Interest and Penalty Answer on SSS Salary Loan Question

There have been many questions on interest and penalty on SSS Loans
Instead of answering these questions individually, i have decided to post this little tidbit for their information.

If there are specific questions on this answer, please comment -

Answer taken from the SSS Website


INTEREST AND PENALTY

The loan shall be charged an interest rate of 10% per annum based on diminishing principal balance, and shall be amortized over a period of 24 months.

Interest of 10% shall continue to be charged on the outstanding principal balance until fully paid

Any excess in the amortization payment shall be applied to the outstanding principal balance.

Loan amortization not remitted on due date shall bear a penalty of 1% per month until the loan is fully paid.

***********************************************************************

you can also find this at the back page of the salary loan application form

register as an online member so you can request for a SOA

interest and penalties change on a daily basis, on a straight-line method

If you wish to read more on salary loan, read more on the SSS website
if you have problems reaching the sss website, drop a comment so i can inform the sss

click here to access loans on the sss website

SSS Peso-Fund has started

Just wanted give a heads-up to members

The Peso-fund has started yesterday for some branches.  ASK TODAY.
Same rules.

HERE IS A COPY OF THE NEWS RELEASE;  with slight editing for readability purposes only

SSS voluntary provident fund opens enrollment

6 May 2015

SSS is now accepting enrollment applications for the Personal Equity and Savings Option (SSS-PESO) Fund program, a provident-fund scheme that aims to increase savings among SSS members, particularly for building their retirement fund.

The program is open to all members who are 54 years old and below, and have at least six consecutive contributions under the SSS regular program within the last 12 months prior to enrollment. The member’s effective date of membership commences at the month a contribution is first made to the SSS-PESO fund. “They can participate for an initial contribution of P1,000 with succeeding contributions of at least P1,000, in multiples of P100. An SSS-PESO member can contribute up to a maximum P100,000 per year,” SSS Vice President for Benefits Administration Division Agnes San Jose said. For the pilot implementation of the SSS-PESO Fund, interested members may apply at the following branches in the National Capital Region: Diliman, Cubao, San Francisco Del Monte, Pasig-Shaw, Mandaluyong, Taguig, Makati-Gil Puyat, Alabang, Legarda, Pasay-Roxas Boulevard. Members are required to personally appear before an SSS authorized representative to sign the accomplished forms for confirmation. “This procedure allows us to verify the authenticity of the document and the identity of the applicant,” San Jose explained. By September 2015, all SSS branches nationwide will accept applications to the SSS-PESO Fund. Eventually, enrollment may be done online through the My.SSS portal. The program’s guidelines which came out recently, stated that employed members, regardless of the amount of their current monthly contributions, could join the SSS-PESO Fund while self-employed, voluntary and OFW members should be paying the maximum SSS contribution to be able to contribute in the SSS-PESO Fund. The guidelines further explained that there has to be a corresponding SSS contribution on the month the member will make contributions to the SSS-PESO Fund account. Refunds, withdrawals or benefit claims will be credited to the member’s single savings or current account with an SSS depository bank. Early termination of membership is not allowed. In a previous statement, the SSS said members can enjoy higher return on their savings under the tax-free fund, which offers guaranteed earnings that are based on rates higher than those offered in a savings account or bank deposit. According to San Jose, SSS-PESO Fund contributions are invested in government securities to ensure safety and liquidity and are guaranteed to earn based on prevailing Treasury bill rates. SSS-PESO Fund savings are allocated to three accounts namely, retirement, medical, and general purpose, which covers education, housing, livelihood, and unemployment. Only the portions allotted for medical and general purpose can be withdrawn before the member’s date of retirement. A corresponding management fee will be charged for each SSS-PESO account while penalties will be charged for any withdrawals made before the fifth year of membership in the SSS-PESO Fund. SSS-PESO Fund members may also receive additional earnings depending on the actual income of the fund at the end of each year.

Provident Funds ....like the SSS Peso-Fund, Pag-ibig2 Fund

remember when SSS announced the SSS Provident Fund - that is - The SSS Peso Fund -
 wherein interest followed the 90-day T bill?
well, that fund is still not in play.  Yep, it has been postponed.  The fund is similar to the Flexi-fund offered to OFWs.  But there are many restrictions.

If you check the Pag-ibig website, there is a Pag-ibig 2 offer wherein contributions are voluntary, have a better interest rate than bank deposits, but the interest rates are not comparable to the SSS Provident Fund.

however, the Pag-ibig offer has less restrictions so if you want to invest now, and with less hassles, go with the Pag-ibig 2 fund.
also, did you know that you can also increase your pag-ibig 1 contributions.
i know, HR never said anything, right?

do you wonder if HR really cares about you?

well .....

Have you stopped paying your SSS contributions? You can continue - no sweat - PART 2

This is part 2 of the earlier post with the same title.

Yes, you can continue to pay your contributions after you stop, even if the stop is a long time (like 10++ years).  However, if you were self-employed, you might need to be interviewed again, depending on circumstances.

Otherwise, all you need to do is pay as voluntary since you already have previous contributions.

Remember to use the new payment form for SSS Contribution payments.

this is how it looks ...

a reduced copy of the form

click to see the copy in the sss website

P.E.S.O. FUND START POSTPONED

This is just to relay the news that the SSS PESO Fund start will be next year, not DEC 1 as initially announced.

more to shop with???

SALIENT POINTS OF THE SSS P.E.S.O. FUND

Items in blue are MY personal remarks and comments.

MEMBERSHIP

• All employees, self-employed (SE), voluntary members (VM), and OFWs who have not reached 55 years old and have not filed any final claim under the regular SSS program may enroll in the SSS PESO Fund. 
• For SE, VM and OFW members, they must be paying at the Maximum Salary Credit (MSC) for at least six consecutive months during the last 12 months immediately prior to the month of enrollment. 
• Membership in the SSS PESO Fund begins from the first contribution.
• Interested and qualified SSS members can enroll in the program through over-the-counter in any SSS branch. Online enrollment to the SSS PESO Fund will be announced soon.

CONTRIBUTIONS

• Each SSS PESO Fund member is allowed a maximum contribution of P100,000.00 per annum and minimum of P1,000.00 per contribution. Any amount below the minimum shall not earn interest and shall be subject to automatic refund. However, maximum and minimum amount of contributions may change upon determination of the Social Security Commission.
• Contributions may be made anytime, provided that for SE, VM and OFW members, such PF contribution has a corresponding SS contribution based on the maximum Monthly Salary Credit (MSC) on the month of contribution. 
• SSS PESO Fund contributions are allocated in three accounts: retirement/total disability (65%), medical (25%), and General Purpose (10%). 

GUARANTEED RATES AND INSURANCE

• SSS PESO Fund offers guaranteed rates for the various accounts. Guaranteed rate for retirement or total disability is based on the Five (5)-year T-bond, while medical and general purpose is based on the 364-day T-bill rates. 
• The monthly crediting of the guaranteed rate is based on the average of the past three (3) months. Crediting of actual earnings in excess of the guaranteed rate shall be made at the end of the year.

BENEFITS

• SSS PESO is a tax-free fund. 
• Members have the option to receive retirement or total disability benefit either through monthly pension, lump sum, or a combination of monthly pension and lump sum. 
• Effectivity of retirement/total disability is the same as the effectivity of retirement/total disability under the regular SSS Program. 
• Death benefit for beneficiaries of SSS PESO Fund members will be paid in lump sum. 
• In case the SSS PESO Fund member dies prior to the expiration of the pension period, his beneficiaries will be paid the remaining balance of his fund in lump sum.

FINANCIAL REPORT

• SSS PESO Fund members will receive a Statement of Account every month through electronic mail and may be viewed in their web account via My. SSS.

OPTION TO WITHDRAW                                            

• No withdrawals from the retirement account of the SSS PESO Fund are allowed. 
• Withdrawals on SSS PESO Fund are only allowed from the Medical (25%) and General Purpose (10%) accounts but corresponding penalty and service fees will be charged if the contributions are retained for less than 5 years. Penalty and service fees depend on the number of years the contributions are retained in the SSS PESO Fund as shown on the table below: 

FAQS

Can my SSS PESO Fund contribution vary every year? Yes. For example, you can place P100,000 in 2015 and P20,000 in 2016. This is a savings mechanism so it is up to you to save more so you can add on your SSS PESO fund.

Is there a difference between depositing my money in a savings account and putting it in the SSS PESO Fund? Yes.

A savings account earns minimal interest, usually about 1-4% annually. That much is pretty small potatoes for investment.  Also under PDIC, monies in a savings account are protected until half-a-million.  The Peso Fund carries a Sovereign Guaranty for the entire, by virtue of the SSS Law.

I am employed but I am not paying at the Maximum Salary Credit (MSC). Can I contribute P100,000 in my SSS PESO fund? Yes. The SSS PESO fund is a savings mechanism for those who have other sources of income so they can plan better for retirement.

UPDATE:  2015.07.07 

As a young person, you can start small, and make it bigger as you earn more.

If you are a voluntary member, then you are NOT allowed unless you are paying the maximum. or have paid the maximum 6 months prior to your enrollment.  Sorry, this is the biased portion i was referring to ---

Are my contributions in the SSS PESO fund taxed?

No. Both contributions and income from your SSS PESO Fund are tax free because your contributions had already been taxed from your salary.  Remember, we have the gross taxation scheme, a scheme guaranteed to bleed the blood out of its middle-class citizenry.

How are earnings credited?

Guaranteed earnings are credited monthly. Excess earnings, if any, are distributed at the end of the year.

Putting on my SSS member hat, I can see some inequities in this plan.  Can you spot them?  

There seems to be a bias against Voluntary and Self-Employed Members.

I will let you read, and let you know.  

Also, there are no instructions yet - on how to be a member. 

In the meantime, i will try and get the Pag-ibig proposal out here as well so we can evaluate things together.  

RS5 and R5 --- SSS will still accept these forms until further announcement

I had earlier announced the imminent dropping of these 2 forms from the SSS rolls ... of forms
these 2 forms are payment forms and are thus important forms that you use to make contribution payments

well, these forms will still be accepted beyond the previous announcement day.
Before SSS has said that a payment form, called appropriately enought, a PAYMENT FORM will be used in lieu of these 2 forms.

So, payors - dont sweat it, these forms are still acceptable.
and make sure your copy is kept safe.  it is YOUR proof of payment.

*** note: SSS IS NO LONGER ACCEPTING THIS FORM.
PLEASE USE THE CONTRIBUTION PAYMENT FORM

Increase in SSS Contributions

Do you remember PNoy's SONA wherein he indicated his approval of the increase in SSS Contributions?

PNoy said it was going to be 11% instead of 10.4%, and the Monthly Salary Credit would increase to 16,000 instead of 15,000.

methinks it will be implemented soon, perhaps in January 2014 so that Voluntary Members such as OFWs, and Self-Employed Members (SE/VM) would not have to adjust their advanced payments for this year.

Those who paid for more than one year would have to pay adjustments otherwise SSS may reduce the MSC by one step so that there are no underpayments.  Also, those employers who are using Excel spreadsheets for their payroll need not adjust anything for the year.

So, if you were paying at the 15K MSC, which is 1,460.00 - it would now be 1,650 and if you wanted to continue to pay at the maximum level, it would now be 11% times 16,000 or 1,750 pesos.

Watch out for the SSS Announcement!!

Two Saturdays left for the SSS Kasambahay-Householder Registration

This is just to remind those who read my blog for my inputs on various stuff  that there 2 Saturdays left for the registration (and payment if you so desire) for kasambahays and householders.

Tomorrow, June 22 and on Saturday, 29 June.

take advantage of the relatively shorter lines since only kasambahay transactions will be entertained by SSS

SSS Offices Nationwide OPEN 8-5 for June Saturdays - 8, 15, 22, 29

The SSS  has announced that all branches Nationwide will be open to address these Kasambahay transactions, that is:

1. For Kasambahays to get SSS Numbers
Kasambahays must show legal proof of their identity so that SSS Numbers will be permanent.
If No legal proof is presented, a temporary SSS Number will be issued, but cannot be used for claiming and benefits

2. For Household Employers to get the Household Employer SSS Number.
This is different from the personal SSS Number of the Householder.
Householders who have been paying the SSS contributions of their kasambahay using their personal SSS Number will be issued a Household Employer SSS Number.  Only householders who are in the branch may get it immediately.  Otherwise, this will be sent via email or mail.

3.  To pay the SSS contributions of the Kasambahay.

No other transactions will be handled.
So please, DO NOT GO TO THE SSS OFFICES to file any claim or for ACOP purposes during these days.

Please click on the Kasambahay on the left side to see the procedures and the forms, and the body of proof (if i may make a pun after the show) regarding identity.





I WAS ABLE TO GET THE SSS KASAMBAHAY AD:
HERE IT IS:

Everyone makes a mistake

I was going over some computations made in a bill issued by someone in SSS.

As with any computation, i always seek to determine the rationale behind it.

For example, if there is a penalty charge, what is the penalty charge for, and what was the basis for the penalty.  why the bill? ah, well - the computation had to do with contributions made vs. contributions due, 2 things that are NOT the same - and, when the contributions were made, and when they were due.  see, prior to 1998 (that is, prior to  the implementation of RA 8282), SSS charged penalties for contributions made by SEs (self-employed) .

and well, the review had to do with a retirement application.. my doctor (but not my nephro doc) is already 72.

why was i reviewing the computation?  well, okay, so my doctor didnt understand and wanted me to explain.
so to be able to explain, i had to understand.....

based on what i know, and i did check, i think there were some errors.

i just wanted to let everyone know that there is nothing wrong with asking people to explain their computations.  everyone makes a mistake.  the person i asked was not angry, as yes, everyone makes a mistake.

so SSS members, when you are being charged with something you dont understand, ASK.
but do not be angry, okay.

everyone makes a mistake.   even you. even SSS. and sure, even me.
that is why it is imperative that one ASKS.

Kasambahay

looking for a kasambahay?

i was. but thinking of all the paperwork i had to do, i had to rethink having one.
instead, i'm just looking for company.  maybe i'll have that when my friend Y or my friend Tam visits.

too much paperwork. imagine, you'd have to do the paperwork for sss, philhealth, and pag-ibig ... for someone who might stay just a month. and wont or cant even do the job properly. or worst, might rob you blind. and someone who gives less than satisfaction.

too much work having a kasambahay.  not to mention the cost. not just in terms of $, but something more costly - time and effort.

so no. not anymore.  we will see though.

Htt's post on Manila Standard .... deterioration into a Ponzi scheme?

when i was studying actuarial math in the University of the Philippines at Diliman, i learnt that insurance companies are required to have their chief actuary, not the chief accountant, sign the Financial Statement.  the reason for that is very simple, only an actuary can vouch for its reserve as the accountant is NOT qualified to do that.  Even the CFO supposedly cannot, since he does not understand about reserves.  reserves form a large chunk of an insurance company's assets ---- which the company is supposed to invest properly.

same thing for SSS, however - as HTT points, SSS is a pay-as-you-go system and he puts that succinctly when he says that current benefits are paid for by current contributions.

this system of going after the marginalized sector, is great for universal coverage, but rather poor fiscal responsibility ... so, do the needs of some outweigh the responsible others?

Click here for the full article in the manilastandardtoday.com/2013/02/15/straightway-deterioration-into-a-ponzi-scheme

Inquirer News: Still on Kasambahay SSS contribution payments

Paying the Househelper SSS Contributions

Have you read the Inquirer News dated 2 February 2013?

if you are paying your Kasambahay less than 5,000 pesos monthly, you must fully pay the SSS contributions.
hmmmm.  the existing law is 7.07% is shouldered by the employer and 3.33% is shouldered by the employee. well, not for household helpers earning below 5,000.

just thought i'd pass the info to you.

Reminders for SSS payments

Loans are paid on or before the 10th of the following month.  Otherwise it will be in default.

Deadline for payment of Contributions depends on the last digit of the SSS Number.

Remember, if you applied for loan condonation that ended last 30 September 2012,
YOU DO NOT WANT TO BE IN DEFAULT...

Did you apply for loan condonation that ended last Sept 2012?

good if you were able to catch the deadline for the loan condonation.

this is to remind those who availed that defaulting on the loan for 2 months has its consequences, 2 of them major:
1. your entire loan becomes due and demandable
2. permanent suspension of your loan privileges

there are other consequences - but these 2 are rather tough

so DO NOT default on your monthly amortization.  you do not want to lose your member loan privileges.


this is also to remind you that if you are a registered online member, the Statement of Account that you will see does not accurately reflect that the loan is already due and demandable right after 2 months non-payment

comment if you have questions

Reaction to HTT's Friday post on increasing the SSS pension

Click here to read HTT's pension-adjustments-in-2013/

no arguments on this one.  i do believe the current generation always pays for the sins of the previous...
remember the sins of the father????

also true for pensions.  our dear president must indeed bite the bullet, and approve.  they bit the bullet for the RH bill, didnt they?  although one of my dear friends have said it also involved big business.....*shrugs*
for me, like i mentioned in an earlier separate post, it is about choices, and the way we involve the God one believes in those choices.  sometimes it seems there are no choices...... 

but pensions. they do need to be adjusted. i just hope that when it is my turn to get my pension, they will be favorably adjusted as well.  in fact, the president of the SSS. Emilio S. de Quiros, brother of columnist Conrado de Quiros only proposed a 20K MSC limit (it is currently at 15K).  i always thought it should be at a minimum of 30K.  i prefer 50K but no one is listening to me on that point. The Actuarial people will object,  most assiduously.  can you imagine how much furor (not Fuhrer) that will raise?  *sigh*

on the other side of the coin.  i encourage people to contribute - and at higher levels.  Higher levels mean higher pensions - and todays limits are just the pits.  too low - in my personal opinion.  really too low. and your pension - SSS that is, will be about 40% of the just the pits MSC.

i encourage entrepreneurship.  knit! crochet! sell this abroad!  People need to have some retirement plan unless you are very financially savvy, it would be hard to survive on the SSS pension alone, and if you dont have any, welllllllll ..... it would even be harder, unless you are a GSIS pensioner with their no limit MSC, or if Daddy (or Mommy, for that mater) has oodles of money like Unca Scrooge of the Disney Ducks.

so pay your contributions, and dont complain too much about the increase. it will be in your favor when it is time for you to quit working ..... 

So, whatever happened to the PERA?  i keep waiting for HTT to tackle it but he says the time isnt ripe yet....

On the SSS Loans Recent "Fracas" ... addendum - CHeck out HTT's column

As an SSS member, i read with Spockian eyebrow about the recent lambasting of the SSS due to the salary loan interest computation.

What is all this fuss?  Dont you check what you have to pay before you take out a loan?  Or do you blindly sign for a loan? if the member checked it out, then that means he agreed to the loan, with all its ramifications, yes? do i hear a no?

Have you read about it?  Does it bother you as a member?  Most members use it when they need funds immediately and it is usually only the actively employed who pays their loans.  No surprise there as the employer deducts the amortization from one's income.the rest of the members forget they have loans.

everyone i discuss sss with, i say, dont forget to pay your loan.  if you cant pay in bulk, then pay what you can as regularly as you can.

do a Sinatra (i listen to oldies but goodies), that is "regrets, i have a few" only.

HTT's take on the loans ... vs pensions

He's 45 and hasnt paid any SSS contributions

i rode a cab from lunch and as is usual with me and cabs - and cabdrivers, of course -i mentioned SSS.  i want everyone to have a pension because everyone needs one.   yes, everyone NEEDS a pension. okay, so maybe Bill Gates might not need one but then there are very few like him.

my cab driver is 45.  he has zero SSS contributions.  he wants to contribute but is basically thinking that it is too late.  lucky for him, i was his passenger. *grins*

i let him know that it is NOT too late and that he can register and start paying asap.  he only needs his NSO birth certificate and then fill up an E1, then pay as SE- self employed.  If he already wanted to put his wife and kids, then i told him to include his marriage contract and his children's birth certificate.

and then pay.  i told him to pay as much as he can afford, that is to pay maximum.  i told him the amount, which is 1,560.00 monthly or for 4,680.00 quarterly.

likewise, i told him to pay his PhilHealth since we dont know how time will shape us and what fortune brings us.

SSS Payment Channels overseas

just in case you find it easier to navigate here

click here for list of payment channels overseas