A LAWMAKER has filed a bill seeking to create a pension system for overseas Filipino workers (OFWs).
House Bill No. 8574 or the Kabayan OFW Pension Act aims to provide a social security and retirement system for land- and sea-based working Filipinos abroad.
“The establishment of a separate system… provides OFWs with a much-needed safety net, shielding them from the risks associated with their overseas employment,” KABAYAN Party-list Rep. Ron P. Salo said in the bill’s explanatory note.
The proposed system will operate as a government-owned and -controlled corporation.
It will have a board of trustees with the Migrant Workers and Finance secretaries as ex-officio chair and vice chair, respectively. The board will also have representatives from land- and sea-based overseas workers, the manning and recruitment agency sector, and the actuarial or finance industry.
An OFW must be a member of the Social Security System to avail of the system’s benefits. Non-documented OFWs may avail of the coverage on a voluntary basis.
According to the measure, on every last day of the month, the employer will deduct and withhold from the OFW’s monthly salary, wage, compensation or earnings their contribution based on their monthly salary credits, schedule and contribution rate as determined by the board.
Employers will also pay a compulsory contribution.
Member-OFWs may also avail of benefits for maternity leave, repatriation, dependent’s pension and unemployment or involuntary separation benefits,
death, permanent disability, and funeral.
Funds will be sourced from fees charged at Philippine and foreign recruitment agencies as well as the Overseas Employment Certificate of the Department of Migrant Workers (DMW), and net income from the OFW Bank.
It will also tap savings from the Assistance to Nationals fund of the Foreign Affairs department and the DMW’s Aksyon Fund, grants or bequests from donors, and from the national government, which is expected to contribute P100 million as initial capital.
Benefits under the Kabayan OFW pension are separate from other benefits that OFWs receive from the government, Mr. Salo noted.
Cash remittances sent by OFWs stood at $2.48 billion in April, higher than $2.4 billion in the same month in 2022 or up by 3.7% year on year.
The DMW projects that OFW deployment will surpass the 1.2 million recorded in 2022. — Beatriz Marie D. Cruz