Pag-IBIG FundCorporate Headquarters

Petron MegaPlaza358 Sen. Gil Puyat Ave.,

Makati City

Circular No. 342---

TO: ALL CONCERNED

SUBJECT: GUIDELINES ON THE PAG-IBIG FUND MEMBERSHIPTERMINATION

Pursuant to Republic Act No. 9679 and its Implementing Rules and Regulations, theGuidelines on the Pag-IBIG Fund Membership Termination are hereby issued:

A. OBJECTIVES

These guidelines aim to:

1. Provide general guidelines to operationalize Sections 9, 10 & 11, Rule V ofImplementing Rules and Regulations (IRR) of Republic Act (RA) 9679 or theHome Development Mutual Fund (HDMF) Law of 2009.

2. Define the grounds for termination of membership with the Fund; and

3. Prescribe rules relative to the application, processing, approval, and fundreleasing for provident benefit claims of Fund members who qualify formembership termination.

B. COVERAGE

These guidelines shall cover all Pag-IBIG members who are entitled to withdrawtheir Total Accumulated Value (TAV) anytime upon the occurrence of any of thegrounds for termination of Fund membership as provided under RA 9679 or theHDMF Law of 2009, and its IRR.

C. EXCLUSION

The following shall not constitute as grounds for termination of membership:

1. Resignation, lay-off, suspension from employment, or unemployment.

2. The optional withdrawal of savings does not terminate Pag-IBIG Fundmembership. A member who availed of this program shall continue to becomeFund member until such time fhat he becomes eligible to terminate his Fundmembership under the grounds for membership termination.

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D. GROUNDS FOR MEMBERSHIP TERMINATION

Membership with the Fund shall be terminated anytime upon occurrence of any ofthe following grounds, provided the necessary application together with thesupporting documentary requirements have been filed, processed, and approved:

1. Membership Maturity

Eligibility for membership maturity shall be based on twenty (20) years ofmembership with the Fund, reckoned from the initial Pag-IBIG Fund Receipt(PFR) date; provided, the member has remitted a total of two hundred forty (240)monthly savings to the Fund at the time of maturity.

1.1. In case of gaps, the following rules shall apply:

1.1.1. If on the zo" year, a member is found to have gaps in his remittancesof the savings for a maximum cumulative period of two (2) years, heshall be allowed to pay for the same and withdraw his entire savingsincluding that amount corresponding to such gaps.

1.1.2. If on the zo" year, the gaps in remittances exceed the maximumallowed cumulative gaps of two (2) years, the member shall be allowedto withdraw his savings from the Fund already remitted prior to date ofmaturity (up to 20th year) but he shall be required to pay for themembership savings corresponding to the gaps. To withdraw theamount corresponding to the gaps, he shall have to wait for the lapseof such period of time equivalent to the period of the gaps.

2. Retirement

A member shall be compulsorily retired with the Fund upon reaching the age ofsixty-five (65).

2.1 A member may opt to retire earlier under the Fund anytime upon occurrenceof any of the following events, provided the member is not a housing loanborrower:

2.2.1. Actual retirement from the SSS and/or GSIS;

a. SSS Retirement

ApplicableLaw Retirement

R.A. 8282 • Sixty (60) years old and has at least one hundredtwenty (120) SSS monthly contributions

• Sixty-five (65) years old and has at least onehundred twenty (120) SSS monthly contributions

For underground mineworkers:

• Fifty-five (55) years old with at least five (5) yearsin service as underground mine worker and has atleast one hundred twenty (120) SSS monthlycontributions

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b. GSIS Retirement

ApplicableLaws Retirement

RA. 8291 At least fifteen (15) years of service and must be atleast sixty (60) years old upon retirement

RA. 660 • On completion of thirty (30) years of total serviceand attainment of age fifty-seven (57) years.

• In case of those who are at least fifty-seven (57)years of age, a period of service shorter than thirty(30) years may be allowed, provided that each yeardecreases in service shall be compensated by one-half year increase in age over fifty-seven (57)years.

• A younger age of retirement may be permittedprovided that each year decrease below fifty-seven(57) years shall be compensated by one yearincrease in service over thirty (30) years.

• In all cases no one shall be entitled to retirementbenefit if his age is below fifty-two (52) years or histotal service is less than fifteen (15) years.

I Age I 52 I 53 I 54 I 55 I 56 I 57 I 58 I 59 I 60 I 61 I 62 I 63 I 64 I 65 II YOS I 35 I 34 I 33 I 32 I 31 I 30 I 28 I 26 I 24 I 22 I 20 I 18 I 16 I 15 I

RA. 1616 • In government service on or before May 31, 1977;and

• Has rendered at least twenty (20) years of serviceregardless of age

P.O. 1146 • In government service after May 31, 1977 butbefore June 24, 1997

• Sixty (60) years old and has rendered at leastfifteen (15) years of service

2.2.2. Actual retirement from government service by provision of law, as inthe following:

a. Members of the Armed Forces of the Philippines (PO 1650)

• Optional retirement - at least twenty (20) years of activeservice;

• Compulsory retirement - at least thirty (30) years of activeservice or at least fifty-six (56) years old with at least twenty(20) years of active service.

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b. Members of the Philippine National Police (RA 8551), Bureau ofJail Management and Penology, and Bureau of Fire Protection(RA 9263)

• Optional retirement - at least fifty (50) years old and twenty(20) years of active service;

• Compulsory retirement - at least fifty-six (56) years old.

c. Members of the Philippine Coast Guard and Uniformed ServiceAttaches to the Department of Transportation andCommunications (RA 9993)

• Optional retirement - at least twenty (20) years of activeservice;

• Compulsory retirement - at least thirty (30) years of activeservice or at least fifty-six (56) years old with at least twenty(20) years of active service.

d. Members of the Judiciary (RA 9946)

• Optional retirement - at least sixty (60) years old with at leastfifteen (15) years of active service;

• Compulsory retirement - seventy (70) years old.

Retirement must be evidenced by corresponding proofs of retirementof the member issued by his/her employer that he was able to meetthe minimum service requirement and/or age requirement asprescribed under their respective charter.

2.2.3. Retirement under a private employer's provident/retirement plan,provided that the member is at least forty-five (45) years of age at thetime of retirement;

2.2.4. Reaching the age of sixty (60).

3. Permanent Total Disability or Insanity

A member shall terminate his membership with the Fund in case of permanenttotal disability (PTD). PTD refers to the loss or impairment of a physical or mentalfunction resulting from injury or sickness, which incapacitates said member toperform any work or engage in any business or occupation.

The following disabilities shall be deemed total and permanent:

3.1 Temporary total disability lasting continuously for more than one hundredtwenty (120) days;

3.2 Complete loss of sight of both eyes;

3.3 Loss of two limbs at/or over the ankle or wrist;

3.4 Permanent complete paralysis of two (2) limbs;

3.5 Brain injury resulting in incurable insanity; and

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3.6 Such other cases which are adjudged to be total and permanent disabilityby a duly licensed physician and approved by the Fund's Board of Trustees(Board).

4. Termination from Service by Reason of Health

A member can no longer render service to an employer due to severehealth conditions, as certified by his doctor. Severe health conditions constitutean illness, injury, impairment or, physical or mental condition that involves in-patient or out-patient care or a continuing treatment by a health care provider.

5. Permanent Departure from the Country

A member has been permitted by his host country to remain there indefinitely orhas permanently left the Philippines to reside in another country.

6. Death

Death of a member as evidenced by a Death Certificate issued by the NationalStatistics Office (NSO).

7. Any other reasons as may be approved for by the Board.

E. EFFECTS OF MEMBERSHIP TERMINATION

1. The release of the TAV of a housing loan borrower applying for membershiptermination shall be governed by the housing loan guidelines prevailing at thetime of loan takeout.

1.1 For accounts released from 1 March 1999 up to 8 November 2001 (takenout under HDMF Circular Nos. 171 and 178)

In case of membership termination due to membership maturity, permanentdeparture from the country, retirement, PTO, the Fund shall effectautomatic application of the member's TAV to the outstanding housing loanbalance, regardless if the account is updated or in arrears.

1.2 For accounts released from 9 November 2001 to 19 July 2004 (taken outunder HDMF Circular Nos. 189, 189-A, and 189-B)

Upon membership termination on account of membership maturity,permanent departure from the country, retirement, PTO, the Fund shallautomatically apply the member's TAV to his outstanding housing loan,only if the account is in arrears.

1.3 For members with housing loans taken out after 19 July 2004 to present,he shall not be allowed to withdraw his TAV. However, he shall be giventhe following options:

1.3.1 Payoff the outstanding housing loan balance and withdraw hisTAV;

1.3.2 Continue amortizing the loan until it is fully paid, provided that theaccount is updated. The member can withdraw his TAV only uponfull settlement of his loan obligations; or

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1.3.3 Apply the TAV to the outstanding loan balance.

2. If the member applying for membership termination has a short-term loan andother obligations with the Fund, any amount outstanding, including interest andpenalties, shall be deducted from the borrower's TAV and/or any amount due himthat are in the possession of the Fund.

2.1. For membership maturity, retirement, and permanent departure from thecountry, the cut-off date for the computation of loan balances and offsettingof loan obligation, if applicable, shall be the date of approval of theapplication for provident benefit claim.

2.2. For termination due to PTD, termination from service due to health reasonsor borrower's death, the cut-off date for the computation of loan balancesand offsetting of loan obligation, if applicable, shall be at point ofoccurrence of the said grounds.

2.3. In case of membership termination due to PTD, termination from servicedue to health reasons or borrower's death occurred prior to date of TAVoffsetting due to default, the loan balances, interests and penalties shall bere-computed up to the occurrence of the applicable grounds.

2.4. Any remaining TAV after offsetting in cases mentioned in sub sections 2.1and 2.2 above, shall earn dividends up to date of filing of provident benefitclaim.

F. PAYMENT OF BENEFITS

1. Return of Total Accumulated Value

1.1. The TAV to be returned to the member or his legal heirs, less of any and allpending obligations with the Fund, shall consist of the following:

a. The member's remitted accumulated savings;

b. The employer's counterpart savings, if applicable; and

c. Dividend earnings credited to the member's account as declared by theBoard.

1.2. For members with outstanding obligations with the Fund, at the time oftermination of membership, the said obligation shall be deducted from hisTAV prior to the release of the provident claim. Application of member'sTAV shall be according to the following order of priority:

1.2.1. Short Term Loan

a. Penalty, if applicableb. Interest, andc. Principal

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1.2.2. Housing Loan

a. Penalty, if applicableb. Insurance premiums, if anyc. Interest, andd. Principal

1.2.3. Pag-IBIG Loyalty Card Fee

1.3. Release of member's TAV shall be based on actual savings remitted by theemployee and employer (if applicable). In the case of member-claimantswhose employer counterpart savings have not been remitted to the Fund, apartial release of their TAV shall be made based on actual amounts creditedto their accounts. In the same manner, the computation of annual dividendsshall be based on actual remittances made.

Any amount that the Fund may collect (i.e., total unremitted monthly savingsand computed deprived dividends) from the employer due to enforcementshall be subsequently released to the member or his heirs.

1.4. In case of member's death, the release of his provident benefit claims shallbe in accordance with the laws on succession.

1.5. A member who has multiple employers shall be entitled to claim his entiresavings anytime upon occurrence of any of the grounds for membershiptermination.

2. Death Benefit

2.1. Upon the death of a member, his legal heirs shall be entitled to receive theapplicable death benefit in addition to the deceased member's TAV. Theamount of the death benefit shall depend on his membership status with theFund at the time of his death:

2.1.1. For active members at the time of death - P6,OOO,regardless of theamount of TAV.

2.1.2. For inactive members at the time of death - the amount is equivalentto member's TAV or P6,OOO,whichever is lower.

2.1.3. If TAV offsetting occurred prior to the member's death - the amountof death benefit to be granted shall depend on the. membershipstatus as of date of death. In case of inactive status as of date ofdeath, the TAV under consideration shall be the TAV prior tooffsetting.

2.2. Hence, the legal heirs of the deceased member shall still be entitled todeath benefit, subject to the conditions set in Item F subsection 2.1. hereofunder the following circumstances:

2.2.1. The check for provident benefit claims based on the grounds formembership termination other than death is not yet released to themember;

2.2.2. The member's provident benefit claim proceeds are not yet creditedto his disbursement/cash card or Payroll Account at the time of hisdeath.

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3. Manner of Payment

3.1. The provident benefit claim proceeds due to membership termination shallbe paid to the member or his legal heirs through any of the following modes:

3.1.1 Crediting to the claimant's disbursement/cash card or PayrollAccount;

3.1.2 Through check payable to the claimant; or

3.1.3 Other similar modes of payment approved by the Board.

3.2. Claiming of checks through a representative shall be allowed provided therepresentative shall present the documents that the Fund may requirerelative to the provident benefit claim.

H. OTHER PROVISION

If after membership termination a member places himself in a situation that wouldsubject him to mandatory coverage, he shall continue to be mandatorily covered bythe Fund. His employer shall continue to deduct and remit the monthly savingstogether with the corresponding employer's counterpart savings.

I. ADJUDICATION AND SETTLEMENTS OF CLAIMS AND DISPUTES

The Fund shall have original and exclusive jurisdiction over all claims and disputeson any matter relative to the implementation of the provisions of RA 9679 and theseguidelines affecting the rights and interest of the members. The decision of the ChiefExecutive Officer (CEO) of the Fund shall be final and executory, unless appealed tothe Board, after the lapse of thirty (30) days from receipt by the aggrieved party ofsuch decision. The decision of the Board shall, unless appealed to a competentcourt, become final and executory after fifteen (15) days from receipt of suchdecision.

The CEO shall prescribe the forms to be used and the procedures to be followed inthe adjudication and settlement of the aforementioned claims and disputes.

J. AMENDMENTS

These guidelines may be amended, updated, revised or modified by the SeniorManagement Committee in furtherance of the objectives of the program, providedthat the amendments, revisions or modifications herein adopted are consistent withthe mandate of the Fund under its charter and existing laws.

K. REPEALING CLAUSE

Any circular, clarificatory memo, rules, regulations and other issuances inconsistentherewith are hereby repealed, amended or modified accordingly.

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L. EFFECTIVITY

These guidelines shall take effect upon its issuance.

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EM LI !.:.':ARIA

fficer-In-Charge, andDuty Chief Executive Officer -

Support Services Cluster

Makati City,

APR Z ~ 1014

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