 13-14)
• All laws, orders, issuances, rules, and regulations inconsistent with this Executive Order are repealed or modified accordingly. (Sec. 13)
• This Executive Order shall take effect on January 1, 1987. (Sec. 14)
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Further Amending Certain Sections Of Republic Act No. 1161, As Amended, Otherwise Known As The "Social Security Law"
Executive Order No. 102
•January 1, 1987
EXECUTIVE ORDER NO. 102 January 1, 1987
FURTHER AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NO. 1161, AS AMENDED, OTHERWISE KNOWN AS THE "SOCIAL SECURITY LAW"
WHEREAS, the Social Security System was created pursuant to the policy under Republic Act No. 1161, as amended, in order to "(p)rovide to covered employees and their families protection against the hazards of disability, sickness, old age, and death, with a view of promoting their well-being in the spirit of social justice;"
WHEREAS, present economic conditions make it necessary that certain sections or provisions of the Social Security Law be further amended to upgrade the base of contributions and to adjust the benefit structure provided for thereunder so that the amounts of the benefits would be more meaningful and responsive to the needs of its members and their families;
WHEREAS, it is also necessary to effect changes in the Social Security System and its operations considering that it performs an important role in the social and economic development programs of the government;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of...
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