SSS explains policy on return of lump sum retirement benefit
Tacloban City (August 21) -- Social Security System (SSS) President and CEO Corazon dela Paz, in a Circular No. 40-P explained the policy on the return of Lump Sum retirement benefit to qualify the retiree to pension benefits under the Portability Law (RA 7699).
RA 7699 is otherwise known as An Act Instituting Limited Portability Scheme in the Social Security Systems by Totalizing the Workers' Creditable Services or Contributions in Each of the System.
Republic Act 7699 provides that all contributions paid by such member personally and those that were paid by his employers to Systems, GSIS and SSS, shall be considered in the processing of benefits which the member can claim from either or both systems.
This is provided that the amount of benefits to be paid by one System shall be in proportion to the number of contributions actually remitted to that System.
In this connection, the Social Security System issued Resolution No. 13 s. 2007 approving the policy on the return of lump sum retirement benefit for the purpose of qualifying RA 7699.
The SSS Resolution states that a retiree who wishes to convert his lump sum benefit to lifetime pension shall be allowed to return the cheque representing the lump sum retirement benefit within six months from the date of settlement and apply for retirement pension under the terms and conditions of the Portability Law.
Furthermore, the Resolution provides that if the cheque has been encashed, a one percent (1%) interest per month shall be charged effective on the date of encashment to the time of application for pension.
The cheque amount plus the interest shall be deducted from the proceeds of the pension benefit. (PIA 8) [top]