FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
10 
JUL 21 
1"5 :40 
,.", 
I , 
Introduced by Senator Miriam Defensor Santiago 
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EXPLANATORY NOTE 
It is lamentable that at present the monthly pension being received by retired government 
personnel is inadequate for a decent life. Worse, the continuing devaluation of the peso helps 
trigger the never.ending increases in the prices of all commodities, including those of life· 
sustaining drugs and medicines for the senior citizens, illness·prone retirees, which have gone 
beyond their reach depriving the pensioners of a decent standard of living and financial security 
they deserve. 
What is even worst is that there is a class of elderly retired government employees under 
the lump sum, take·all gratuity system pursuant to RA 1616 who do not receive at all even a 
meager monthly pension. This class of now elderly former public servants, still numbering in the 
thousands all over the country, are lamentably existing at predominantly near·pauper, if 
miserable, lives surviving only out of the generosity of equally hard·pressed kin, if any. Because 
their meager, hence, ephemeral take·all gratuity received many years back from their respective 
last employers, instead of from the GSIS, under a deviant retirement scheme (RA 1616) - that 
attempted to deviate from the ideally prescribed annuity system of retirement by way of monthly 
Old·Age Pension for Life plus Survivorship Benefits, administered by the GSIS pursuant to the 
circa 193'6 CA 186, as amended by among others RA 660, PD 1146 and RA 8291 ·with its 
tempting allure in the guise. of its "lump sum" delusion, have long been exhausted in catching up 
with the ever· increasing expenses of surviving over all these inflation·ridden years. 
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As a hapless consequence of their being misled in their retirement option, the senior 
citizens-RA 1616 retirees unwittingly forego enjoyment of the monthly Old-Age Pension for 
Life as well as Survivorship Benefits for their survivors, the aggregate residual actuarial reserves 
of which, as established pursuant to Section 24 @) of CA 186, as amended, have accumulated 
into billions of pesos essentially saved by the GSIS. The gargantuan size of such GSIS savings of 
this aggregate residual actuarial reserves could be gleaned from the revelations published 
particularly in paragraphs 20 and 21 of the October 02,2003 Manila newspaper column of Dr. 
Solita Collas-Monsod (entitled "The Wrong Scapegoat") wherein Dr. Monsod quoted Budget 
Secretary Emilia Boncodin revealing for the first time that just between 1999 and 2002, the 
government already paid out P10 billion in lump-sum retirement funds to RA 1616 retirees, 
which means that GSIS essentially saved that amount, even as RA 1616 took effect May 31, 
1957 yet. 
Even while RA 1616 was eventually phased out impliedly by the fourth whereas of PO 
1146 (which took effect on June 01, 1977) the latter remonstrating that "x x x provisions of 
existing laws that have prejudiced rather than benefited government employee: restricted. Rather 
than broadened his benefits; x x x must now yield to his paramount welfare." the senior citizens-
RA 1616 retiree's move to convert his mode of retirement to the ideally-legislated Pension 
system (RA 660, PO 1146 or RA 8291) is still circumscribed by some anachronistic provisions 
of an archaic statute, the circa 1936 CA 186, as amended, the second paragraph of Section 12 (c) 
of which restricts the written request for conversion of mode of retirement from the Gratuity 
System to the Pension System to be made within one year only after retirement, and is 
prejudicial to his welfare because it still requires him to reimburse the retirement gratuity 
received by him many years ago and long spent, as well as to refund the personal and employer's 
premiums as the case may be. 
In order to categorically correct now such restrictive and prejudicial retirement law that 
PO 1146 was already aware of and impliedly phase out 27 years ago as stated in the foregoing, 
and further, in the light of the provisions of Section 4 of PO 1146; as amended by Section 4 of 
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RA 8291 '(Effect of Separation from Service) to the effect that: "A member separated from the 
service shall continue to be a member, and shall entitled to whatever benefits he has qualified to 
in the event of any contingency compensable under this Act." and furthermore, in the light of 
Section 48 ofPD 1146, as amended by Section 55 ofRA 8291 (Exclusiveness of Benefits) to the 
effect that: "x x x However, if the benefits provided by law chosen are less than the benefits 
provided under this Act, the GSIS shall pay the difference" and finally, in consonance with the 
mandate in Section 6 of RA 7432 (Senior Citizens Act) that: "Retirement benefits from x x x the 
government shall be upgraded at par with the current scale enjoyed by those in actual service," 
Approval of this bill is earnestly sought if only to manifest the continuing concern of this 
Congress on the plight of our senior citizens-retirees who have spent the best years of their lives 
in the services of the country,l 
I This bill was originally filed during the Thirteenth Congress, First Regular Session, 
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FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
~ 0 ,JUt?l P 5 :.10 
, 
Introduced by Senator Miriam Defensor Santiago 
~'\"~';!V" D HV '._ .~::...._. 
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AN ACT 
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GRANTING OLD-AGE PENSION FOR LIFE TO SENIOR CITIZENS-RA 1616 RETIREES 
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AS WELL AS SURVIVORSHIP BENEFITS TO THEIR SUVIVORS, AMENDING FOR THE 
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PURPOSE PERTINENT PROVISIONS OF THE SECOND PARAGRAPH OF 
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,SECTION 12(C) OF COMMONWEALTH ACT 186, AS AMENDED 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress" assembled: 
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SECTION 1. Short Title. - This Act shall be known as the "Government Service 
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Retirement Rationalization Act." 
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SECTION 2. Declaration of Policy. - It is declared policy of the State to promote and 
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provide a rising standard of living and an improved quality of life for all. In pursuit of such 
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policy, this Act mandates to grant Old-Age Pension for Life to senior citizens-RA 1616 retirees 
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as well as Survivorship Benefits to their survivors who are otherwise deprived thereof, in order 
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that such pension would be responsive to their increasing needs, considering the eventual phase 
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out impliedly of RA 1616 by the fourth whereas of PD 1146 mandating that "x x x provisions of 
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existing laws that have prejudiced, rather than benefited government employee; restricted rather 
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than broadened his benefits; x x x must now yield to his paramount welfare" as exemplified 
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specifically by the prejudicial and restricted provisions of the second paragraph of Section 12( c) 
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of CA 186, as amended. 
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SECTION 3. Coverage. - This Act shall affect senior citizens-RA 1616 retirees who 
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retired effective 1 June 1977 (effectivity date ofPD 1146) and thereafter. 


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SECTION 4. Change of Mode of Retirement. - Any provision of laws, presidential 
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decrees, letters of instructions, executive orders, rules and regulations to the contrary 
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notwithstanding, in conformity with the intent in Section 48 ofPD 1146, as amended by Section 
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55 RA 8291, the pertinent provisions of the second paragraph of Section 12 (c) of CA 186, as 
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amended, is hereby further amended and modified as follows: 
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"Section 12(c)xxx 
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An employee who RETIRED NOT EARLIER THAN JUNE 01, 1977 
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under this Subsection (e) BUT WHO IS OTHERWISE QUALIFIED TO RETIRE 
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UNDER RA 660 OR PD 1146, SHALL HEREAFTER AUTOMATICALLY 
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HAVE HIS GRATUITY RETIREMENT CONVERTED TO PENSION 
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SYSTEM UNDER RA 660, PD 1146 OR RA 8291, WHICHEVER IS MORE! 
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BENEFICIAL TO HIM, AND THEREAFTER SHALL RECEIVE THE OLD-
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AGE PENSION FOR LIFE AS WELL AS THE SURVTVORS' BENEFITS 
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FOR HIS SURVIVORS PROVIDED UNDER SUCH LAWS: PROVIDED, 
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THAT THE RETIREE/SURVIVORS SHALL NO LONGER BE REQUIRED 
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TO REIMBURSE TO THE GSIS the retirement gratuity previously received by 
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HIJ\!! FROM HIS LAST EMPLOYER as well as the refunds FROM THE GSIS 
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OF the personal and employer's premiums as the case may be; PROVIDED 
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FURTHER THAT IN ORDER FOR THE GSIS TO COMPLY WITH THE 
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LEGAL MANDATE IN THE SECOND SENTENCE OF SECTION 48 OF PD 
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1146, AS AMENDED BY SECTION 55 OF RA 8291, DIRECTING THAT "x x 
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x IF THE BENEFITS PROVIDED UNDER THIS ACT, THE GSIS SHALL 
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PAY THE DIFFERENCE." SUCH PREVIOUSLY RECEIVED AGGREGATE 
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SUM SHALL BE LIQUIDATED IN THE FOLLOWING MANNER: 
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(I) THAT IT SHALL ALREADY BE CONSIDERED AS PARTIAL 
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PAYMENT BY THE GSIS TO THE RETIREE OF HIS FIVE-YEAR 
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GUARANTEED PERIOD OF LUMP SUM PAYMENT OF BASIC MONTHLY 
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PENSION PAYABLE MONTHLY FOR LIFE AS PRESCRIBED PURSUANT 
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TO SECTION 12 (a) OF PD 1146, AS AMENDED BY SECTION 13 (a) (l) OF 
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RA 8291, RECKONED NOT EARLIER THAN AGE 60 OR UPON 
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EFFECTIVITY OF HIS LATER RETIREMENT BUT NOT BEYOND AGE 65; 
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(2) THAT IF SUCH AGGREGATE SUM IS LESS THAN THE TOTAL 
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OF THE FIVE-YEAR GUARANTEED PERIOD OF LUMP SUM PAYMENT 
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OF BASIC MONTHLY PENSION, THE GSIS SHALL PAY IN FULL TO THE 
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RETIREES/SURVIVORS THE DIFFERENCE THEREFOR UPON THE 
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EFFECTIVITY OF THIS ACT, ON TOP OF THE BASIC MONTHLY 
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PENSION PAYABLE MONTHLY FOR LIFE/SURVIVORS' BENEFITS 
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ALREADY ACCRUED AFTER THE EXHAUSTION OF THE FIVE-YEAR 
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GUARANTEED PERIOD RECKONED NOT EARLIER THAN AGE 60 OR 
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UPON EFFECTJVITY OF HIS LATER RETIREMENT BUT NOT BEYOND 
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AGE 65; 
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(3) HOWEVER, IF SUCH AGGREGATE SUM IS IN EXCESS OF THE 
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TOTAL OF THE FIVE-YEAR GUARANTEED PERIOD OF LUMP SUM OF 
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HIS BASIC MONTHLY PENSION, THE EXCESS SHALL FIRST BE 
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APPLIED AS 
PAYMENT OF SUCCEEDING EQUIVALENT BASIC 
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MONTHLY PENSION AFTER THE EXHAUSTION OF THE FIVE-YEAR 
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GUARANTEED PERIOD RECKONED NOT EARLIER THAN AGE 60; OR 
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UPON EFFECTIVITY OF HIS LATER RETIREMENT BUT NOT BEYOND 
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AGE 65; AFTER WHICH THE GSIS SHALL PAY HIM THE BASIC 
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MONTHLy PENSION PAYABLE MONTHLY FOR LIFE/SURVIVORSHP 
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BENEFITS IN THE CASE OF SURVIVORS." 
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SECTION 5. Status of the Converted Senior Citizen-Retiree. -Upon approval of this Act, 
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the status of the converted senior citizen-retiree shall, for all intents and purposes, be the same as 
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though he had originally retired under the annuity Pension System. He shall henceforth be 
2 
accorded all the present and future benefits and privileges accruing a retiree under the annuity 
3 
Pension System. However, if an RA 1616 retiree prefers not to be converted under this Act, then 
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he shall so state in writing to the GSIS. 
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SECTION 6. Funding. - Such sum as may be necessary for the payment of the retirement 
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Isurvivorship benefits under Section 4 of this Act, shall be charged against the accumulated 
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aggregate residual actuarial reserves as established pursuant to Section 24 (b) of CA 186, as 
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amended, that the GSIS essentially saved from not being required to pay the Old-Age Pension 
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for Life as well as the Survivorship Benefits of thousands of RA 1616 retirees whose lump sum 
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gratuity was each paid instead by his last employer effective from the time RA 1616 took effect 
II 
onMay31,1957. 
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SECTION 7. Implementing Guidelines. - The GSIS, in coordination with the Department 
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of Budget a!1d Management, shall issue the necessary guidelines for the implementation of this 
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Act not later than sixty (60) days after the approval hereof. 
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SECTION 8. Separability Clause. - If any provision or part hereof is held invalid or 
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unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
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valid and subsisting. 
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SECTION 9. Repealing Clause. - Any law, presidential decree or issuance, executive 
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order, letter of instruction, administrative order, rule or regulation contrary to, or inconsistent 
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with, the provisions of this Act is hereby repealed, modified or amended accordingly. 
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SECTION 10. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
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publication in at least two (2) newspapers of general circulation. 
Approved. 
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