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REPUBLIC ACT NO.

7699
The Limited Portability of Law
AN ACT INSTITUTING LIMITED PORTABILITY SCHEME IN THE SOCIAL SECURITY INSURANCE SYSTEMS BY TOTALIZING THE WORKERS' CREDITABLE SERVICES OR CONTRIBUTIONS IN EACH OF THE SYSTEMS.

POLICY OF THE STATE (Section 1)


Promotion of the welfare of the workers by recognizing their efforts in productive endeavors; Improve of their conditions by providing benefits for their long years of contribution to the national economy; Totalization and portability of social security benefits with the view of establishing within a reasonable period a unitary social security system.

It is includes contributions paid by the employee or worker on account of the workers membership to the system, either the GSIS or SSS.

DEFINITION OF TERMS
TOTALIZATION PORTABILITY

The process of adding up the periods of creditable services or contributions under each of the Systems, for purposes of eligibility and computation of benefits.

The transfer of funds for the account and benefit of a worker who transfers from one system to the other

OVERLAPPING PERIOD Period during which a worker simultaneously contributes to BOTH Systems.

Who are the covered workers?


1. Those who Transfer employment from public to private sector or vice versa, or

2. Employed in both private or public sectors

Method: The Creditable Services or Contributions in both systems shall be:


1. Credited to their service or contribution record in each of the systems; and 2. Totalized for purposes of old-age, disability, survivorship and other benefits in case the covered member does not qualify for benefits in either or both systems without totalization.

Note: In cases of overlapping periods of membership, it shall be credited only once for purposes of totalization. (Section 3)

What are the Creditable Services?


For the public sector, 1. All previous services rendered by an official/employee pursuant to an appointment whether permanent, provisional or temporary; 2. All previous services rendered by an official/employee pursuant to a duly approved appointment to a position in the Civil Service with compensation or salary. 3. The period during which an official/employee was on authorized sick leave of absence without pay not exceeding one year; 4. The period during which an official/employee was out of the service as a result of illegal termination of his service as finally decided by the proper authorities; and; 5. All previous services with compensation or salary rendered by elective officials.

TOTALIZATION: When does it apply?


If a worker is not qualified for any benefits from both Systems; or If a worker in the public sector is not qualified for any benefits from the GSIS; or If a worker in the private sector is not qualified for any benefits from the SSS.

PROPOTIONALITY OF BENEFITS
Benefits to be paid by one System shall be in proportion to the number of contributions ACTUALLY REMITTED to that System.

Note: All contributions paid by such member personally, and those that were paid by his employers to both Systems shall be considered in the processing of benefits which he can claim from either or both Systems.

How to resolve Workers with OVERLAPPING PERIODS?


Overlapping periods of creditable services or contributions in both Systems shall be credited only once for purposes of totalization.

Formula: Creditable Services (CS)/Period of Contributions (PC) in case there is/are overlapping period/s (OP): therefore, CS/PC = Total years of service under GSIS + Total years of service under SSS OP

QUESTION
A worked for the government sector for 5 years and then worked for the private sector for 5 years, or 60 months for each of the systems (GSIS and SSS), then A migrated and did not continue his contributions to SSS as a voluntary member. Now A comes back to the Philippines, and A is asking for you advise, What will you tell him?

ANSWER
Advise A and comply with the requirements of SSS. With totalization, based on the ratio of 60/120 or 50%, SSS will give him 50% of the pension he would have gotten based on the AMSC (Average Monthly Salary Credit) in the SSS.

FOLLOW UP QUESTION
Can A qualify for GSIS PENSION?

ANSWER
Yes. With totalization, based on the ratio of 60/180 or 33%, GSIS will give him 33% of the pension he would have gotten based on the AMSC (Average Monthly Salary Credit) in the GSIS.

QUESTION
B has 10 years of government service and 7 years of private sector employment. Where will B qualify for the pension?

ANSWER
NONE!!! However, THANKS TO RA 7699 we will have the following:

With Totalization on our side:


B will qualify for both systems.
The pension for SSS will be 7/10 or 70% of the pension he would have gotten based on his Average Monthly Salary Credit (AMSC) . For GSIS, B will receive 10/15 or 2/3 (or 66.667%) of the pension he would have received.

JURISPRUDENCE related to RA 7699


Resolution no. 01-0498; Villones, Sonia L.
Re: Payment of Benefits

RA 7699, otherwise known as AN ACT INSTITUTING LIMITED PORTABILITY SCHEME IN THE SOCIAL SECURITY INSURANCE SYSTEMS BY TOTALIZING THE WORKERS' CREDITABLE SERVICES OR CONTRIBUTIONS IN EACH OF THE SYSTEMS provides: a covered worker who transfers employment from one sector to another or is employed in both sectors shall have his creditable services or contributions in both system credited to his service or contribution record in each of the systems and shall be totalized for the purpose of old-age, disability, survivorship and other benefits in case the covered member does not qualify for such benefits in either or both systems without totalization. This being so, Villones cannot be entitled to separation pay considering that in 1995, upon reaching the age of 60 yrs. old, he retired with the SSS and was already receiving his monthly pension while still with the SICIWA. In other words, he has already been compensated the old-age benefits contemplated under RA 7699.

JURISPRUDENCE related to RA 7699


G.R. No. 141707; Gamogamo v. PNOC Shipping and Transport Co.
Petitioners contention that the principle of tacking of creditable service is mandated by RA 7699 is baseless. Section 3 of RA 7699 reads: Sec. 3. Provisions of any general or special law or rules and regulations to the contrary notwithstanding, a covered worker who transfers employment from one sector to another or is employed in both sectors shall have his credible services or contributions in both Systems credited to his service or contribution record in each of the Systems and shall be totalized for purposes of old-age, disability, survivorship and other benefits in case the covered member does not qualify for such benefits in either or both Systems without totalization: Provided, however, That overlapping periods of membership shall be credited only once for purposes of totalization.
Obviously, totalization of service credits is only resorted to when the retiree does not qualify for benefits in either or both Systems. Here, petitioner is qualified to receive benefits granted by the GSIS. (Section 12(b) of Presidential Decree No, 1146, as amended, otherwise known as the Government Service Insurance Act of 1977 states, A member who has rendered at least three years but less than fifteen years of service at the time of separation shall, upon reaching sixty years of age or upon separation after age sixty, receive a cash payment equivalent to one hundred percent of his average monthly compensation for every year of service with an employer.)