THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
NOV 22 P I  :2? 
OF THE PHILIPPINES 
) 
Second Regular Session 
1 
S E N A T E  
S. No. 2170 
Introduced by Senator S. R. OsmeAa 111 
EXPLANATORY NOTE 
In 1957, Republic Act 1616 was enacted further amending Commonwealth Act 
186, the old law on government employees' retirement benefits. 
In addition to the 
Old-Age Pension for Life retirement mode, RA 1616 introduced a new mode of paying 
retirement benefits -- Gratuity retirement mode, a one-time payment to be made by 
the last employer of the retiree. 
The Gratuity retirement mode was intended to accommodate younger 
government employees who have not as yet reached the minimum number of years 
of service required for them to qualify for the Old-Age Pension for Life retirement 
mode. However, because of the ambiguous phraseology of RA'1616, instead of it's 
application being restricted to younger employees as intended, government 
employees who were already legally qualified to retire under the Old-Age Pension for 
Life retirement mode were also covered by the said law. 
This ambiguity became 
prejudicial to the latter because they were granted gratuity when they were already 
qualified to receive old-age pension for life. 
While the deleterious provision of RA 1616 was impliedly phased out under 
Presidential Decree 1146, there has been no law enacted categorically repealing the 
subject provision thus causing further inequity. 
' Even with the passage of the new 
law 'on government retirement benefits, Republic Act 8291, the said provision still 
stands. 
the passage of this bill is 
earnestly requested. 
Retirees who were prejudiced u,nder RA 1616 shall be 
compensated by allowing them to convert their mode of retirement to the more 
beneficial Old-Age Pension for Life retirement with survivorship benefits. Funding for 
the implementation of the law is proposed to be generated from a portion of the GSlS 
Residual Actuarial Reserve, part of which accumulated from the payments (and the 
investment earnings thereon) that were saved by the GSlS for not having paid the 
retirees qualified to receive old-age pension for life who were instead paid a measly 
one-time lump sum gratuity by their employers. 
To remedy the above defect of the RA 1616, 
SERGIO OSMENA 111 
Senator 


THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
Second Regular Session 
1 
5 NOV 22 P 1  :23 
S E N A T E  
FZECEWEa BY :.-+&L.- 
s. No. 21-70 
Introduced by Senator S. R. OsmeAa 111 
AN ACT 
GRANTING OLD-AGE PENSION FOR LIFE TO SENIOR CITIZENS WHO RETIRED 
UNDER REPUBLIC ACT 1616 AS WELL AS SURVIVORSHIP BENEFITS ro 
THEIR SURVIVORS 
Be it enacted by the Senate and the House of Representatives of the Republic of the 
Philippines in Congress assembled: 
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Section 1. Declaration of Policy. It is the declared policy of the State to promote 
and provide a rising standard of living and an improved quality of life for all. In pursuit 
of such policy, the state recognizes the need and so undertakes to grant old-age 
pension for life to senior citizens who retired under Republic Act 1616 as well as 
survivorship benefits to their survivors who are otherwise deprived thereof, in order 
that such pension would be responsive to their increasing needs. 
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Section 2. Coverage, This Act shall cover senior citizens who retired under RA 
1616 effective June 1, 1977 and thereafter. 
Section 3. Change of Mode of Retirement. An employee who retired not earlier 
than June 1, 1977 under Republic Act 1616 but who is otherwise qualified to retire 
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under RA 660 or PD 1146, shall hereafter automatically have this gratuity retirement 
conierted to a pension system of his choice under existing laws that is more beneficial 
to him, and thereafter shall receive the old-age pension for life as well as the 
survivors' benefits for this survivors provided under such laws. In addition, the retiree 
or his syrvivors' shall no longer be required to reimburse to the Government Service 
Insurance System (GSIS) the retirement gratuity previously received by him form his 


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last employer as well as the refunds from the GSlS of the personal and employer's 
premium as the case may be but shall be considered as partial payment by the GSlS 
to the retiree under the pension law of his choice. 
Section 4. Status of the Converted Senior Citizen-Retiree. Upon approval of 
this Act, the status of the converted senior citizen - retiree shall, for all intents and 
purposes, be the same as though he had originally retired under the annuity Pension 
System, and henceforth be accorded all the present and future benefits and privileges 
accruing to a retiree under the annuity Pension System. However, if an RA 1616 
retiree prefers not to be converted under this Act, then he shall so state in writing to 
the GSIS. 
Section 5. Funding. Such sum as may be necessary for the payment of the 
retirement/ survivorship benefits under Section 3 of this Act, shall be charged against 
the irccumulated aggregate residual actuarial reserves as established pursuant to 
Sec. 24 (b) of Commonwealth Act 186, as amended, that the GSlS essentially saved 
from not being required to pay the old-age pension for life, as well as the survivorship 
benefits of thousand of RA 1616 retirees whose lump sum gratuity was each paid 
instead by his last employer effective from the time RA 1616 took effect on May 31, 
1875. 
Section 6. lmplernenting Guidelines. The GSIS, in connection with the 
Department of Budget and Management, shall issue the necessary guidelines for the 
implementation of this Act not later than sixty (60) days after the approval hereof. 
Section 7. Separabilify Clause. Should any provision of this Act or any part 
thereof be declared invalid, the other provisions, so far as they are seDarable from the 
invalid ones, shall remain in full force and effect. 
Section 8. Repealing Clause. All laws, presidential decrees, letter of 
instructions, executive orders, rules and regulations, or parts thereof inconsistent with 
the provisions of this Act are hereby repealed or modified accordingly. 
Section 9. Approved. This Act shall take effect upon its approval. 
' Approved,