The Social Security System (SSS) has approved higher guaranteed earnings for members of its special provident fund for overseas Filipino workers, called Flexi-Fund, to help them save more for retirement and encourage other OFWs to participate in the program. Starting July 2012, interest earnings under the Flexi-fund Program will be based on average rates of SSS’ short-term placements or 91-day T-bills, whichever is higher.
“With higher guaranteed interest rates, OFWs can further increase their retirement savings and benefit from prime rates obtained in short-term peso placements as against low interest rates offered in government auctions,” SSS President and Chief Executive Officer Emilio de Quiros, Jr. said.
The Flexi-fund is a voluntary provident fund launched in July 2001 to provide additional social security protection to overseas workers. The program is open to OFW-members paying SSS premiums at the maximum monthly salary credit, which at present is pegged at P15,000.
The average 91-day T-bill rate previously served as sole basis for computation of guaranteed interest income since January 2004. The SSS will continue its quarterly repricing of interest rates to keep the Flexi-fund in step with current market conditions.
De Quiros said members without withdrawals and benefit claims within a given year will also receive annual incentives for account retention effective December 2012.
“The annual incentive benefit aims to motivate OFWs to keep their Flexi-fund equity intact and ensure its continued growth for future use. This incentive will be automatically credited to members’ Flexi-fund accounts within the first quarter of the following year,” he added.
The incentive benefit will be equal to the member’s share to net interest income earned by Flexi-fund investments, which means qualified OFWs with a bigger amount of equity are entitled to higher annual incentives.
The Flexi-fund currently has over 37,000 paying OFW-members with a combined equity of nearly P312 million. Any amount, not lower than P200, paid by OFWs on top of their maximum monthly SSS contribution goes straight to their Flexi-fund accounts.
“Flexi-fund members reap the benefits of having both a pension plan and savings account. They can choose to receive their savings in lump sum or as pension to supplement their retirement, disability and death benefits under the regular SSS program,” de Quiros said.
The SSS also allows members to withdraw their accumulated Flexi-fund contributions and interest earnings anytime. Interest earnings, which start to accrue from the date of contribution payment, are credited to individual accounts at the end of each month. –Sigfredo Ibay, SSS Media