PROVIDENT SAVINGS PROGRAM
PURPOSE:
The program fulfills one part of the Pag-IBIG Fund's twin mandate, which is the generation of savings and the provision of affordable housing finance.
The Provident Savings Program is an easy, fast and affordable savings system for the Filipino workers.
FEATURES OF THE SAVINGS PROGRAM:
- Double or triple your money
Members who are earning P1,500 or below contribute 1% of their monthly basic pay, while those who are earning more than P1,500 contribute 2% of their basic pay. Their employers are mandated to provide a counterpart contribution equivalent to 2% of the employee's monthly basic pay.
- Annual dividend earnings
The members' total contributions and his employer counterpart contributions earn annual dividends, which are credited proportionately to the member's total savings. The dividend rate is equivalent to 70% of the Fund's annual net income.
- Tax-free dividend earnings
All dividend earnings are tax-free.
- Portability of savings
A Pag-IBIG member maintains his/her Pag-IBIG account, with his total accumulated contributions and dividend earnings, regardless if he transfers from the one employer to another, whether from government to the private sector or vise-versa.
- Government-guaranteed savings
Pag-IBIG contributions are safeguarded by a guaranteed government of the Republic of the Philippines.
TOTAL ACCUMULATED VALUE (TAV)
The member's Total Accumulated Value or TAV consists of:
- his accumulated personal contributions
- his total employer's counterpart contributions (if applicable)
- dividend earnings credited to the member's account
RATE OF CONTRIBUTIONS:
- One Percent (1%) of member's monthly compensation, for employees earning not more than P1,500.00 per month
- Two Percent (2%) of member's monthly compensation, for employees earning more than P1,500.00 per month
- Employer's are required to provide 2% counterpart contributions to their qualified employees
For purposes of computing Pag-IBIG contributions, maximum monthly compensation is pegged at not more than P5,000.00. A member has the option to contribute more than the required amount. His employer however, is not required by law to match the increased monthly contributions, and is mandated to contribute only up to 2% of the P5,000 salary ceiling. Again, the employer has the option to match the higher monthly contribution should he desire.
GROUNDS FOR WITHDRAWAL OF SAVINGS
- Membership maturity
- Active membership for 20 years i.e., after 240 monthly contributions
- For members registered under RA 7742 (implemented on January 1995) partial withdrawal of savings is allowed after 10 or 15 years of continuous membership, provided the member has no outstanding housing loan.
- Retirement
- Age 45 (Early retirement)
- Age 60 (Optional retirement)
- Age 65 (Mandatory retirement)
- Permanent Departure from the Country
- Permanent /Total Disability
- Insanity
- Termination from service due to health reasons
- Upon death of the member
The legal heirs of the deceased member shall receive the provident benefits of the member. They shall also receive an additional Death Benefit Grant equivalent to the member's Total Accumulated Value or P6,000.00, whichever is lower.
