REPRE,

EIGHTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )
HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez

House Bill No. 2744
EXPLANATORY NOTE

For years, the government's manpower has been perceived as bloated and overstaffed
This has not only become a source of inefficiency caused by red tape, but the link between
corruption and government service has become inherent.

In an attempt to address this problem, Congress enacted RA No. 6683 "An Act Providing
Benefits for Early Retirement and Voluntary Separation from Government Service” which aimed
to downsize the huge government bureaucracy by providing ample incentives and benefits to
those who wished to retire and leave government service.

However, records would show that less than the estimated number of public servants
availed of the benefits provided by this law. This can be attributed to two reasons: (1) the
benefits of said law were not remunerative enough to attract government employees to avail of
them, compared to the benefits which they expect to receive when they reach the mandatory
retirement age, and (2) the law was enacted at a time when government salaries were
scheduled to be upgraded. They opted to wait for their salaries to be adjusted based on the
computation given by the Salary Standardization Law.

Huge government bureaucracy thus remained and problems related to an overstaffed
government continued to persist.

This proposed measure then aims to strengthen RA 6683 by offering not only higher
benefits but benefits that are computed based on the present salary schedule. Also, one of the
bigger benefits of this bill is the trimming of the bureaucracy without necessarily creating undue
insecurity on the part of our civil servants. In fact, the bill gives them several options: whether to
stay in government service, to leave and enjoy the benefits offered herein, or start a second
career.

Hence, the immediate passage of this bill is urged.

Mie
RUFUS B. RODRIGUEZ
/


EIGHTEENTH CONGRESS, )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez _
2744

House Bill No.

AN ACT
PROVIDING EARLY RETIREMENT AND VOLUNTARY SEPARATION FROM THE
GOVERNMENT SERVICE, PROVIDING A SYSTEM OF FUNDING THEREFORE, AND FOR
OTHER PURPOSES

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

SECTION 1. Declaration of Policy. It is hereby declared the policy of the State to promote
economy, efficiency and effectiveness in government operations, particularly in the delivery of
essential public services.

For this purpose, the State shall endeavor to streamline government functions and to
maintain necessary positions to effect a leaner and more efficient bureaucracy. To cushion any
possible adverse effect on government employees in the process of reducing the number of
personnel in the government, a safety net shall be created through a more attractive and viable
retirement and separation program.

SECTION 2. Coverage. This Act shall cover all appointive officials and employees of the
national government including government-owned or controlled corporations with original
charters, as well as the personnel of all local government units subject to the results of the
study by the Special Committee on Voluntary Early Retirement of the Legislative Executive
Development Advisory Council (LEDAC) as provided in Section 3 of this Act. The benefits
authorized under this Act shall apply to all regular, temporary, casual, and contractual
employees, regardless of age, who have rendered a total of at least three (3) consecutive years
of government service as of the date of separation. The term “contractual” as used in this Act
does not include experts and consultants hired by the agencies for a limited period to perform
specific activities or services with definite expected output.

Uniformed personnel of the Armed Forces of the Philippines, including those of the
Philippine National Police are excluded from the coverage of this Act.

SECTION 3. Vital and Non-Vital Agencies. The Legislative Executive Development Advisory
Council (LEDAC) shall create a Special Committee of Voluntary Early Retirement with three (3)
members from the Executive Branch, and two (2) members from the Congress (one from each
Chamber) to study and recommend within ninety (90) days after the effectivity of this Act, which
government agencies and/or units may be considered as essentialivital or non-essential/non-
vital on the basis of sound management concepts and guiding principles to be agreed within the
committee.

The Early Retirement Program shall be automatically offered to all employees of agency
identified to be non-essential/non-vital. The same program shall be offered to agencies
identified as essential/vital; Provided, that in no case shall this exceed twenty percent (20%) of


the total number of employees of said agency; Provided further, That application for early
retirement of participating employees from essential/vital agencies to be subject to the approval
of the agency head with the confirmation of the agency's Board of Directors, Trustees,

Administrators or policy making councils, as the case may be.

SECTION 4. Early Retirement and Voluntary Separation Benefits. - All appointive
government officials and employees included in the coverage hereof who voluntarily elect in
writing to be retired or separated from the service and whose retirement has been approved
under the provisions of this Act shall be paid retirement or separation benefits equivalent to the
following:
(a) 1.2 months times the basic salary for every year of government service should the total
be less than ten (10) years;
(b) 1.4 months times the basic salary for every year of government service should the total
be equal to ten (10) years to less than fourteen (14) years;
(c) 1.6 months times the basic salary for every year of government service should the total
be equal to fourteen (14) years to less than nineteen (19) years;
(d) 1.8 months times the basic salary for every year of government service should the total
be equal to nineteen (19) years to less than twenty three (23) years; and
(e) 2 months times the basic salary for every year of government service should the total be
twenty-three (23) years or more, or the nearest equivalent fraction thereof favorably to
them on the basic or the highest salary which they respectively received in the course of
their employment in the government:

Provided, that the phrase “total number of years of government service" shall mean the
total cumulative years of service despite any interruption thereof due to resignation, phase out
or lay-off due to operation of law or reorganization, then followed by subsequent reappointment
irrespective of the length of interruption.

Provided, further, that in no case shall the benefit to be paid to any appointive official or
‘employee be less than Ten Thousand Pesos (P10,000.00); Provided, finally, that any appointive
official or employee who has previously been found guilty in an administrative proceeding and
whose rank or salary has been reduced shall be paid on the basis of his last salary in
accordance with the imposed sanctions.

SECTION 5. Mode of Payment of Retirement Benefits. This early retirees will receive their
separation benefits under a staggered payment scheme, as follows:
(a) Upon approval of the retiree’s application for early retirement, he/she shall receive the
initial payment in cash, which may be equivalent to, but not exceeding, one-year salary
including bonuses from the date of approval until the end of the same calendar year.

(b) The balance of computed benefits (net of initial cash benefits) shall be paid with
interest-earning Treasury Bills, each of which shall have a face value of one (1) year
salary (including bonuses). Each of the Treasury Bills shall mature once. In case of
multiple Treasury Bills, they shall mature after every succeeding year from the date of
approval of the early retirement, until the total amount of benefits are received in full.

SECTION 6. Additional Benefits. In addition to the benefits herein authorized, covered
appointive officials and regular employees who retire or voluntarily elect to be separated from
the service under this bill shall be entitled to the return of GSIS personal contributions pertaining
to retirement only and the payment of corresponding share of the government with the interest
earned pursuant to existing rules and regulations of the GSIS. They shall likewise be entitled to


the commutation of unused vacation and sick leaves in accordance with existing rules and
regulations.

SECTION 7. Exclusivity of Benefits. An appointive official or employee who retires or elects to
be separated from the service under this Act shall not be eligible for optional retirement with
gratuity under Republic Act Nos. 1616 and 4968 or with pension under Commonwealth Act No.
186, as amended by FW 660, or under Presidential Decree 1146, as amended, or vice versa.

SECTION 8. Discretion of Agency Heads to Accept Application for Early Retirement. No
appointive official or employee shall be separated or retired under this Act unless his/her
position, agency or office shall have been declared as non-vital/non-essential by the President
upon the recommendation of the LEDAC Special Committee on Voluntary Early Retirement. In
case of agencies declared as vital or essential, application for early retirement or voluntary
separation shall have been accepted by the head of the government agency, office or
government-owned or controlled corporation concemed as the case may be.

SECTION 9. Restriction on the Employment and Replacement of Retired or Separated
Personnel. Appointive officials and employees who are retired or separated under this Act shall
not be eligible for employment in the government whether on a permanent, temporary, casual,
or contractual status within the period of five (5) years after separation unless they refund the
benefits they have received under this Act.

SECTION 10. Option for Retirees. Early retirees shall be given opportunities to further earn
their income after voluntary separation from the government service. They can avail of the
following opportunities, strictly for early retirees only:

a) The Civil Service Commission (CSC) shall establish and maintain the manpower pool
database where the early retirees with special skills may register for referral purposes.

b) The Cooperative Development Authority (CDA) shall establish a special program for
early retirees who opt to join a cooperative which membership and management shall
be limited to early retirees under this Act. The retirees shall be provided with necessary
orientation and training on cooperatives upon request.

c) The early retirees shall be given the option to continue membership with the GSIS or to
file membership with the Social Security System (SSS) and enjoy special benefits like
shorter maturation period

4) The Asset Privatization Trust (APT) shall establish a program that will provide early
retirees the option to convert their retirement or separation benefits or a portion thereof
into stocks or equity in any of the privatized government owned or controlled operations.

e) Government Finance Institutions (GFls) shall establish a concessional loan program for
early retirees who decide to put up business ventures.

SECTION 11. System of Funding. The positions vacated through the early retirement or
separation of its incumbent shall be temporarily retained until such time that the full amount of
early retirement benefits has been paid. The offices /agencies where these positions come from
are authorized to continue to budget for the salaries and benefits of participating employees as
payment for their initial cash benefits from date of approval of early retirement up to the end of
the calendar year.

For employees of government-owned or controlled operations, the benefits herein
granted shall be paid from the internal funds of the respective corporations. In no case shall the
benefits paid to the employees of government-owned or controlled corporations be less than the
benefits granted by their existing corporate programs, if any.


For employees of local government units, the benefits shall be paid from the available
funds of each local government unit, provided that the funds are officially appropriated under
their regular annual budget.

A special funding shall be appropriated for the study to be conducted by the Special
Committee on Voluntary Early Retirement. This fund shall be taken from the savings of any of
the agencies under the Office of the President.

SECTION 12. Penalties. Any government official who compels an employee under any guise
whatsoever to retire or be separated from the government service by virtue of this Act or
otherwise, shall be punished by a fine of not exceeding Ten Thousand Pesos (P10,000.00) or
by imprisonment not exceeding six (6) months or both such fine and imprisonment at the

discretion of the court.

SECTION 13. Implementing Rules and Regulations. The implementing rules and regulations
shall be issued within ninety (90) days from the effectivity of this Act by the Civil Service
Commission (CSC) in consultation with LEDAC, Department of Budget and Management
(DBM), GSIS, SSS, GFls, CDA, and APT; Provided, that any provision of the law contrary
notwithstanding, the only documents or supporting papers to be submitted by appointive officials
and employees who wish to avail themselves of the benefits under this Act are the following:

a) A duly approved application under oath for early retirement or voluntary separation in
accordance with this Act, including a statement of the number of years of service in the
government and the rate of the highest salary received;

b) Money and property clearance from the agency concerned; and

c) A simplified statement of assets and liabilities, net worth and financial and business
interest in the case of regular employees: Provided, further, that the processing and
actual payment of benefits to the appointive officials and employees concerned shall be
completed within fifteen (15) days from the date of submission of the foregoing
documents.

SECTION 14. Compliance and Reporting. Within six (6) months from the effectivity of this Act
and every six (6) months thereafter, the Department of Budget and Management (DBM) and the
CSC shall, on the basis of the reports of the various heads of government offices and agencies,
render a report to Congress on the number of government employees affected, the type or
nature of positions involved, the total amount spent and an evaluation thereof.

SECTION 15. Transitory Provisions. In case of salary adjustments brought about by existing
and new laws (e.g. Salary Standardization Law), the benefits of such salary shall apply to the
early retirees from the date of effectivity of such law until the year that have full retirement
benefits shall have been paid. In which case, the cumulation of said additional benefits shall be
paid under the separate cash or T-bill arrangements.

SECTION 16. Repealing Clause. All laws, rules and regulations or parts thereof, inconsistent
with the provisions of this Act are hereby repealed or modified accordingly.

SECTION 17. Separability Clause. If any part, section or provision of this Act shall be held
invalid or unconstitutional, no other part, section or provision thereof shall be affected thereby.

SECTION 18. Effectivity. This Act shall take effect for a period of two (2) years commencing
upon its publication in at least two (2) newspapers of general circulation.

Approved,