EMPLOYEE BENEFITS AND

SOCIAL INSURANCE

ARIEL M. LORENZO
WHAT ARE EMPLOYEE BENEFITS?

Employee benefits are They are provided by

any kind of tangible or organizations in addition
intangible compensation to salary to create a
given to employees apart competitive package for
from base wages or base the potential employee.
salaries. (Doyle, 2019)
 WHY DO EMPLOYERS OFFER BENEFITS TO
EMPLOYEES?

*top reason of looking for a job help you take care of high-performing
employer brandi
outside their organization; and for ng efforts employees without the need to keep
choosing to stay at their job . investing in exceptionally high pay
(Extensive research by the Society raises. All employees should get paid
of Human Resource Management enough to pay the bills and live
(SHRM)  comfortably
indicates that 92% of employees)
 Short Term Benefits

Termination Benefits
EMPLOYEE
BENEFITS
Post-Employment Benefits
(DANIEL RYBA,
IAA)
Other long-term employee
benefits 
 • For current employees
• Short-term employee benefits are offered to employees within
SHORT-TERM the current 12-month period. They include the following:
BENEFITS • Absences. Compensated absences where payment is settled
within 12 months of when employees render related services, for
example, vacation, short-term disability, jury service, and
military service.
• Base pay. Wages and social security contributions.
• Nonmonetary benefits. Medical care, housing, cars, and various
subsidies for other goods or services.
• Performance pay. Profit sharing and bonuses payable within 12
months of when employees render related services.
TERMINATION
BENEFITS
• payments arising as a result of an employee leaving
service.

• Termination benefits are cash and other services paid to

employees when their employment has been terminated.
The extent of these benefits may be based on company
policy or they may be negotiated on an individual basis.
The most common termination benefits are a
severance payment, extended health insurance coverage
and assistance in finding a new job.
POST-EMPLOYMENT BENEFITS

Employee benefits other (E.g. Retirement benefits

than termination benefits such as pension, various
that are payable after the post-employment insurance
completion of employment or medical care plans)
OTHER LONG-TERM
EMPLOYEE BENEFITS 

• including long-service
leave, sabbatical
leave, and other long-
service awards
 •Private Health Care Plan (Medical, Dental & Vision)
•Retirement / Pension plans
COMMON AND •Training and Development
BEST EMPLOYEE •Stock option plans
BENEFITS •Work From Home and/or flexible hours
(TOP 10
•Food and snacks
EMPLOYEE
•Life insurance
BENEFITS
•Extended leave (Vacation, Sick)
WORLDWIDE)
•Bonuses / Awards / Gifts
•Company equipment (including vehicles, laptops,
phones)
 SOCIAL
INSURANCE
SOCIAL • is a mandate to a government to provide
INSURANCE indemnification of loss to its citizens.
This is one of the different means
where the government is using the tax it
collects from its constituents.
 GOVERNMENT SERVICE INSURANCE SYSTEM
(HTTPS://WWW.GSIS.GOV.PH/DOWNLOADS/PUBLICATIONS/20150825-RETIREMENT_BROCHURE.PDF)

• a government-owned and controlled corporation

 (GOCC) of the Philippines. Created by
Commonwealth Act No. 186 and Republic Act No.
8291 (GSIS Act of 1997), GSIS is a social insurance
institution that provides a defined benefit scheme
under the law. It insures its members against the
occurrence of certain contingencies in exchange for
their monthly premium contributions.
WHO ARE THE GSIS MEMBERS?

This trust is for the government employees only, with the following exceptions:
• Judiciary and Constitutional Commissions associates granted with different retirement
privileges.
• AFP and PNP (and the Bureau of Jail Management & Penology and the Bureau of Fire
Protection) members in uniform.
• Barangay and Sangguniang officials don’t have fixed wage per month
• Contractual employees who have no employee-employer relationship with their agencies;
 • Active Members are the individuals
currently employed in any government
office.
WHAT ARE THE • Old Age Pensioners are the government
TYPES OF GSIS officials or employees who are already
MEMBERSHIP? retired and receiving the returns of their
contributions (pension) from GSIS.
• Survivorship Pensioners are the dependents
of a retiree or deceased GSIS member.
 • Generally, GSIS provides members
with life insurance, disability
privileges, and retirement plans.
MAIN GSIS
BENEFITS However, the benefits for each member
vary according to their type of
membership, amount of contributions,
and account history.
 • LEP is the old insurance coverage issued to GSIS
members who entered the government service before
August 1, 2003.
1. GSIS LIFE • New entrants in the government service (on or after
INSURANCE August 1, 2003) are now covered by ELP.
COVERAGE • Cash surrender value
• Waiver of premiums due to PTD
A. LIFE • Death benefit
ENDOWMENT
• Policy loan
POLICY (LEP)
• Dividends
• LEP policyholders can choose to convert their policy
to an Enhanced Life Policy which we will discussed
in the next slide.
 • You are covered by ELP under any of the following conditions:
1. GSIS LIFE • 1. You are a government employee who entered the service after July
INSURANCE 31, 2003;
COVERAGE • 2. Your LEP has matured after July 31, 2003. (You will be issued a
new ELP);
• 3. You are a regular GSIS member whose LEP has lapsed due to
B. ENHANCED
nonpayment of life insurance premiums but continue to be in active
LIFE POLICY service. (You will be issued a new ELP); or
(ELP) • 4. You are a regular GSIS member who opted to convert your
existing LEP into ELP.
ELP BENEFITS

• 1. Termination value – the accumulated amount earned based on premium payment while
the ELP is in force. It is equivalent to 25% of the monthly life insurance premium paid,
which can be withdrawn upon separation or retirement.
• 2. Death benefit – equivalent to the last annual salary multiplied by 1.5. Compared to
LEP, ELP has higher death benefit as this is focused more on the financial support to the
family and beneficiaries of the deceased member.
• 3. Annual dividend based on the termination value and earnings of the Social Insurance
Fund.
• 4. Policy loan equivalent to 90% of the termination value.
2. GSIS
RETIREMENT
PROGRAMS
2. A. RETIREMENT UNDER REPUBLIC
ACT 660

• Retirement under RA 660 (also known as

‘Magic 87’), may be availed by members
who are 52 years old  for as long as they have
already been in government service for the
past 35 years.
• Also known as Magic 87, this plan is
available if:
• (your age) + (years of service) = 87
2. A. RETIREMENT UNDER REPUBLIC ACT 660 • Entered government service on or before May
QUALIFICATIONS
31, 1977;
• Last three years of service prior to retirement
should have been continuous, except in cases
of death, disability, abolition, and phase- out
of position due to reorganization;
• Appointment status should be permanent;
• Meet the age and service requirements under
the “Magic 87” formula. Based on the
formula, a retiree’s age and years in service
should be added up and should total at least
87.
2. A. RETIREMENT UNDER REPUBLIC ACT • Option 1: Automatic Pension – Under this option, retirees
660
below 60 years old may choose to receive either an automatic
RETIREMENT PACKAGES monthly pension for life or an option to avail of a lump sum.
The lump sum, which can be requested every six months,
means they can receive their one-year monthly pension in
advance for a period of five years. On the sixth year, they will
start receiving their lifetime monthly pension.
•  Option 2: Initial three-year lump sum – Those who are at
least 60 years old but less than 63 years on the date of
retirement are entitled to a three-year lump sum. The
subsequent two-year lump sum will be paid to retirees on their
63rd birthday. Retirees still living after the five-year guaranteed
period, will be entitled to a monthly pension for life.
•  Option 3: 5-Year Lump sum- Those who are 63-65 years old
may avail of a five-year lump sum. After five years, they will
receive a monthly pension for life.
B. RETIREMENT UNDER REPUBLIC
ACT 8291
(HTTPS://WWW.GSIS.GOV.PH/ACTIVE-MEMBERS/BENEFITS/RETIREMENT/RETIREMENT-UNDER-
REPUBLIC-ACT-8291-GSIS-ACT-OF-1997/#:~:TEXT=RETIREMENT%20UNDER%20RA%208291%20MAY,BE
%20CONTINUOUS%20UNDER%20RA%208291.) • Retirement under RA 8291  may be availed
by those who have rendered at least 15
years of service in government and must be
at least 60 years of age upon retirement. 
Also, they must not be permanent total
disability pensioners.
• The last three years of service  need not  be
continuous under RA 8291.
B. RETIREMENT UNDER REPUBLIC ACT 8291

RETIREMENT PACKAGES
• Option 1: 5-Year Lump Sum and Old Age Pension
Under this option, retirees can get their five-year pension in
advance. The lump sum is equivalent to 60 months of the
Basic Monthly Pension (BMP) payable at the time of
retirement. After five years, retirees will start receiving their
monthly pension.
• Option 2: Cash payment and Basic Monthly
In option 2, retirees will receive a Cash Payment equivalent
to 18 times the Basic Monthly Pension (BMP) payable upon
retirement and then a monthly pension for life, payable
immediately after retirement date.
C. RETIREMENT UNDER
REPUBLIC ACT 1616

• To qualify under the mode, a retiree must:

• be in government service on or before May 31, 1977
• has rendered at least 20 years of service regardless
of age and employment status
• His/her last 3 years of service prior to retirement
must be continuous, except in    cases of death,
disability, abolition or phase out of position due to
reorganization.
 C. RETIREMENT UNDER REPUBLIC ACT
1616

RETIREMENT PACKAGES

• Since RA 1616 is considered as the “Take All Retirement” mode, it

provides the following benefits:
 
1.    Gratuity payable by the last employer based on the total creditable
service converted into gratuity months multiplied by the highest
compensation received. The gratuity months shall be computed as follows:
•        Years of Service                            Gratuity Months
       First 20 years                                 one (1) month salary
       20 years to 30 years                     1.5 months salary
       Over 30 years                                two (2)  months salary
• (There is no limit to the amount of gratuity benefit.) and
• 2.     Refund of retirement premiums consisting of personal contributions of
the employee plus interest, and government share without interest, payable
by the GSIS.
 D. RETIREMENT UNDER REPUBLIC ACT 7699

• Under RA 7699, otherwise known as the Portability Law,

government retirees who do not meet the required number
of years provided under PD 1146 and RA 8291 may still
avail themselves of retirement and other benefits.
• Under this law, retirees may combine their years of
service in the private sector represented by contributions
to the Social Security System (SSS) with their
government service and contributions to the GSIS to
satisfy the required years of service under PD 1146 and
RA 8291.
3. GSIS SEPARATION
BENEFITS This is given to those who are separated from service but have
not reached the age of 60. Benefits can take the form of cash
payment or a combination of cash payment and pension.
A. The member (below 60 years of age) has rendered service
for a minimum of three years but less than 15 years:
• Cash payment = 100% of the average salary in the last three
years (Average Monthly Compensation) for every year of
service payable on reaching the age of 60.
B. The member (below 60 years of age) has rendered service
for a minimum of 15 years:
• Cash payment = 18 times of the Basic Monthly Pension
payable on reaching the age of 60.
• BMP is calculated as (.025) x (AMC +700) x Period with
Paid Premiums
OTHER GSIS PRIVILEGES

• 1.GSIS Unemployment Benefits : Paid when permanent government employees are

involuntarily separated from the service as a result of the abolition of their office or
position, usually resulting from reorganization.
• 2. GSIS Disability Benefits : a) Permanent Total Disability, b) Permanent Partial
Disability, and c) Temporary Total Disability. (https://www.gsis.gov.ph/?
csrt=18283844960848946612)
• 3. GSIS Survivorship Benefits
• 4. GSIS Funeral Benefits : P30,000. 00
 SOCIAL SECURITY SYSTEM
HTTPS://WWW.SSS.GOV.PH/SSS/DOWNLOADCONTENT%3FFILENAME%3DIRR-RA11199-SS-ACT-OF-2018.PDF)

• The Social Security System (SSS; Filipino:

Paseguruhan ng Kapanatagang Panlipunan) is a state-
run, social insurance program in the Philippines to
workers in the private, professional and informal
sectors. SSS is established by virtue of Republic Act
No. 1161, better known as the Social Security Act of
1954. This law was later amended by Republic Act No.
8282 in 1997. Government employees, meanwhile, are
covered under a separate state-pension fund by the
Government Service Insurance System (GSIS).
SERVICES

• SSS provides death, funeral, maternity leave, permanent disability, retirement, sickness and
involuntary separation/unemployment benefits. The Employees' Compensation (EC)
Program which started in 1975 provided double compensation to workers who had illness,
accident during work-related activities, or died. EC benefits are granted only to members
with employers other than themselves.
• SSS members can make 'salary' or 'calamity' loans. Salary loans are calculated based on a
member's particular monthly salary credit. Calamity loans are for instances when the
government has declared a state of calamity in the area where an SSS member lives,
following disasters such as flooding and earthquakes.
HOW MUCH OF YOUR INCOME IS REQUIRED FOR SSS
CONTRIBUTION?

• Your monthly contribution is based on your compensation. The current SSS contribution
rate is 11% of the monthly salary credit not exceeding ₱16,000 and this is shared by the
employer (7.37%) and the employee (3.63%).
EXAMPLE

• If your monthly salary is ₱30,000, your contribution will only be based on ₱16,000
(which is the highest monthly salary credit). You shall then pay the amount of ₱581.30,
while your employer will pay ₱1,208.70, for a total contribution of ₱1,790.00 per month.
• For self-employed and voluntary members, the contribution rate is 11% of the monthly
salary credit (MSC) based on the monthly earnings declared at the time of registration.
For OFWs, the minimum monthly salary credit is pegged at ₱5,000. Meanwhile, non-
working spouses’ monthly contribution is based on 50% of the working spouse’s last
posted monthly salary credit but in no case shall it be lower than ₱1,000.
WHO SHOULD BE COVERED BY SSS AS MANDATED BY LAW?

• Compulsory coverage is the mandatory registration of employees, employers and self-

employed persons with the SSS, with corresponding payment and remittance of social
security contributions. To be specific, they are the following:
EMPLOYER • An ER is any person who uses
(ER)
and pays for the services of
another person in any business,
trade, industry, or undertaking.
 An EE could be:

EMPLOYEE • a worker in the private sector, regardless of status of

employment, whether permanent, temporary, or
(EE) provisional, who is not over 60 years of age (up to 60th
birthday, if initial coverage);
• a house helper who is not over 60 years of age (up to 60th
birthday, if initial coverage);
• a Filipino seafarer, upon signing of the standard
employment contract and actual deployment by the
manning agency and the foreign principal, who are
considered as the ERs; or
• a worker of a foreign government or international
organization, or its wholly-owned instrumentalities, with an
approved Administrative Agreement with the SSS.
SELF- • An SE is an individual who is:
EMPLOYED
(SE) • engaged in any trade, business or
occupation, who has no ER other than
himself,
• derives an income of at least ₱1,000 a
month from his/her physical and mental
efforts, and
• not over 60 years of age (if initial
coverage).
WHAT IS VOLUNTARY SSS COVERAGE?

Voluntary coverage is the non-mandatory registration and payment of social security

contributions by any of the following:
 A VM is one:

who was previously covered as an SSS member either as an

EE, SE, or OFW;
VOLUNTARY
MEMBER (VM) has at least one (1) posted contribution;

is no longer engaged or working as either an EE, SE, OFW,

or has no income/earnings as such for a given period; and

opts to continue paying contributions on a voluntary basis

to maintain his/her right to full SSS benefits.
OVERSEAS • An OFW is any of the following types of overseas-
FILIPINO based Filipino:

WORKER
• recruited in the Philippines by foreign-based ERs for
(OFW) employment abroad;
• having a source of income in a foreign country; or
• residing permanently in a foreign country.
NON-WORKING SPOUSE (NWS)

• An NWS is a married person who devotes full time in the

management of the household and family affairs, unless he/she
is engaged in other vocation or employment that is subject to
mandatory coverage.
 The benefits under the Social Security Program are:
• Sickness Benefit. It’s a daily cash allowance paid for the number of days a
member is unable to work due to sickness or injury.
TYPES OF • Maternity Benefit. It’s a daily cash allowance granted to a female member who
SSS is unable to work due to childbirth or miscarriage.
• Disability Benefit. It’s a cash benefit granted – either as a monthly pension or a
BENEFITS lump-sum amount – to a member who becomes permanently disabled, either
partially or totally.
• Retirement Benefit. It’s a cash benefit granted – either as a monthly
compensation or a lump-sum amount – to a member who can no longer work
due to old age.
• Death. It’s a cash benefit granted – either as a monthly compensation or lump-
sum amount – to the beneficiaries of a deceased member.
• Funeral. A funeral grant of ₱20,000 to whoever paid for the burial expenses of
the deceased member.
• Salary Loan. It’s a cash loan granted to an employed, currently – paying self-
employed or voluntary member. It is intended to meet the member’s short-term
credit needs.
WHO ARE CONSIDERED AS PRIMARY SSS BENEFICIARIES?

• Your primary beneficiaries are your legitimate dependent spouse until he or she
remarries, and your dependent children – whether legitimated or legally adopted, or
illegitimate, who are not yet 21 years old.
• If you’re single and without children, the benefits will go to your parents who are
considered as your secondary beneficiaries.
• In the absence of both primary and secondary beneficiaries, any other person that you
designate in your SSS records shall be considered as the beneficiary.