The National Institute of Social Security - created in 2016 (Decree-Law n. 47/2016, of 14 December 2016), is the central management and execution body of the entire social security system and the entire associated process cycle, including customer service, data registration (registrations, benefits and contributory careers), management of physical and financial resources, collection of contributions, analysis and payment of benefits, regulatory application, preparation, execution, management and budgetary and financial control of the Social Security Budget (OSS), as well as the preparation of studies and technical proposals. The INSS is thus responsible for managing and implementing the entire Social Security System, with the exception of managing the reserve fund, and ensuring relations with taxpayers, beneficiaries and the general public. 

The INSS is therefore the institution responsible for the management and implementation of three of the four programmes included in the Social Security Plan: "Contributory pay-as-you-go regime"; "Non-contributory regime"; and "Social security administration", including the activities related to the Social Security Reserve Fund, and is responsible for consolidating the Social Security Budget and Account. 
 

In addition to the central services, it is planned that the INSS will have deconcentrated services, operating in the all Municipalities and the Special Administrative Region of Oecusse-Ambeno (RAEOA), with a view to bringing Social Security closer to the citizen.

At the moment, eight deconcentrated services are functioning: 1. Dili (covering the Municipalities of Díli, Ataúro and Manatuto); 2. Ainaro (which covers the Municipalities of Ainaro and Covalima); 3. Manufahi; 4. Baucau (which covers the Municipalities of Baucau and Lautém); 5. Viqueque; 6. Bobonaro; 7. Ermera (which covers the Municipalities of Ermera, Liquiçá and Aileu); and 8. RAEOA
 

The general social security system combines simple pay-as-you-go with the technique of public capitalisation, which consists of the creation of a public capitalisation fund - the Social Security Reserve Fund (FRSS). In this Fund, the annual balances (surplus) between the contributions received annually and the social benefits of the contributory regime paid annually are accumulated and monetized.

These annual balances/surpluses, accumulated and monetized, constitute Social Security reserves.

To manage Social Security reserves and guarantee the future financial sustainability of the Social Security System, The Social Security Reserve Fund was created as an autonomous asset with legal personality, to make it clear that the funds of the Social Security Fund (Social Security reserves) are not confused with the current funds from the Social Security (managed at the INSS) and the State.
 

This FRSS was created in 2016 (Law n. 12/2016, of 14 November - article 63) and effectively constituted and regulated in 2020 (Decree-Law n. 55/2020, of 28 October, amended by Decree-Law n. 33/2021, of 15 December, by Law n. 2/2022, of 10 February, and by Decree-Law no. 34/2022, of 19 May).

The funds accumulated in the FRSS are managed based on the annual investment policy and the reference portfolio (benchmark) prepared and approved by the Government, and in accordance with security, profitability and liquidity criteria, in a prudent manner, promoting diversification of the asset portfolio and minimizing risk.

It is determined by law that the FRSS funds are exclusively allocated to the financial stabilisation and sustainability of the contributory social security regime and cannot be used for other purposes. In other words, the FRSS funds will be used in the future exclusively to pay the social benefits of contributors to the general regime, when the annual revenue from contributions is no longer sufficient to cover the expenses of that year.