Addressing the problem of Social Security System

with regards to the Delinquency of the Employers

in the Remittance of their Employees Social Security System
Contributions

by
REHOM P. PIMENTEL

A Practicum Paper (Organizational Analysis) submitted in
Partial Fulfilment of the requirements for the Degree of
Bachelor in Public Administration and Governance

to
the College of Political Science and Public Administration
Polytechnic University of the Philippines
Sta. Mesa, Manila

April 4, 2014




CHAPTER I
INTRODUCTION AND SOURCE OF BACKGROUND OF THE STUDY

A. Organization Profile
Social Security System was created, as mandated by R.A. 8282 or the
Social Security Act of 1997, to establish, develop, promote and perfect a sound
and viable tax-exempt social security system suitable to the needs of the people
throughout the Philippines which shall promote social justice and provide
meaningful protection to members and their families against the hazards of
disability, sickness, maternity, old age, death and other contingencies resulting in
loss of income or financial burden. Toward this end, the State shall endeavor to
extend social security protection to workers and their beneficiaries.
It is tasked to implement meaningful programs so that all workers in the
private sector, including those in the informal sector are covered and provided
with the social protection that they deserve. The SSS envisioned a viable social
security institution providing universal and equitable social protection through
2

world-class services. It also aims to institutionalize a corporate culture that instills
the core values of trust, empowerment and teamwork.
The SSS covers all the Private Sector Employee (whether permanent,
temporary or provisional, who is not 60 years old; household helper; employee of
foreign government or organization based in the Philippines which entered into
an administrative agreement with SSS; public utility driver and operator; self-
employed; farmer, fisherman or worker in the informal market; OFWs; non-
working spouses of SSS members; and separated members. The corporation
provides, once proven qualified, a daily cash allowance which is paid for the
number of days a member is unable to work due to sickness or injury; a daily
cash allowance granted to a female member who is unable to work due to
childbirth or miscarriage; a cash benefit granted either as a monthly pension or a
lump sum amount to a member who becomes permanently disabled, either
partially or totally; a cash benefit granted either as a monthly or a lump sum
amount to the beneficiaries of a deceased member; and a funeral grant is given
to whoever paid for the burial expenses of the deceased member.
Moreover, SSS also provides loan programs such as Salary Loan which is
granted to an employed, currently paying, self-employed or voluntary member to
meet the members short-term merit credit needs; financial assistance to enable
SSS members and their dependents to defray enrolment costs for college,
vocational, and technical courses; and lending programs established to provide
funds thru SSS accredited participating financial institutions (PFIs), development
of facilities and establishment of institutions that caters quality education or other
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academic training program and affordable medical or health care related services
to the general population and to SSS members and their dependents; support for
business enterprises and industries for the purpose of increasing productivity and
enhancing potential earnings through expansions, diversification and other
business development projects, and assistance and empowerment of the micro,
small and medium enterprises (MSMEs) in the country.
B. Situation Analysis
The Social Security System is expected only to operate at its profitable
situation in twenty years from now, and until then, the corporation can no longer
sustain and provides security. This notion was formulated due to the problems
that corporation is trying to cope up with. One of factor that contributes to this
problem is the delinquency of the members, specifically the employer, in
remitting the contributions of their employees. There are so many cases wherein
there are companies which are not remitting their contributions properly and
regularly. Employees, who are victims of this non-remittance and compliance of
their employer with regards to proper contributions, suffers at the end of the day
for they (employees) expect that after the long years of hardworking, they would
get enough benefits from SSS such as pension, but the problem is their
employers are not paying their contributions.
The delinquency of employers in paying the contributions of their
employees is the main factor that leads to the notion of the SSS incapability of
sustaining their operations and provide security. The SSS serves as a large
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insurance company in the economy among the private entities, informal sectors,
laborers, farmers, fishermen, household helpers and OWFs. Having this present
status of SSS would affects the nation as a whole especially with regards to
economic growth since it plays a vital role in the nation in providing services to
the private sectors and informal sectors of the economy such as corporate loans,
housing loans, educational loans, financial assistance and the like, to mention a
few.
C. Problem Statement
This study aims to address the problem of the Social Security System with
regards to the non-remittances of the employers of their employees SSS
contributions, especially those agencies in line with manpower services such as
security guards, construction workers and the like.
Non-remittances of the employers usually happen in the outsourcing
company or agency wherein these companies are reported by their employee for
not remitting the percentage that is being deducted from the employees salary.
This is usually happening in the employees who are engaged in the construction,
security and janitorial services since these employees doesnt have further
knowledge regarding on the membership of SSS. There are even employees of
this services who doesnt claim anymore of the benefits they are entitled to
because they are not aware that they are earning such benefits from the day they
started to work in certain company or agency. Aside from that, the information
regarding the SSS membership is not well disseminated to all the members. It
only appears to most of the employees as a mere requirement for applying a job
5

in the private sector but not as an insurance or a social security that is being
provided by the state. Apparently, it is the main reason also why they are
vulnerable to the delinquency of the employers in paying their contributions. In
this case, the unclaimed benefits and all the contributions of the members remain
in the SSS and were use to allot to another operations such as to supporting
orphanage.
This problem could be detrimental on one side but could also be beneficial
on the other side. But we have to be reminded that the sacrifices and efforts of
the members in their years of hardworking to earn those benefits should not be
set aside. In the first place, they worked for it and they are therefore entitled to
those benefits. Perhaps, we just need these employers, employees, and all other
members to pay their contributions properly in order to supports all the
operations of the corporation.
D. Stakeholders Analysis
In addressing this problem, there must be coordination between the SSS
and its members especially the employers. The SSS shall formulate a policy
regarding on the delinquency of the employers or non-remittance of contributions
of their respective employee. This policy shall be mandated to be observed by all
the employers that took administrative agreement with the SSS for effective
implementation and a penalty shall be given to those employers in violation of
such. The members will be likewise given a proper orientation regarding SSS
membership especially on the benefits or lending program they may be qualified
to.
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E. Goals and Objectives
This paper, at the end of the day, aims, firstly, to let the employees
especially those who are engaged in construction, janitorial and security services
to be informed about the SSS and its program; secondly, to let the employers be
responsible enough in promoting the social security of their employees by
remitting their employees contribution with all fairness and justness; and lastly,
to promote a quality social security service that is being provided by the SSS.
F. Methodology
The researcher conducted an inquiry to the SSS - OPSD and an interview
with an employee in Operations Legal Department in order to know the main
function of the corporation, relevance in the economy, performance, and the
issues and problem that the corporation is currently facing.
The inquiry was conducted on January 27, 2014 by means of a formal
letter addressed to Ms. Helen Abolencia, the Officer-In-Charge in SSS - OPSD
at Diliman, Quezon City, having the following information being requested to be
disclosed for academic purposes: the SSS legal framework; organizational
structure; function of the major offices; and the performance of the corporation.
The researcher received those pertinent data after one week upon the approval
the of the request letter.
The interview was likewise conducted on January 27, 2014 having Sir
Vernie Forteza, a legal Assistant 4 in the Operations Legal Department, as the
7

respondent. A form of survey questionnaire was given to the respondent having
series of questions regarding on the operations and performance of the SSS.
















8





CHAPTER II
ALTERNATIVE COURSES OF ACTION

A. Alternative Courses of Action (ACA)
In order to avoid the delinquency of the employers, especially those who
are engaged in the construction, janitorial and security services, in remitting the
contributions of their employees, the following courses of action are being
proposed:
ACA 1: SSS Resolution mandating all the employers and private companies to
conduct an SSS membership orientation to all of their employees.
This program shall be done quarterly in order to disseminate the
information very well to all the employees regarding the SSS membership, its
program and the benefits they could claim from it. There shall be a resource
speaker coming from the SSS who shall give further knowledge and facilitate the
information dissemination in a way that is appropriate to the level of thinking or
analysis of the audience. The resource speaker shall also be responsible in
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answering the questions that will be raised by the audience during and even after
the orientation proper. A counter penalty shall be given to any employer or
company that will not conduct such orientation and adheres to the policy set by
the corporation. The penalty will be in the form of deprival of the privileges on
certain program being offered by the SSS such as lending or loan program. The
violating employer or company shall also be administratively liable for such
offense. This may lead to suspension of officers of the employer or company or
restraining the company itself to operate.
ACA 2: A definite program of SSS conducting an SSS orientation caravan to all
the big colleges and universities in the country.
This program shall be regularly conducted every semester in partnership
with the concern colleges and universities. This program shall be participated by
all the graduating students or the seniors in order to give them prior knowledge
even before being employed to certain private companies or whenever they
planned to operate their own businesses. This shall be a memorandum of
agreement between the SSS and the participating Colleges and Universities for
the effective facilitation of this program.
ACA 3: Integrated Orientation Program to all the applicants of SSS membership.
This program will be implemented during the process of membership
wherein the applicants will be given a proper orientation regarding the function of
the SSS, the programs it offers, the benefits that the members could claim and
the ways or steps on how the members could monitor or checks if their
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contributions are being paid regularly by their employers and so with how should
they file a petition against their employer. The orientation shall be made effective
and efficient to the applicant so that proper information dissemination shall be
done. All the applicants who undergo the said orientation will be given a
certificate of attendance which will serve as a primary requirement in the
issuance of the SSS number. There shall be also a basic written and oral
examination in order to qualify the applicants of the privilege of being an SSS
member. Failure of such examination would deprive them of having an SSS
number.
B. Analysis of the Courses of Action
ACA 1 will mandate the employers and the company to be responsible
enough in protecting the social security of their employees. This policy, on the
other hand, is vulnerable to improper monitoring since there are so many
companies and employers registered in the Securities and Exchange
Commission.
ACA 2 will be a preparation to all the graduating students and could help
the future employees in the private sectors or future businessmen to be
responsible enough and to be well informed about the SSS membership. On the
contrary, this action could be selective and is not intended for the benefit of many
since not all the SSS members are even College graduates such as those
employed in the outsourcing agencies or companies like janitors, security guards
11

and construction workers. Another point, this policy could be hardly implemented
well since we have so many colleges and universities in the country.
ACA 3 would be effective since it will filter all the members and give them
the knowledge about all the important information they have to learn from the
SSS which will be given prior to the issuance of their SSS number. This would
assure that the member would not be ignorant of the possible benefits they could
claim from the SSS and making them safe from fraud that could be initiated by
their employers. The burden of this policy is having an additional process and
making it hard for the applicants to have an easy or immediate access to SSS
membership.
C. The Chosen Course of Action
Among the three Alternative Courses of Action, ACA 3 is chosen by the
researcher on the basis of applicability, efficiency and practicability.
The said ACA will be implemented to all the SSS branches serving an
SSS number. There shall be a specific function in the SSS organization that will
serve for that purpose and a venue such as a room where the orientation will
took place shall be likewise provided. The orientation shall be done in a group of
applicants in order to maximize time and effort in both part of the applicants and
SSS personnel. The orientation shall be made simple and friendly to the
audience in order to facilitate the information dissemination properly. The
orientation shall take two to three hours only to avoid too much consumption of
time and for the SSS personnel to make use of the simplest approach.
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D. Challenges and Solutions
CHALLENGES SOLUTIONS
Proper implementation Specific function shall be made for that
purpose
Longer processing of membership Simplest approach shall be used in the
facilitation of the orientation
Criticism regarding on being restrictive of
the SSS
Giving them enough knowledge on the
importance of having further knowledge
regarding SSS membership and
demonstrating also the risks of being
ignorant to such program.










13





CHAPTER III
REFLECTIONS AND LESSONS LEARNED

A. Summary and Conclusion of the Central Knowledge Gained from the
Study
This study as a whole tackles the very important aspect of good
governance which is the information dissemination. It emphasizes how the power
of information could affect your life such as your social security and how
ignorance could risk your own sake form the abusive and powerful sector of the
economy. Meanwhile, the researcher also learned about the importance of SSS
to ones life and the benefits that a member could avail of. As a whole, the
researcher, as a student of Public Administration and Governance, learned not
just to criticize the policies or programs of the government but rather to dig
deeper and analyse it well before creating a scholastic criticism followed by
counter policies or programs proposing an alternative courses of action that
could be considered out of further studies that have been made.
14

REFERENCES

R.A. 8282 or the Social Security Act of 1997
SSS Annual Report 2012
SSS pamphlets published by Corporate Communications Department
www.sss.gov.ph











15

APPENDICES

Appendix A: Student Profile
REHOM PAAS PIMENTEL
4882-B Guadal Canal St., Brgy. 597, Zone 59, Sta. Mesa, Manila
+639.917.353.0577/+63.912.237.0877
rehomp@yahoo.com




Objective
To gain an extra training and experience in the field of public service and apply
my knowledge and learning from the discipline of Public Administration.

Qualifications
Capable of communicating/writing effectively using English language
Computer-literate performer
Personnel Administration
Leadership and decision making
Policy making
Service-oriented
Basic Military Training

Personal Information
Age: 19 years old
Gender: Male
Height: 56
Civil Status: Single
Date of Birth: November 24, 1993
Place of Birth: Sablayan, Occidental Mindoro
Language/Dialect: Tagalog, Ilocano, English
Fathers Name: Dioscoro M. Pimentel
Mothers Name: Elvie P. Pimentel

16

Education
2010 Present Polytechnic University of the Philippines
Sta. Mesa, Manila
Bachelor of Public Administration and Governance
2006 2010 Sablayan National Comprehensive High School
Sablayan, Occidental Mindoro
Special Science Class
Third Honourable Mention
Leadership Award
Outstanding Student Award
2000 2006 Yapang Elementary School
Sablayan, Occidental Mindoro
Salutatorian

Trainings and Seminars
2012 Summer Debate Challenge
Polytechnic University of the Philippines
Sta. Mesa, Manila
2012 IMPEACHMENT: The Truth behind the Lies
Communication Foundation for Asia
Sta. Mesa, Manila
2012 The FOI: A step towards genuine Transparency and Accountability
UP National College of Public Administration and Governance
Diliman, Quezon City
2012 Philippine-China Territorial and Maritime Disputes
GT Toyota Asian Culture Center
Diliman, Quezon City
2012 VAT ganun? Bakit ako may Tax?
A nationwide caravan on tax reform towards nation building
Bulwagang Balagtas, PUP Manila
2012 Social Dialogue with Senator Trillanes
Claro M. Recto Hall
North Wing, PUP Manila
2013 The RUNDOWN 2013
A youth-oriented senate election forum
GT Toyota Auditorium, UP Diliman
2013 National Paper Conference on Public Administration
17

Investing in Philippine Progress through Effective Public Administration
Bulwagang Balagtas, PUP Manila
2013 Symposium: Head of the State
Claro M. Recto Hall
North Wing, PUP Manila
2013 Epal I-kick: Ousting the Trapos para Problemay Tapos
Ninoy Aquino Library and Learning Resource Center (NALLRC)
Bulwagang Balagtas, PUP Manila
2013 Reforms on Education
Ninoy Aquino Library and Learning Resource Center (NALLRC)
Bulwagang Balagtas, PUP Manila
2013 Voters Education
Ninoy Aquino Library and Learning Resource Center (NALLRC)
Bulwagang Balagtas, PUP Manila
2013 KABALANGAY 2013
A youth-oriented forum on politics in Sanguniang Kabataan
Bulwagang Balagtas, PUP Manila
2013 PORK ANATOMY
A meaty discourse dissecting Priority Development Assistance Fund
PUP Theatre, College of Communication
2013 WALANG KU-CORRUPT
A symposium on the Philippine Anti-Graft and Corrupt Practices Act
Amaia Hotel, Sta. Mesa, Manila
Work Experience
2013 National Bureau of Investigation (NBI), Personnel Division
On the Job Training
Taft Avenue, Manila

Affiliations
2012 Reserved Force, Philippine Army
Private First Class (ML-R12-003082)
Hqs 1304
th
CDC, NCRRCDG, ARESCOM, 4
th
Floor, City Hall, Manila
2013 Circle of Public Administration and Governance Student (CPAGS)
Vice-President for Internal Affairs
PUP, Manila

18

Character References
Name: MR. ROLAND SISON
Occupation: Supervisor
Company: Maxs Restaurant
Contact Number: +63.928.237.2130

Name: PROF. ANTONIUS C. UMALI
Occupation: Chief, Center for Public Administration and Governance
Company: Polytechnic University of the Philippines
Contact Number: +63.917.754.0638

Name: MS. REMEDIOS DELA CRUZ
Occupation: Administrative Officer
Company: National Bureau of Investigation, Personnel Division
Contact Number: +63.917.475.6372




I hereby certify that the above stated information is true and correct to the best of my
knowledge and abilities.



REHOM P. PIMENTEL
Applicants Signature





19

Appendix B: Letter Request
January 27, 2014

MS. HELEN L. ABOLENCIA
Officer-In-Charge, OPSD
Social Security System, Diliman, Quezon City

Dear Maam:

Greetings of political excellence and good governance!
I am a fourth year student of Bachelor in Public Administration and Governance of
Polytechnic University of the Philippines Manila and a current student trainee in Social Security
System Main Office under the Operations Legal Department
In this regard, we are required in this course to submit an OJT report in partial
requirement for the fulfilment of our Internship subject. The OJT report to be presented will
constitute the following information from the SSS:
a. the legal framework;
b. the organizational structure;
c. the function of the major offices; and
d. the performance of the corporation.
The following information are provided in the SSS website and library except the
organizational structure and the function of the major offices which could only be accessed
from your department.
I am therefore submitting my formal request to allow me to get a copy of the said
documents for academic purpose.
I am hoping for your favourable consideration. Thank you!

Very truly yours,

REHOM P. PIMENTEL

Noted by:

DR. SANJAY P. CLAUDIO
Dean, CPSPA

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Appendix C: Survey Questionnaire
Name of Interviewee: Vernie Forteza
Position: Legal Assistant II
Department: Operations Legal Department
Interviewer: Rehom P. Pimentel
1. What is the contribution of the corporation to the national economy?
SSS does not only provide security to all private employees and employer including
those self employed but also provide services to other companies or businesses such as loans,
capitals and shares. Having said that, SSS does really contribute to the stability of economy
especially with regards to support to all private companies.
2. Is the objective of the corporation be realized in a scale of 10 with regards to performance?
Yes. 10. As it is reflected in their annual report showing their excellent performance
having an income of P36.2B as of 2012 which has 42% increased from P25.5B as of 2011.
3. Is the corporation subsidize by the national government or does it generates its own income?
How much? Is it enough? If not, How does the corporation make ways in order to cover up the
deficiency.
No. The corporation is not subsidize because it has its own income generating programs
and projects such as investment, loans and share holder of big companies such as San Miguel
Corporations and the like.
4. Is this corporation earning?
Yes.
5. Is the corporation getting external support like donations, etc? From what entities
No. The SSS do not get external support. It is rather the SSS who give support to some
NGOs, other agencies like DSWD. (Support to Yolanda Victims)
6. Do you think your corporation should be privatized?
No, because once the corporation is privatized, there is no more assurance that it is
already safe from bankruptcy. When the corporation was bankrupt, all employees, employers,
self-employed will be directly affected; hence, there is no more security that can be provided by
the corporation.
7. Do you agree that the government should retain only those agency or corporation performing
well?
Yes.
8. What is the agency supervising your performance?
Governance Commission for GOCCs
9. What is your program, policy or plan in order to improve the performance of the corporation?
Investment and incentives provided to all employees.
10. What are the issues and problems of the corporation?
Non-remittance of contributions of the Agencies or employers especially those in line
with manpower services such as security guards, construction workers, janitors, and the like.