Provident Fund

 is a form of social safety net into which workers must contribute a portion of their
salaries and employers must contribute on behalf of their workers. The money in
the fund is then paid out to retirees, or in some cases to the disabled who cannot
work.

 It is very important tool for retirement planning.

Special Occasions – EPF at Help:

 There are special occasions in your family or some emergency arises. In case of
need of funds and no recourse, EPF comes handy as it gives option to withdraw
from the corpus but within a certain limit and by meeting some specified conditions.

1. Goals- Marriage, Education need for self, child or any sibling

2. Your Dream House

3. Medical Emergency

 All Provident Funds for loaning operations and for other purposes beneficial
to all members which are funded out of service fees collected by government
agencies, and which establishment are authorized pursuant to the pertinent
general provision in the annual General Appropriations Act, subject to the
rules and regulations prescribed under Administrative Order No. 279 dated
May 5, 1992.

Fund Sources

The following shall be the sources of the agency Provident Fund:

Employee Contributions

The principal fund source for the agency Provident Fund shall be the
members' regular monetary contributions at rates to be determined by the
Board of Trustees.
Membership in the Provident Fund shall constitute the authority to deduct
from the payroll the member's contribution.

Employer Contributions

 The initial employer/agency counterpart contribution shalt be in the

fond of support for reasonable operating requirements in the
administration and operation of the Provident Fund such as the
following:
 part-time assignment of existing personnel; and

 Use of necessary agency facilities and equipment.

 As manifestation of support for the promotion of the welfare of its
employees, government monetary contributions sourced from savings may
be authorized in the future when the government's financial position may
allow, subject to the guidelines that will be issued by the Department of
Budget and Management (DBM). For GOCCs, the government monetary
contribution shall be subject further to an evaluation by the DBM of the
financial position of each GOCC.

Other Fund Sources

The following other fund sources may be tapped, subject to the approval of the
Board of Trustees:

 earnings of the Provident Fund to include interests on loans, dividends and other
increments or returns from investments such as income-generating ventures;
membership fees;
 gifts;
 donations in cash or in kind;
 proceeds from fund-raising activities;
 amounts arising from withdrawal of membership; and
 Such other fund sources as the Board of Trustees may hereafter identify as legal,
valid and authorized fund sources, such as the various funding facilities now
available in government financial institutions.

Suspension of Employee Contributions

Employee contributions shall be suspended under the following instances:

 When a member is on leave of absence without pay;

 When a member is under preventive suspension during the
pendency of an administrative case filed against him/her; or
 When a member is penalized with suspension from the service as a
result of an administrative case filed against him/her,
 A member may resume his/her contribution to the Provident Fund
upon resumption of his/her duties and responsibilities in the
agency, subject to the rules and regulations approved by the Board
of Trustees.

Benefits

The Provident Fund may be utilized to extend loans or credits to its qualified
members for income-generating projects or livelihood activities as may be
approved by the Board of Trustees.
Dividends arising from the operations of the Provident Fund shall be
determined and approved by its Board of Trustees based on realized earnings
from operations and investments of the Provident Fund for each year, after
deducting a percentage from said earnings for a General Reserve Fund. Such
dividends shall be credited to Provident Fund members, subject to Provident
Fund rules and regulations.

When a member retires from government service, his/her contributions shall

be refunded, including his/her employer's share, if any, as well as the
corresponding proportionate earnings accruing to the Provident Fund, less
any claim that an agency and its Provident Fund may have against him/her.

In case of separation of a member for cause, he/she shall be entitled only to

his/her personal contributions and the earnings thereon, after deduction of any
claim that the Provident Fund and the agency may have against him/her.

In the event of a member's separation from the service due to total and
permanent disability, he/she shall be entitled to refund of all of his/her
personal contributions and his/her employer's share plus earnings thereon,
less any claim that the Provident Fund and the agency may have against
him/her.

In case of death of a member, his/her duly designated beneficiaries or a duly

appointed executor or administrator of the estate of a deceased shall be paid
all of a deceased's personal contributions and employer's share, plus
earnings thereon, less any claim that the Provident Fund and the agency may
have against him/her.

All Provident Fund benefits including but not limited to the employee and
employer shams and share on the General Reserve Fund whichever
remained unclaimed or uncollected for a period prescribed by the Board of
Trustees from the date they become due to a seceding member shall be
considered as waived or abandoned in favor of the Provident Fund.

Depending on the viability of the Provident Fund, the Board of Trustees

may approve such other benefits for Provident Fund members, subject to
the approval of the majority of the members.

Consistent with the principles of fair remuneration and equity, all officers and
employees of the agency should have guaranteed access to the Provident
Fund and should have the same rights and privileges under said Fund. There
 should be no special rules to benefit executives or a select group of
employees.

Loans and Their Security

 The allocation of funds for loaning purposes, the setting of interest rates on
loans and surcharges for unpaid monthly amortizations, as well as the
adoption of an operations manual on availment of loans from the Provident
Fund shall be subject to approval by the Board of Trustees.

 The grant of loans to members of the Provident Fund shall follow an order of
priority, based on a first-come-first-serve basis, and priority to those with lower
salaries.

 Loan amortizations shall be through salary deduction or payment scheme

from the income-generating project or livelihood activities.

 To further secure the payment of a loan, a member-borrower shall assign to

and authorize the Provident Fund to set off, collect or withhold an amount
corresponding to the outstanding obligation/s, inclusive of interest due,
from any pecuniary benefits in the form of bonuses, allowances, gratuity
pay, vacation leave credits and other benefits from the agency and from
Provident fund.

Collection of Loan Payments

 The collection of loan payments by the agency's payroll unit shall be

through salary deduction.
 Deposit of Funds

 Provident Funds shall be deposited in duly authorized government

depository banks.

Investments

 The portion of the Provident Fund which remains unutilized may be

invested, subject to approval of the Board of Trustees.
 Such investments may be in the form of interest-earning deposits, high
grade securities, treasury bills, and other non-speculative investments,
provided that the earnings derived from investments shall be distributed to
Provident Fund members.

Earnings of the Provident Fund

 Earnings of the Provident Fund shall include all interests, dividends, and
income from investments, deposits and other assets of the Provident Fund.

 At the beginning of each fiscal year the earnings realized from the
operations of the Provident Fund in the previous fiscal year ending
December 31 shall be credited to the members in proportion to their equity
as of the preceding year just ended after deducting the amount to be set
aside for the General Reserve Fund.

General Reserve Fund

 The General Reserve Fund shall be established out of a maximum of 5%

or a minimum of 3% of the annual earnings of the Provident Fund as
approved by the Board of Trustees, to cover the following:

 to grant employee benefits chargeable against the General Reserve Fund

(e.g., death benefits);
 to serve as allowance for unsuccessful collection of outstanding loan balance of
a member in case of death or permanent disability after exhausting all possible
means of collection; and
 such other purposes as approved by the Board of Trustees/general
membership.

Penalties

 The Board of Trustees shall ensure that the members of the Provident
Fund shall have strong legal protections with government enforcement
capabilities against the loss of Provident Fund assets. The Board of
Trustees, therefore, shall set the penalties for delinquent payment of
contributions and/or accounts, violations against the Provident Fund's by-
laws, rules and regulations, fraud, theft or fiduciary mismanagement.

 Such penalties shall be meted without prejudice to the filing of an

administrative case against a member due to violations of Civil Service
laws, rules and regulations.

Limitations on Payment

 The Provident Fund shall have first lien on all amounts standing to the credit
of any member to cover any debt or accountability which a member may
have with the Provident Fund, in like manner, an agency shall have second
lien on a member's savings in the Provident Fund.