IN September 2018, the Social Security System began offering the Pension Loan Program to provide immediate financial assistance to qualified SSS retirees through a low-interest loan. We are aware that in previous years most of them have applied for personal loans from various private loan companies who charge higher interest rates with pledged collateral like their ATM cards (ATM). This is where the SSS comes in when it finally opened up the PLP to all of its retirees.
To be eligible, they must meet the following conditions:
- 85 and under at the end of the last month of the term of the loan;
- no outstanding loan balances and overpayments of benefits payable to SSS;
- no existing early pension under the SSS Calamity Assistance Package; and
- must have been receiving their regular monthly pension for at least one month with an “active” status.
Under this scheme, qualified retirees can avail a loan equivalent to three, six, nine or 12 times their Basic Monthly Pension (BMP) plus their additional benefit of P1,000. However, the loanable amount does not must not exceed the maximum loan limit of P200,000, which in turn may be payable in six, 12 or up to 24 months.
In the first year of PLP, SSS disbursed a total of 2.52 billion pesos to 74,503 pension loan borrowers, while in 2020 we repaid a total of 3.39 billion pesos to 74 799 retirement loan borrowers. From January to December 2021, we granted a total of 3.08 billion pesos to 69,039 retirement loan borrowers. It only goes to show that PLP has truly served its purpose in helping our retirees during this pandemic where additional funds have been allocated for medical and other purposes.
Under the program, the monthly amortization will be deducted from the retirement loan borrower’s monthly pension. As agreed in the contract, SSS regularly deducts the monthly amortization from the monthly annuity. What is important here is that retirees still retain a net pension equivalent to at least 47.25% of their basic monthly pension, including the additional benefit of P1000 which was granted by the SSS from of January 2017.
Also good news, effective January 20, 2022, SSS has implemented a one-time 60-day refund of monthly pension loan payments to all PLP borrowers. Reimbursement is based on Circular 2022-002 and in accordance with the provisions of Republic Act 11494 or the Bayanihan to Recover as One Act. Under the said law, banks, quasi-banks, finance companies, loan companies and other financing institutions, public and private, were asked to grant a grace period of 30 days for the repayment of borrowers’ loans without incur interest, penalties, fees, and other charges. The provision covered loan repayments with contributions that fall between September 15 and December 31, 2020.
“Currently being amortized”, as stated in the circular, refers to PL borrowers whose loans mature, or part thereof, on or before December 31, 2020. PL borrowers with pending applications reconsideration or adjustment of pension benefits or whose conditions have already ended before the implementation of the refund are not yet eligible.
SSS reimburses the PL amortizations deducted from the borrower’s pension, as follows:
Reimbursement extends the duration of the PL by one month or two months, depending on the case:
1. PL borrowers currently in amortization and retirees who applied for PLs in August and September 2020 will be eligible for a two-month repayment;
2. Those who applied for PLs in October will be entitled to a one-month refund (first amortization starting in December 2020); and
3. Retirees who applied for PLs in November and December 2020 will not be eligible for repayment as per the guidelines of the Enhanced Retiree Pension Loan Scheme, the first monthly amortization will become due the second month after loan issuance .
The repayment amount will be credited immediately after the repayment is implemented on January 30, 2022 to the borrower’s savings account PL, which must be in the following order of priority:
1.SSS UMID-ATM card; Where
2. Union Bank of the Philippines Quick Card.
Additionally, the repaid amount will be deducted from the PL borrower’s monthly pension over the extended term of the loan. Borrowers need not worry as SSS will not charge any additional interest or penalty for the extended loan term due to repayment. The PL will continue to be insured for the extended term and SSS will not charge PL borrowers additional premiums for the extended insurance coverage.
Eligible PL borrowers will not be required to file an application or demand for reimbursement with the SSS. All PL borrowers eligible for repayment will be allowed to apply for loan renewal after their original payment terms have expired. Whereas, the remaining balance of their loan will be deducted from the proceeds of the new PL.
Earlier this year, SSS received an attestation from SOCOTEC Certification Philippines, Inc., the leading provider of accredited ISO certification services with over 5,000 clients in 26 countries around the world, that its process of issuing loans for retirement of all branches of SSS Luzon Operations Group has undergone a thorough assessment of their quality management system in accordance with the requirements of ISO 9001:2015. ISO 9001:2015 is a global standard that determines that an organization is capable of delivering international quality and services consistently. This only proves that SSS is constantly devising ways to improve and improve its systems and processes for the benefit of our SSS members, employers, retirees and the general public.
Have a good day everyone!
Aurora C. Ignacio is President and CEO of SSS.
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