SSS to be strict in enforcing guidelines

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Wednesday, November 3, 2010

TO cut down on the loan delinquency of members, the Social Security System (SSS) will be strictly enforcing existing guidelines, including the requirement of employers to be updated in contributions and loan remittances.

SSS Cebu City Branch Head Mario V. Corro admitted that they received many complaints from companies after they strictly enforced the policy during the third week of September.

“The new administration is bent on implementing policies that were not implemented before,” Corro said. The requirement for employers to be updated in contributions and loan remittances has been in effect since 2004 but Corro said it was not widely
enforced until last September.



When they first implemented the policy, they received numerous complaints.

Some employers were tagged as delinquent when some of their employees were unable to pay their loan remittances.

Corro said employers who certified for their employees are obligated to deduct and remit from an employee’s salary a fixed amount to be able to pay the employee’s loan amortization with the SSS.

He said some employers failed to deduct the corresponding amounts from some employees who resigned and were then tagged as delinquent.

Corro said that what an employer should do is deduct the full amount from an employee’s separation pay and terminal leaves before the worker leaves.

If an employer is tagged delinquent, all his employees will be unable to avail themselves of their salary loans, even if these employees have no outstanding balances.

Corro added that anyone who reads the terms and conditions at the back of the application forms will see the policy.

But because of the confusion, SSS President and CEO Emilio de Quiros Jr. issued a moratorium, allowing employers until the middle of the month to clear their delinquent status.


Most of the delinquencies were caused by “procedural bog-downs” due to movements of employees.

The moratorium allows employees of delinquent employers to avail themselves of the salary loan.

Until then, Corro encouraged employers to reconcile their documents and work on getting themselves untagged as delinquents.

Employers can submit an affidavit with a list of separated employees and the date of their separation, SSS collection lists, resignation letters of separated members or R3 forms received by an SSS branch.

Overdue payments from delinquent members reached P27.51 billion. Employed members comprise 83 percent of unpaid loans.

SSS plans to collect P19 billion from overdue loans within three years, including P4.54 billion for this year.

Under existing policies, loans are charged 10 percent interest annually for a term of two years and a one percent penalty for overdue payments. Any unpaid loans incur continuing interest and penalties.

New employees are also required to report existing loans upon transfer to a new company so the new employer can continue deducting and remitting payments to SSS.

According to the SSS, there are more than six million loan accounts and 87 percent of this are delinquent. Employed members comprise 83 percent of unpaid loans.

Published in the Sun.Star Cebu newspaper on November 04, 2010.


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