Section 12May 01, 1997, Sec./Art. 12

Retirement Benefits. - (a) A member who has paid at least one hundred twenty (120) monthly contributions prior to the semester of retirement and who: (1) has reached the age of sixty (60) years and is already separated from employment or has ceased to be self-employed; or (2) has reached the age of sixty-five (65) years, shall be entitled for as long as he lives to the monthly pension: Provided, That he shall have the option to receive his first eighteen (18) monthly pensions in lump sum discounted at a preferential rate of interest to be determined by the SSS.

"(b) A covered member who is sixty (60) years old at retirement and who does not qualify for pension benefits under paragraph (a) above, shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf: Provided, That he is separated from employment and is not continuing payment of contributions to the SSS on his own.

"(c) The monthly pension shall be suspended upon the reemployment or resumption of self-employment of a retired member who is less than sixty-five (65) years old. He shall again be subject to Section Eighteen and his employer to Section Nineteen of this Act.

"(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period, excluding the dependents' pension.

"(e) The monthly pension of a member who retires after reaching age sixty (60) shall be the higher of either: (1) the monthly pension computed at the earliest time he could have retired had he been separated from employment or ceased to be self-employed plus all adjustments thereto; or (2) the monthly pension computed at the time when he actually retires.

"SEC. 13. Death Benefits. - Upon the death of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-six (36) times the monthly pension. If he has not paid the required thirty-six (36) monthly contributions, his primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher.

"SEC. 13-A. Permanent Disability Benefits. - (a) Upon the permanent total disability of a member who has paid at least thirty-six (36) monthly contributions prior to the semester of disability, he shall be entitled to the monthly pension: Provided, That if he has not paid the required thirty-six (36) monthly contributions, he shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or twelve (12) times the monthly pension, whichever is higher. A member who (1) has received a lump sum benefit; and (2) is reemployed or has resumed self-employment not earlier than one (1) year from the date of his disability shall again be subject to compulsory coverage and shall be considered a new member.

"(b) The monthly pension and dependents' pension shall be suspended upon the reemployment or resumption of self-employment or the recovery of the disabled member from his permanent total disability or his failure to present himself for examination at least once a year upon notice by the SSS.

"(c) Upon the death of the permanent total disability pensioner, his primary beneficiaries as of the date of disability shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period excluding the dependents' pension.

"(d) The following disabilities shall be deemed permanent total:

"1. Complete loss of sight of both eyes;

"2. Loss of two limbs at or above the ankle or wrists;

"3. Permanent complete paralysis of two limbs;

"4. Brain injury resulting to incurable imbecility or insanity; and

"5. Such cases as determined and approved by the SSS.

"(e) If the disability is permanent partial, and such disability occurs before thirty-six (36) monthly contributions have been paid prior to the semester of disability, the benefit shall be such percentage of the lump sum benefit described in the preceding paragraph with due regard to the degree of disability as the Commission may determine.

"(f) If the disability is permanent total and such disability occurs after thirty-six (36) monthly contributions have been paid prior to the semester of disability, the benefit shall be the monthly pension for permanent total disability payable not longer than the period designated in the following schedule:

Complete and permanent loss of use of

Number of Months

One thumb

10

One index finger

8

One middle finger

6

One right finger

5

One little finger

3

One big toe

6

One hand

39

One arm

50

One foot

31

One leg

46

One ear

10

Both ears

20

Hearing of one ear

10

Hearing of both ears

50

Sight of one eye

25

"(g) The percentage degree of disability which is equivalent to the ratio that the designated number of months of compensability bears to seventy-five (75), rounded to the next higher integer, shall not be additive for distinct, separate and unrelated permanent partial disabilities, but shall be additive for deteriorating and related permanent partial disabilities to a maximum of one hundred percent (100%), in which case, the member shall be deemed as permanently totally disabled.

"(h) In case of permanent partial disability, the monthly pension benefit shall be given in lump sum if it is payable for less than twelve (12) months.

"(i) For the purpose of adjudicating retirement, death and permanent total disability pension benefits, contributions shall be deemed paid for the months during which the member received partial disability pension: Provided, That such contributions shall be based on his last contribution prior to his disability.

"(j) Should a member who is on partial disability pension retire or die, his disability pension shall cease upon his retirement or death.

"SEC. 13-B. Funeral Benefit. - A funeral grant equivalent to Twelve thousand pesos (P12,000.00) shall be paid, in cash or in kind, to help defray the cost of funeral expenses upon the death of a member, including permanently totally disabled member or retiree.

"SEC. 14. Sickness Benefit. - (a) A member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of sickness or injury and is confined therefor for more than three (3) days in a hospital or elsewhere with the approval of the SSS, shall, for each day of compensable confinement or a fraction thereof, be paid by his employer, or the SSS, if such person is unemployed or self-employed, a daily sickness benefit equivalent to ninety percent (90%) of his average daily salary credit, subject to the following conditions:

"(1) In no case shall the daily sickness benefit be paid longer than one hundred twenty (120) days in one (1) calendar year, nor shall any unused portion of the one hundred twenty (120) days of sickness benefit granted under this section be carried forward and added to the total number of compensable days allowable in the subsequent year;

"(2) The daily sickness benefit shall not be paid for more than two hundred forty (240) days on account of the same confinement; and

"(3) The employee member shall notify his employer of the fact of his sickness or injury within five (5) calendar days after the start of his confinement unless such confinement is in a hospital or the employee became sick or was injured while working or within the premises of the employer in which case, notification to the employer is necessary: Provided, That if the member is unemployed or self-employed, he shall directly notify the SSS of his confinement within five (5) calendar days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary: Provided, further, That in cases where notification is necessary, the confinement shall be deemed to have started not earlier than the fifth day immediately preceding the date of notification.

"(b) The compensable confinement shall begin on the first day of sickness, and the payment of such allowances shall be promptly made by the employer every regular payday or on the fifteenth and last day of each month, and similarly in the case of direct payment by the SSS, for as long as such allowances are due and payable: Provided, That such allowance shall begin only after all sick leaves of absence with full pay to the credit of the employee member shall have been exhausted.

"(c) One hundred percent (100%) of the daily benefits Provided in the preceding paragraph shall be reimbursed by the SSS to said employer upon receipt of satisfactory proof of such payment and legality thereof: Provided, That the employer has notified the SSS of the confinement within five (5) calendar days after receipt of the notification from the employee member: Provided, further, That if the notification to the SSS is made by the employer beyond five (5) calendar days after receipt of the notification from the employee member, said employer shall be reimbursed only for each day of confinement starting from the tenth calendar day immediately preceding the date of notification to the SSS: Provided, finally, That the SSS shall reimburse the employer or pay the unemployed member only for confinement within the one-year period immediately preceding the date the claim for benefit or reimbursement is received by the SSS, except confinement in a hospital in which case the claim for benefit or reimbursement must be filed within one (1) year from the last day of confinement.

"(d) Where the employee member has given the required notification but the employer fails to notify the SSS of the confinement or to file the claim for reimbursement within the period prescribed in this section resulting in the reduction of the benefit or denial of the claim, such employer shall have no right to recover the corresponding daily allowance he advanced to the employee member as required in this section.

"(e)The claim of reimbursement shall be adjudicated by the SSS within a period of two (2) months from receipt thereof: Provided, That should no payment be received by the employer within one (1) month after the period prescribed herein for adjudication, the reimbursement shall thereafter earn simple interest of one percent (1%) per month until paid.

"(f) The provisions regarding the notification required of the member and the employer as well as the period within which the claim for benefit or reimbursement may be filed shall apply to all claims filed with the SSS.

"SEC. 14-A. Maternity Leave Benefit. - A female member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days or seventy-eight (78) days in case of caesarian delivery, subject to the following conditions:

"(a) That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide;

"(b) The full payment shall be advanced by the employer within thirty (30) days from the filing of the maternity leave application;

"(c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits Provided by this Act for the same period for which daily maternity benefits have been received;

"(d) That the maternity benefits Provided under this section shall be paid only for the first four (4) deliveries or miscarriages;

"(e) That the SSS shall immediately reimburse the employer of one hundred percent (100%) of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and

"(f) That if an employee member should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified by the employer of the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.

"SEC. 15.

Non-Transferability of Benefits. - The SSS shall promptly pay the benefits Provided in this Act to such persons as may be entitled thereto in accordance with the provisions of this Act: Provided, That the SSS shall pay the retirement benefits on the day of contingency to qualified members who have submitted the necessary documents at least six (6) months before: Provided, further, That the beneficiary who is a national of a foreign country which does not extend benefits to a Filipino beneficiary residing in the Philippines, or which is not recognized by the Philippines, shall not be entitled to receive any benefit under this Act: Provided, further, That notwithstanding the foregoing, where the best interest of the SSS will be served, the Commission may direct payments without regard to nationality or country of residence: Provided, further, That if the recipient is a minor or a person incapable of administering his own affairs, the Commission shall appoint a representative under such terms and conditions as it may deem proper: Provided, further, That such appointment shall not be necessary in case the recipient is under the custody of or living with the parents or spouse of the member in which case the benefits shall be paid to such parents or spouse, as representative payee of the recipient.

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 person for the collection thereof on their behalf shall be recognized, except when they are physically unable to collect personally such benefits: Provided, further, That in case of death benefits, if no beneficiary qualifies under this Act, said benefits shall be paid to the legal heirs in accordance with the law of succession.

"SEC. 16. Exemption from Tax, Legal Process and Lien. -- All laws to the contrary notwithstanding, the SSS and all its assets and properties, all contributions collected and all accruals thereto and income or investment earnings therefrom as well as all supplies, equipment, papers or documents shall be exempt from any tax, assessment, fee, charge, or customs or import duty; and all benefit payments made by the SSS shall likewise be exempt from all kinds of taxes, fees or charges, and shall not liable to attachments, garnishments, levy or seizure by or under any legal or equitable process whatsoever, either before or after receipt by the person or persons entitled thereto, except to pay any debt of the member to the SSS.

No tax measure of whatever nature enacted shall apply to the SSS, unless it expressly revokes the declared policy of the State in Section 2 hereof granting tax-exemption to the SSS. Any tax assessment imposed against the SSS shall be null and void. (As amended by Sec. 9, P.D.

No. 24, S. 1972; and Sec. 14, P. D.

No. 735, S. 1975).

"SEC. 17. Fee of Agents, Attorneys, Etc. - No agent, attorney or other person in charge of the preparation, filing or pursuing any claim for benefit under this Act shall demand or charge for his services any fee, and any stipulation to the contrary shall be null and void. The retention or deduction of any amount from any benefit granted under this Act for the payment of fees for such services is prohibited: Provided, however, That any member of the Philippine Bar who appears as counsel in any case heard by the Commission shall be entitled to attorneys' fees not exceeding ten percent (10%) of the benefits awarded by the Commission, which fees shall not be payable before the actual payment of the benefits, and any stipulation to the contrary shall be null and void.

"Any violation of the provisions of this Section shall be punished by a fine of not less than Five hundred pesos (P500.00) nor more than Five thousand pesos (P5,000.00), or imprisonment for not less than six (6) months nor more than one (1) year, or both, at the discretion of the court.

"SEC. 18. Employee's Contributions. - (a) 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:

SALARY BRACKET

RANGE OF COMPENSATION

MONTHLY SALARY CREDIT

MONTHLY CONTRIBUTION

EMPLOYER

EMPLOYEE

TOTAL

I

1,000.00 - 1,249.99

1000

50.70

33.30

84.00

II

1,250.00 - 1,749.99

1500

76.00

50.00

126.00

III

1,750.00 - 2,249.99

2000

101.30

66.70

168.00

IV

2,250.00 - 2,749.99

2500

126.70

83.30

210.00

V

2,750.00 - 3,249.99

3000

152.00

100.00

252.00

VI

3,250.00 - 3,749.99

3500

177.30

116.70

294.00

VII

3,750.00 - 4,249.99

4000

202.70

133.30

336.00

VIII

4,250.00 - 4,749.99

4500

228.00

150.00

378.00

IX

4,750.00 - 5,249.99

5000

253.30

166.70

420.00

X

5,250.00 - 5,749.99

5500

278.70

183.70

462.40

XI

5,750.00 - 6,249.99

6000

304.00

200.00

504.00

XII

6,250.00 - 6,749.99

6500

329.30

216.78

546.00

XIII

6,750.00 - 7,249.99

7000

354.70

233.30

588.00

XIV

7,250.00 - 7,749.99

7500

380.00

250.00

630.00

XV

7,750.00 - 8.249.99

8000

403.30

266.70

672.00

XVI

8,250.00 - 8,749.99

8500

430.70

283.30

714.00

XVII

8,750.00 - OVER

9000

456.00

300.00

756.00

"The foregoing schedule of contribution shall also apply to self-employed and voluntary members.

"The maximum monthly salary credit shall be Nine thousand pesos (P9,000.00) effective January Nineteen hundred and ninety six (1996); Provided, That it shall be increased by One thousand pesos (P1,000.00) every year thereafter until it shall have reached Twelve thousand pesos (P12,000.00) by Nineteen hundred and ninety nine (1999): Provided, further, That the minimum and maximum monthly salary credits as well as the rate of contributions may be fixed from time to time by the Commission through rules and regulations taking into consideration actuarial calculations and rate of benefits, subject to the approval of the President of the Philippines.

"SEC. 19. Employer's Contributions. - (a) 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 SSS or otherwise recover from them the employer's contributions with respect to such employees.

"(b) The remittance of such contributions by the employer shall be supported by a quarterly collection list to be submitted to the SSS at the end of each calendar quarter indicating the correct ID number of the employer, the correct names and the SSS numbers of the employees and the total contributions paid for their account during the quarter.

"SEC. 19-A. Contributions of the Self-Employed Member. - The contributions to the SSS of the self-employed member shall be determined in accordance with Section Eighteen of this Act: Provided, That the monthly earnings declared by the self-employed member at the time of his registration with the SSS shall be considered as his monthly compensation and he shall pay both the employer and the employee contributions: Provided, further, That the contributions of self-employed persons earning One thousand pesos (P1,000.00) monthly or below may be reduced by the Commission.

"The monthly earnings declared by the self-employed member at the time of his registration shall remain the basis of his monthly salary credit, unless he makes another declaration of his monthly earnings, in which case such latest declaration becomes the new basis of his monthly salary credit.

"SEC. 20. Government Contribution. - As the contribution of the Government to the operation of the SSS, Congress shall annually appropriate out of any funds in the National Treasury not otherwise appropriated, the necessary sum or sums to meet the estimated expenses of the SSS for each ensuing year. In addition to this contribution, Congress shall appropriate from time to time such sum or sums as may be needed to assure the maintenance of an adequate working balance of the funds of the SSS as disclosed by suitable periodic actuarial studies to be made of the operations of the SSS.

"SEC. 21. Government Guarantee. -- The benefits prescribed in this Act shall not be diminished and to guarantee said benefits the Government of the Republic of the Philippines accepts general responsibility for the solvency of the SSS.

"SEC. 22. Remittance of Contributions. -- (a) The contributions imposed in the preceding Section shall be remitted to the SSS within the first ten (10) 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 SSS as herein prescribed, he shall pay besides the contribution a penalty thereon of three percent (3%) 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 contribution so paid in advance but not due shall be credited or refunded to his employer.

"(b) The contributions payable under this Act in cases where an employer refuses or neglects to pay the same shall be collected by the SSS in the same manner as taxes are made collectible under the National Internal Revenue Code, as amended. Failure or refusal of the employer to pay or remit the contributions herein prescribed shall not prejudice the right of the covered employee to the benefits of the coverage.

"The right to institute the necessary action against the employer may be commenced within twenty (20) years from the time the delinquency is known or the assessment is made by the SSS, or from the time the benefit accrues, as the case may be.

"(c) Should any person, natural or juridical, default in any payment of contributions, the Commission may also collect the same in either of the following ways:

"1. By an action in court, which shall hear and dispose of the case in preference to any other civil action; or

"2. By issuing a warrant to the Sheriff of any province or city commanding him to levy upon and sell any real and personal property of the debtor. The Sheriff's sale by virtue of said warrant shall be governed by the same procedure prescribed for executions against property upon judgments by a court of record.

"(d) The last complete record of monthly contributions paid by the employer or the average of the monthly contributions paid during the past three (3) years as of the date of filing of the action for collection shall be presumed to be the monthly contributions payable by and due from the employer to the SSS for each of the unpaid month, unless contradicted and overcome by other evidence: Provided, That the SSS shall not be barred from determining and collecting the true and correct contributions due the SSS even after full payment pursuant to this paragraph, nor shall the employer be relieved of his liability under Section Twenty-eight of this Act.

"SEC. 22-A. Remittance of Contributions of Self-Employed Member. - Self-employed members shall remit their monthly contributions quarterly on such dates and schedules as the Commission may specify through rules and regulations: Provided, That no retroactive payment of contributions shall be allowed, except as Provided in this Section.

"SEC. 23. Method of Collection and Payment. - The SSS shall require a complete and proper collection and payment of contributions and proper identification of the employer and the employee. Payment may be made in cash, checks, stamps, coupons, tickets, or other reasonable devices that the Commission may adopt.

"SEC. 24.

Employment Records and Reports. - (a) Each employer shall immediately report to the SSS the names, ages, civil status, occupations, salaries and dependents of all his employees who are subject to compulsory coverage: Provided, That if an employee subject to compulsory coverage should die or become sick or disabled or reach the age of sixty (60) without the SSS having previously received any report or written communication about him from his employer, the said employer shall pay to the SSS damages equivalent to the benefits to which said employee member would have been entitled had his name been reported on time by the employer to the SSS, except that in case of pension benefits, the employer shall be liable to pay the SSS damages equivalent to the accumulated pension due as of the date of settlement of the claim or to the five (5) years' pension, including dependents' pension: Provided, further, That if the contingency occurs within thirty (30) days from the date of employment, the employer shall be relieved of his liability for damages: Provided, further, That any person or entity engaging the services of an independent contractor shall be subsidiarily liable with such contractor for any civil liability incurred by the latter under this Act: Provided, finally, That the same person or entity engaging the services of an independent contractor shall require such contractor to post a surety bond to guarantee the payment of the worker's benefits.

"(b) Should the employer misrepresent the true date of employment of the employee member or remit to the SSS contributions which are less than those required in this Act or fail to remit any contribution due prior to the date of contingency, resulting in a reduction of benefits, the employer shall pay to the SSS damages equivalent to the difference between the amount of benefit to which the employee member or his beneficiary is entitled had the proper contributions been remitted to the SSS and the amount payable on the basis of contributions actually remitted: Provided, That if the employee member or his beneficiary is entitled to pension benefits, damages shall be equivalent to the accumulated pension due as of the date of settlement of the claim or to the five (5) years' pension, whichever is higher, including dependents' pension.

"In addition to the liability mentioned in the preceding paragraphs (a) and (b) hereof, the employer shall also be liable for the corresponding unremitted contributions and penalties thereon.

"(c) The records and reports duly accomplished and submitted to the SSS by the employer or the member, as the case may be, shall be kept confidential by the SSS except in compliance with a subpoena duces tecum issued by the Court, shall not be divulged without the consent of the SSS President or any official of the SSS duly authorized by him, shall be presumed correct as to the data and other matters stated therein, unless the necessary corrections to such records and reports have been properly made by the parties concerned before the right to the benefit being claimed accrues, and shall be made the basis for the adjudication of the claim.

If as a result of such adjudication the SSS in good faith pays a monthly pension to a beneficiary who is inferior in right to another beneficiary or with whom another beneficiary is entitled to share, such payments shall discharge the SSS from liability unless and until such other beneficiary notifies the SSS of his claim prior to the payments.

"(d) Every employer shall keep true and accurate work records for such period and containing such information as the Commission may prescribe, in addition to an "Annual Register of New and Separated Employees" which shall be secured from the SSS wherein the employer shall enter on the first day of employment or on the effective date of separation, the names of the persons employed or separated from employment, their SSS numbers, and such other data that the Commission may require and said annual register shall be submitted to the SSS in the month of January of each year. Such records shall be open for inspection by the SSS or its authorized representatives quarterly or as often as the SSS may require.

"The SSS may also require each employer to submit, with respect to the persons in his employ, reports needed for the effective administration of this Act.

"(e) Each employer shall require, as a condition to employment, the presentation of a registration number secured by the prospective employee from the SSS in accordance with such procedure as the SSS may adopt: Provided, That in case of employees who have been assigned registration numbers by virtue of a previous employment, such numbers originally assigned to them should be used for purposes of this Section: Provided, further, That the issuance of such registration numbers by the SSS shall not exempt the employer from complying with the provisions of paragraph (a) of this Section.

"(f) Notwithstanding any law to the contrary, microfilm, or non-erasable optical disk and other similar archival media copies of original SSS records and reports, duly certified by the official custodian thereof, shall have the same evidentiary value as the originals and be admissible as evidence in all legal proceedings.

"(g) Notwithstanding any law to the contrary, local government units shall, prior to issuing any annual business license or permit, require submission of certificate of SSS coverage and compliance with the provisions of this Act: Provided, That the certification or clearance shall be issued by the SSS within five (5) working days from receipt of the request.

"SEC. 24-A. Report and Registration of the Self-Employed Member. - Each covered self-employed person shall, within thirty (30) days from the first day he started the practice of his profession or business operations register and report to the SSS his name, age, civil status, and occupation, average monthly net income and his dependents.

"SEC. 25. Deposits and Disbursements. - All money paid to or collected by the SSS 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 not more than twelve percent (12%) of the total yearly contributions plus three percent (3%) of other revenues shall be disbursed for operational expenses such as salaries and wages, supplies and materials, depreciation and the maintenance of offices of the SSS: Provided, further, That if the expenses in any year are less than the maximum amount permissible, the difference shall not be availed of as additional expenses in the following years.

"SEC. 26. Investment of Reserve Funds. - All revenues of the SSS that are not needed to meet the current administrative and operational expenses incidental to the carrying out of this Act shall be accumulated in a fund to be known as the "Reserve Fund." Such portions of the Reserve Fund as are not needed to meet the current benefit obligations thereof shall be known as the "Investment Reserve Fund" which the Commission shall manage and invest with the skill, care, prudence and diligence necessary under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters would exercise in the conduct of an enterprise of a like character and with similar aims.

Pursuant thereto, and in line with the basic principles of safety, good yield and liquidity, the Commission shall invest the funds to earn an annual income not less than the average rates of treasury bills or any other acceptable market yield indicator in any or in all of the following:

"(a) In bonds, securities, promissory notes or other evidence of indebtedness of the Government of the Philippines, or in bonds, securities, promissory notes or other evidence of indebtedness to which the full faith, credit and unconditional guarantee of the Government of the Philippines is pledged;

"(b) In bonds, securities, promissory notes or other evidence of indebtedness of the Government of the Philippines, or any agencies or instrumentalities to finance domestic infrastructure projects such as roads, bridges, ports, telecommunications, and other similar projects: Provided, That the instruments issued by an agency or instrumentality of the government shall be guaranteed by the Government of the Philippines or any government financial institution or acceptable multilateral agency: Provided, further, That the SSS shall have priority over the revenues of the projects: Provided, finally, That such investments shall not exceed thirty percent (30%) of the Investment Reserve Fund;

"(c) In bonds, securities, promissory notes or other evidence of indebtedness of government financial institutions or government corporations with acceptable credit or guarantee: Provided, That such investments shall not exceed thirty percent (30%) of the Investment Reserve Fund;

"(d) In bonds, securities, promissory notes or other evidence of indebtedness of any bank doing business in the Philippines and in good standing with the Bangko Sentral ng Pilipinas to finance loans to private corporations doing business in the Philippines, including schools, hospitals, small-and-medium scale industries, cooperatives and non-governmental organizations, in which case the collaterals or securities shall be assigned to the SSS under such terms and conditions as the Commission may prescribe: Provided, That in the case of bank deposits, they shall not exceed at any time the unimpaired capital and surplus or total private deposits of the depository bank, whichever is smaller: Provided, further, That said bank shall first have been designated as a depository for this purpose by the Monetary Board of the Bangko Sentral ng Pilipinas: Provided, finally, That such investments shall not exceed forty percent (40%) of the Investment Reserve Fund;

"(e) In bonds, securities, promissory notes or other evidence of indebtedness of shelter agencies of the National Government or financial intermediaries to finance housing loans of members; and in long-term direct individual or group housing loans giving priority to the low-income groups, up to a maximum of ninety percent (90%) of the appraised value of the properties to be mortgaged by the borrowers; and

"In short and medium term loans to members such as salary, educational, livelihood, marital, calamity and emergency loans: Provided, That not more than thirty five percent (35%) of the Investment Reserve Fund at any time shall be invested for housing purposes: Provided, further, That not more than ten percent (10%) of the Investment Reserve Fund shall be invested in short and medium term loans;

"(f) In bonds, securities, promissory notes or other evidence of indebtedness of educational or medical institutions to finance the construction, improvement and maintenance of schools and hospitals and their equipment and facilities: Provided, That such investments shall not exceed ten percent (10%) of the Investment Reserve Fund;

"(g) In real estate property, including shares of stocks involving real estate property, and investment secured by first mortgages on real estate or other collaterals acceptable to the SSS: Provided, That such projects and investments shall, in the determination of the Commission, redound to the benefit of the SSS, its members, as well as the general public: Provided, further, That investment in real estate property, including shares of stocks involving real estate property shall not exceed five percent (5%) of the Investment Reserve Fund: Provided, finally, That investments in other income earning projects and investments secured by first mortgages or other collaterals shall not exceed twenty five percent (25%) of the Investment Reserve Fund;

"(h) In bonds, debentures, securities, promissory notes or other evidence of indebtedness of any prime corporation or multilateral institutions to finance domestic projects: Provided, That the issuing or assuming entity or its predecessors shall not have defaulted in the payment of interest on any of its securities and that during each of any three (3) including the last two (2) of the five (5) fiscal years next preceding the date of acquisition by the SSS of such bonds, debentures or other evidence of indebtedness, the net earnings of the issuing or assuming institution available for its fixed charges, as defined in this Act, shall have been not less than one and one-quarter times the total of its fixed charges for such year: Provided, further, That such investments shall not exceed thirty percent (30%) of the Investment Reserve Fund;

"(i) In preferred or common shares of stocks listed or about to be listed in the stock exchange or options or warrants to such stocks or, subject to prior approval of the Bangko Sentral ng Pilipinas, such other risk management instruments of any prime or solvent corporation or financial institution created or existing under the laws of the Philippines with proven track record of profitability over the last three (3) years and payment of dividends at least once over the same period: Provided, That such investments shall not exceed thirty percent (30%) of the Investment Reserve Fund;

"(j) In domestic or foreign mutual funds in existence for at least three (3) years; Provided, That such investments shall not exceed twenty percent (20%) of the Investment Reserve Fund: Provided, further, That investments in foreign mutual funds shall not exceed one percent (1%) of the Investment Reserve Fund in the first year which shall be increased by one percent (1%) for each succeeding year, but in no case shall it exceed seven and one-half percent (7.5%) of the Investment Reserve Fund;

"(k) In foreign currency deposits or triple "A" foreign currency denominated debts, prime and non-speculative equities, and other Bangko Sentral ng Pilipinas approved financial instruments or other assets issued in accordance with the existing laws of the countries where such financial instruments are issued: Provided, That these instruments or assets are listed in bourses of the respective countries where these instruments or assets are issued: Provided, further, That the issuing company has proven track of record of profitability over the last three (3) years and a record of regular dividend pay-out over the same period: Provided, finally, That such investments shall not exceed one percent (1%) of the Investment Reserve Fund in the first year which shall be increased by one percent (1%) for each succeeding year, but in no case shall it exceed seven and one-half percent (7.5%) of the Investment Reserve Fund;

"(l) In loans secured by such collaterals like cash, government securities or guarantees of multilateral institutions: Provided, That such investments shall not exceed thirty percent (30%) of the Investment Reserve Fund; and

"(m) In other Bangko Sentral ng Pilipinas approved investment instruments with the same intrinsic quality as those enumerated in paragraphs (a) to (l) hereof, subject to the policies and guidelines which the Commission may formulate.

"No portion of the Investment Reserve Fund or income thereof shall accrue to the general fund of the National Government or to any of its agencies or instrumentalities, including government-owned or controlled corporations, except as may be allowed under this Act: Provided, That no portion of the Investment Reserve Fund shall be invested for any purpose or in any instrument, institution or industry over and above the prescribed cumulative ceilings as follows:

40% in private securities

35% in housing

30% in real estate related investments

10% in short and medium-term member loans

30% in government financial institutions and corporations

30% in infrastructure projects

15% in any particular industry

7.5% in foreign-currency denominated investments

"SEC. 26-A. Fund Managers. - As part of its investment operations, the SSS may appoint local or, in the absence thereof, foreign fund managers to manage the Investment Reserve Fund, as it may deem appropriate.

"SEC. 26-B. Mortgagor Insurance Account. - (a) As part of its investment operations, the SSS shall act as insurer of all or part of its interest on SSS properties mortgaged to the SSS, or lives of mortgagors whose properties are mortgaged to the SSS. For this purpose, the SSS shall establish a separate account to be known as the "Mortgagors' Insurance Account."

All amounts received by the SSS in connection with the aforesaid insurance operations shall be placed in the Mortgagors' Insurance Account. The assets and liabilities of the Mortgagors' Insurance Account shall at all times be clearly identifiable and distinguishable from the assets and liabilities in all other accounts of the SSS. Notwithstanding any provision of law to the contrary, the assets held in the Mortgagors' Insurance Account shall not be chargeable with the liabilities arising out of any other business the SSS may conduct but shall be held and applied exclusively for the benefit of the owners or beneficiaries of the insurance contracts issued by the SSS under this paragraph.

"(b) The SSS may insure any of its interest or part thereof with any private company or reinsurer.

The Insurance Commission or its authorized representatives shall make an examination into the financial condition and methods of transacting business of the SSS at least once in two (2) years, but such examination shall be limited to the insurance operation of the SSS as authorized under this paragraph and shall not embrace the other operations of the SSS; and the report of said examination shall be submitted to the Commission and a copy thereof shall be furnished the Office of the President of the Philippines within a reasonable time after the close of the examination: Provided, That for each examination, the SSS shall pay to the Insurance Commission an amount equal to the actual expense of the Insurance Commission in the conduct of examination, including the salaries of the examiners and of the actuary of the Insurance Commission who have been assigned to make such examination for the actual time spent in said examination: Provided, further, That the general law on insurance and the rules and regulations promulgated thereunder shall have suppletory application insofar as it is not in conflict with this Act and its rules and regulations.

"SEC. 27. Records and Reports. - The SSS President shall keep and cause to keep records of operations of the funds of the SSS and of disbursements thereof and all accounts of payments made out of said funds. During the month of January of each year, the SSS President shall prepare for submission to the President of the Philippines and to Congress of the Philippines a report of operations of the SSS during the preceding year, including statistical data on the number of persons covered and benefited, their occupations and employment status, the duration and amount of benefits paid, the finances of the SSS at the close of the said year, and recommendations.

He shall also cause to be published in two (2) newspapers of general circulation in the Philippines a synopsis of the annual report, showing in particular the status of the finances of the SSS and the benefits administered.

"SEC. 28. Penal Clause. - (a) Whoever, for the purpose of causing any payment to be made under this Act, or under an agreement thereunder, where none is authorized to be paid, shall make or cause to be made false statement or representation as to any compensation paid or received or whoever makes or causes to be made any false statement of a material fact in any claim for any benefit payable under this Act, or application for loan with the SSS, or whoever makes or causes to be made any false statement, representation, affidavit or document in connection with such claim or loan, shall suffer the penalties Provided for in Article One hundred seventy-two of the Revised Penal Code.

"(b) Whoever shall obtain or receive any money or check under this Act or any agreement thereunder, without being entitled thereto with intent to defraud any member, employer or the SSS, shall be fined not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) and imprisoned for not less than six (6) years and one (1) day nor more than twelve (12) years.

"(c) Whoever buys, sells, offers for sale, uses, transfers or takes or gives in exchange, or pledges or gives in pledge, except as authorized in this Act or in regulations made pursuant thereto, any stamp, coupon, ticket, book or other device, prescribed pursuant to Section Twenty-three hereof by the Commission for the collection or payment of contributions required herein, shall be fined not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or imprisoned for not less than six (6) years and one (1) day nor more than twelve (12) years, or both, at the discretion of the court.

"(d) Whoever, with intent to defraud, alters, forges, makes or counterfeits any stamp, coupon, ticket, book or other device prescribed by the Commission for the collection or payment of any contribution required herein, or uses, sells, lends, or has in his possession any such altered, forged or counterfeited materials, or makes, uses, sells or has in his possession any such altered, forged, material in imitation of the material used in the manufacture of such stamp, coupon, ticket, book or other device, shall be fined not less than Five thousand pesos (P5,000.00) non more than Twenty thousand pesos (P20,000.00) or imprisoned for not less than six years (6) and one (1) day nor more than twelve (12) years, or both, at the discretion of the court.

"(e) Whoever fails or refuses to comply with the provisions of this Act or with the rules and regulations promulgated by the Commission, shall be punished by a fine of not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00), or imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years, or both, at the discretion of the court: Provided, That where the violation consists in failure or refusal to register employees or himself, in case of the covered self-employed or to deduct contributions from the employees' compensation and remit the same to the SSS, the penalty shall be a fine of not less Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos (P20,000.00) and imprisonment for not less than six (6) years and one (1) day nor more than twelve (12) years.

"(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable for the penalties Provided in this Act for the offense.

"(g) Any employee of the SSS who receives or keeps funds or property belonging, payable or deliverable to the SSS and who shall appropriate the same, or shall take or misappropriate, or shall consent, or through abandonment or negligence, shall permit any other person to take such property or funds, wholly or partially, or shall otherwise be guilty of misappropriation of such funds or property, shall suffer the penalties Provided in Article Two hundred seventeen of the Revised Penal Code.

"(h) Any employer who, after deducting the monthly contributions or loan amortizations from his employee's compensation, fails to remit the said deduction to the SSS within thirty (30) days from the date they became due, shall be presumed to have misappropriated such contributions or loan amortizations and shall suffer the penalties Provided in Article Three hundred fifteen of the Revised Penal Code.

"(i) Criminal action arising from a violation of the provisions of this Act may be commenced by the SSS or the employee concerned either under this Act or in appropriate cases under the Revised Penal Code: Provided, That such criminal action may be filed by the SSS in the city or municipality where the SSS office is located, if the violation was committed within its territorial jurisdiction or in Metro Manila, at the option of the SSS.

"SEC. 29. Government Aid. - The establishment of the SSS shall not disqualify the members and employers from receiving such government assistance, financial or otherwise, as may be Provided.

"SEC. 30.

Transitory Clause. - Any employer who is delinquent or has not remitted all contributions due and payable to the SSS may, within six (6) months from the effectivity of this Act, remit said contributions or submit a proposal to pay the same in installment within a period of not more than twelve (12) months from the effectivity of this Act without incurring the prescribed penalty, subject to the implementing rules and regulations which the Commission may prescribe: Provided, That the employer submits the corresponding collection lists together with the remittance or proposal to pay in installments: Provided, further, That in case the employer fails to remit contributions within the six-month grace period or defaults in the payment of any amortization Provided the approved proposal, the prescribed penalty shall be imposed from the time the contributions first became due as Provided in Section 22 (a) hereof."