Philippine Social Security System and the Korea National Pension System
The Katipunan ng mga Samahan ng Migranteng Manggagawa sa Korea or KASAMMAKO together with Filipino Employment Permit System (EPS) Workers Association (FEWA) and other Filipino organizations in South Korea opposed the eventual approval of the Philippine Senate of the Social Security System (SSS) and National Pension System (NPS) Security Agreement. The Philippine Senate’s approval of the SSS-NPS Security Agreement will terminate the payment of lump sum refund of contributions of migrant workers to NPS immediately after their three or five years employment in South Korea.
The guide to South Korea’s National Pension for Foreigners has the provision on lump-sum refund to wit:
In principle, a lump-sum refund is not paid to foreigners, however, in the case of foreigners falling under any of the following items, when they leave Korea, reach the age of 60, a lump-sum refund equivalent to the amount of contributions paid plus the fixed interest is paid to them, or to their survivors if they should die.
- A foreigner whose home country has concluded a social security agreement with Korea to secure benefit rights by combining the insured period in each country.
- A foreigner whose country grants Korean a benefit corresponding to a lump-sum refund.
- A foreign worker whose visa falls under E8 (Employment for Training), E9 (Employment Permit System or non-professional employment), or H2 (Visiting employment).
With NPS-SSS Security Agreement between the government of South Korea and the Philippines, provision number 1 applies. This means that Filipino migrant workers can no longer avail of the lump-sum refund of their contributions to the NPS when their contract ends after three or five years. Their NPS contributions will be combined with their SSS contribution and if they are members of SSS they will benefit from it when they retire either at the age of 60 (optional) or 65 (mandatory); if they are not, their contributions are forfeited in favor of the government of South Korea.
Without the NPS-SSS Security Agreement provision number 3 applies. This is the present principle that applies to Filipino migrant workers whose visa falls under E8 and E9. Migrant workers whether members of SSS or GSIS or not can apply for lump-sum refund of their contributions to the NPS a month before their three or five-year contract ends.
KASAMMAKO believes that NPS-SSS Security Agreement is impractical for OFWs in South Korea because not all migrant workers are members of SSS, and if they are members of SSS and would want to have an uninterrupted contribution to ensure that they receive pension at their retirement, they can still continue paying their monthly contributions through their family members who are left in the Philippines.
Furthermore KASAMMAKO believes that the Filipino migrant workers in South Korea deserve to personally receive their lump-sum refund of NPS contributions and not through bureaucratic arrangements. The Philippine Senate approval of the NPS-SSS Security Agreement is a disservice to the migrant workers because it will forfeit the benefits that are due to them.
KASAMMAKO fears that once the SSS-NPS bilateral security agreement is passed by the Philippine Senate, migrant workers will not get their lump sum refund from NPS and that their contributions remitted to SSS as a result of the equalization scheme will be used for the whims and caprices of corrupt officials of the Philippine government just like what happened to OWWA funds, GSIS and SSS funds. The migrant workers who are the rightful claimants of their pension contributions should get their lump sum refund at the end of their contract.
KASAMMAKO together with FEWA and other migrant workers organizations call on the Philippine Senate to:
- Reject the NPS-SSS Social Security Agreement between South Korea and the Philippines so as to ensure migrant workers the continuing availability of NPS lump-sum refund after their employment period.
- Protect migrant workers’ human and constitutional rights especially the right to be consulted with matters that directly affect them and the access to public information.
- Ensure better livelihood for all Filipinos in their home country and avert forced migration due to unemployment, poverty and hopelessness.