FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

1399

House Bill No.

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

EXPLANATORY NOTE

Republic Act No. 8291, otherwise known as the GOVERNMENT
SERVICE INSURANCE SYSTEM ACT OF 1997 was enacted in 1997 to
amend Presidential Decree No.1148. However, recent developments have
necessitated the need to further amend RA 8291. The amendments that this
bill will introduce include the following:

A) This bill gives government employees who retired from government
service the option to enjoy the benefits of their retirement either under
Republic Act No. 1616 or Republic Act No. 660.

Under Republic Act No. 1616 which amended certain provisions of
Commonwealth Act Numbered 186, as amended, by prescribing two other
modes of retirement and for other purposes, a government retiree is entitled
to: 1.) gratuity payable by the last employer based on the total creditable
service converted into gratuity months multiplied by the highest compensation
received; and 2.) refund of retirement premiums consisting of personal
contributions of the employee plus interest, and government share without
interest, payable by GSIS.

On the other hand, a government retiree under Republic Act No. 660 is
entitled to: 1.) automatic pension subject to certain conditions; 2.) initial three-
year lump sum; and 3.) five-year lump sum for those who are at least 63 years
of age or over on the date of retirement.

Government employees who devoted their productive years to
government service deserve to maximize the benefits of their retirement. By


giving them the option to avail of the same under any of the aforementioned
laws will give due recognition to the years they devoted to public service.

B) This bill increases the number of members of the GSIS Board of
Trustees from eight (8) to nine (9) members to accommodate one (1)
tepresentative from the government retirees group. This amendment is
designed to increase and insure continuous liquidity of the fund for the benefit
of more than one million retired pensioners as well as all future retirees of the
government of the Republic of the Philippines.

Government employees contribute to the Retirement Fund of the
Government Service Insurance System with the expectation that they would
receive pensions after their retirement from government service. The
Retirement fund of GSIS is primarily established and created for the welfare
and benefit of qualified former government workers after rendering the
prescribed number of years of service and/or upon attainment of retirement
age. However, despite tremendous contributions from the members, there are
numerous cases where government retirees are unable to receive the
pensions they are entitled to receive due to lack of funds despite years of
contributions. One cause of the unavailability of the funds is due to
mismanagement by the GSIS Board of Trustees. The Board makes
unnecessary expenses and unwise investments causing losses to the fund.

C) This proposed bill will equalize the grant of retirement benefits for all
branches of the government just like those in the judiciary as well as in
military, where the pension of those already retired are correspondingly
automatically adjusted the moment the salary rate of those in the active
service is adjusted.

There exists a wide disparity in the amount of pension received by
government pensioners who retired several years earlier compared to the
amount of pension received by those who retired in recent years. The
disparity is due to unforeseen factors principally the fluctuation of the value of
the peso. The salary rate upon which the computation of the pension was
based was low for those who retired earlier whereas the salary rate of those
retired in recent years were already adjusted to higher levels. Further, the


cost index of basic commodities skyrocketed in recent years as a result of
adverse global conditions including the rising prices of gasoline and oil based
products.

The above disparity has caused untold miseries and disenchantment to
retirees from the earlier periods many of whom are receiving monthly pension
of just a little over a thousand pesos.

D) This bill expands the coverage and benefits of government
employees under the Government Service Insurance System by allowing the
dependents to avail of the survivorship benefits whether they are gainfully
employed or not.. Under this Section 2f of the current law, the dependents of
a member are defined as: (a) the legitimate spouse dependent for support
upon the member pensioner; (b) the legitimate, legitimated, legally adopted
child, including the illegitimate child, who is unmarried, not gainfully employed,
not over the age of majority, or is over the age of majority but incapacitated
and incapable of self-support due to a mental or physical defect acquired prior
to age of majority; and (c) the parents dependent upon the member for
‘support.

This definition of who are dependents unduly restrict the availment of
benefits by the surviving spouse, children and parents of the members. The
social security and insurance benefits of government employees must be re-
examined to assure comprehensive and integrated social security and
insurance programs that will provide benefits responsive to their needs and
those of their dependents in the event of sickness, disability, death, retirement
and other contingencies.

In view of the foregoing, immediate passage of this bill is earnestly
sought.

Z

Me

MAXIMO B. RODRIGUEZ, JR


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES
13939

House Bill No. ~~“

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

AN ACT
PROVIDING FOR OMNIBUS AMENDMENTS TO REPUBLIC ACT NO.
8291, OTHERWISE KNOWN AS “THE GOVERNMENT SERVICE
INSURANCE ACT OF 1997”.

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Section 2(f) of Republic Act No. 8291, otherwise known as the
Government Service Insurance Act of 1997 is hereby amended to read as
follows:

"(f) Dependents- Dependents shall be the following: (a) the legitimate spouse
[dependent for support upon] OF the member or pensioner; (b) the legitimate,
legitimated, legally adopted child, including the illegitimate child, who is
unmarried, [not gainfully employed], not over the age of majority, or is over the
age of majority but incapacitated and incapable of self-support due to a
mental or physical defect acquired prior to age of majority; and (c) the parents
[dependent upon] OF the member [for support] ;

SEC. 2. The same Republic Act is hereby amended by adding a new section
after Section 14 to be denominated as Section 14- A to read as follows:

“Section 14- A RETIREMENT OPTION - EMPLOYEES, INCLUDING
THOSE WHO HAVE PREVIOUSLY RETIRED OR SEPERATED
FROM THE SERVICE BUT WERE RE-EMPLOYED OR REINSTATED
AND SUBSEQUENTLY COMPULSORILY RETIRED AFTER THE
EFFECTIVITY AND IMPLEMETTATION OF R.A. 8291 AND THOSE
WHO ARE IN GOVERNMENT SERVICE UPON THE EFFECTIVITY
OF THE SAID LAW SHALL, AT THE TIME OF THEIR RETIREMENT,
BE ACCORDED THE OPTION TO RETIRE UNDER R.A. 1616 OR
R.A. 660, AND THEIR BENEFITS AND ENTITLEMENTS THERETO
BE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF
THE LAW SO OPTED OR CHOSEN.”


SEC. 3. The first paragraph of Section 42 of RA 8291 is amended to read as
follows:

“SECTION 42. The Board of Trustees; Its Composition;
Tenure and Compensation. — The corporate powers and
functions of the GSIS shall be vested in and exercised by the
Board of Trustees composed of the President and General
Manager of the GSIS and [eight (8)] nine (9) other members to
be appointed by the President of the Philippines, one (1) of
whom shall be either the President of the Philippine Public
School Teachers Association (PPSTA) or the President of the
Philippine Association of School Superintendents (PASS),
another two (2) shall represent the leading organizations or
associations of government employees/retirees, another four (4)
from the banking, finance, investment, and insurance sectors,
[and] one (1) recognized member of the legal profession who at
the time of appointment is also a member of the GSIS, and one
(1) retired government pensioner duly nominated by the
Government Retirees Association of the Philippines
(GRAPHIL). The Trustees shall elect from among themselves a
Chairman while the President and General Manager of the GSIS
shall automatically be the vice-chairman.”

SEC. 4, The monthly pension of government retirees shall be upgraded every
five (5) years so as to make the value of the pension be at par with the current
purchasing power of peso. Such sum as may be necessary for the payment of
the adjustment in amount for the payment of monthly pension actuarial
reserves as established pursuant to section 4 (b) of Commonwealth Act 1876,
as amended is hereby appropriated for the purpose of this Act.

SEC. 5. Implementation. — immediately upon approval of this Act, the
President and General Manager of the GSIS shall request the President of the
Government Retirees Association of the Philippines (GRAPHIL) to submit its
nominee as member of the GSIS Board of Trustees and also order/direct the
immediate implementation of the provisions of this Act.

SEC. 6. Separability Clause. — Should any provision of this Act or any part
thereof be declared invalid, the other provisions, so far as they are separable
from the invalid ones, shall remain in full force and effect.

SEC. 7. Repealing Clause. - All laws, orders, issuances, rules and
regulations or parts thereof inconsistent with this Act are hereby repealed or
modified accordingly.

SEC. 8. Effectivity. - This Act shall take effect fifteen (15) days after its
complete publication in at least two (2) newspapers of general circulation.

Approved,