SSS and OWWA

It is about two months ago when I read from the papers of the administration’s plan to make the SSS coverage for overseas Filipino workers mandatory. I thought then that probably this again is one of those ideas which the administration would usually float to test the waters, so to speak. They did it very recently when they floated the idea of using the OWWA funds to rescue the ailing Philippine Postal Savings bank, in the guise of converting it into an OFW bank. When on the first instance they got a flood of negative reactions both from OFW communities and migrant organizations, the idea, seemingly, was shelved.

But I think the GMA think tank is adopting a new strategy.

A few days ago, I was told that representatives from government agencies, including the SSS, were in Hong Kong selling the idea of a mandatory SSS coverage among the overseas Filipinos there. As expected, the GMA technocrats met a lot of objections from their target audience. That was no surprise at all, and the government officials who went there should have known that well in advance.

The argument of those who favor this proposal is that majority of overseas Filipino workers do not have a retirement or pension fund to look up to as a source of additional income when they finally go back home for good. This is true especially for those who are under domestic employ, or those whose contracts are for short period of time and are non-renewable, like those deployed in Taiwan.

Those who oppose the idea argue that there are some host countries that already require mandatory provision of retirement benefits. They point out that Saudi Arabia’s labor law, for example, already require companies to provide for their employees end of service benefits, which an employee can avail of after serving a company for at least two years. And for most, that is on top of medical insurance.

From where I sit here at Pitstop, I believe what the government should do is to make each departing overseas Filipino worker be aware of the savings and retirement vehicles available for him to choose from. One of the options of course is through membership in SSS, another is membership with Pag-Ibig Fund, and other options are buying one’s own retirement insurance or pension plan, or simply adopting a personal savings program.

Speaking of savings, retirement and insurance brings to mind the outstanding clamor from various OFW groups for an increase in OWWA benefits. Perhaps this is the right time to look again closely on the merits of those suggestions.

It is a known fact that with the implementation of the OWWA Omnibus Policies in September 2003, OWWA has become a subscriber-based institution catering primarily to the life and disability insurance and loan guarantee needs of its captive clients – the overseas Filipino workers. The insurance premium is USD 25 or Php 1,300 for two years coverage. Just like any term insurance, the insured, in this case the OFW, loses the benefits stated in his insurance policy when he fails to pay the renewal premium when the expiry date is reached.

It is this term-based characteristic of the OWWA membership that OFW complain about. While the annual premium of Php 650 is not really that expensive for a Php 100,000 life insurance (double in case of accidental death) plus other benefits, or compared to the Php 900 annual premium charged by PhilHealth, many OFW wants OWWA to provide them benefits which they can avail of even after retiring as an OFW. At present many OFW complain that they have to die or be incapacitated first before they could benefit from OWWA.

If the real reason why government is pushing for the mandatory SSS coverage of OFW is to provide them with a vehicle for their savings and retirement plan needs, why not just expand the services of and benefits from OWWA to cover what are supposedly to be provided for by SSS? This will not only be in consonance with what have long been suggested by many OFWs, but will also limit the number of agencies OFWs will have to transact with.

A savings program, a retirement plan, and a medical and life insurance roll up into one package will surely be more attractive to OFWs even if the annual or monthly contributions is increased a bit.