SIXTEENTH CONGRESS y.
REPUBLIC OF THE PHILIPPINES —)
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

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

House Bill No._1223

EXPLANATORY NOTE

This bill was originally introduced as House Bill No. 1399 by the undersigned
Rufus B. Rodriguez during the 15" Congress where it was approved by the
Committee on Revision of Laws and substituted by House Bill No. 6904 with other
House Bills, approved on 2™ reading, approved on 3” reading and was transmitted to
the Senate where it was not acted upon.

Republic Act No. 8291, otherwise known as the GOVERNMENT SERVICE
INSURANCE SYSTEM ACT OF 1997 was enacted in 1997 to amend Presidential
Decree No.1146. 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) representative 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
alittle 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 restricts 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.

RUFUS B. Ri IGUEZ

a an JR


SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

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

House Bill No.__1223

AN ACT
FURTHER STRENGTHENING THE GOVERNMENT SERVICE INSURANCE
SYSTEM

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

SECTION 1. Short Title, - This Act shall be known as the “Revised Government
Service Insurance System (GSIS) Act of 2013".

SEC. 2, Declaration of Policy. — It is a declared policy of the State to provide,
develop and promote a sound social security system responsive to the needs of its
employees, Likewise, the State shall review and strengthen policies that advance
and protect the welfare of employees in the public sector and ensure their right to
participate in policy and decision-making processes affecting their rights and
benefits, Towards this end, the State shall:

(a) Ensure the adoption of policies beneficial to GSIS members, paving the way
for a responsible, integrated and transparent social security system;

(b) Provide greater representation for members at the highest policy-
making level of the GSIS;

(c) Insulate the Social Insurance Fund (SIF) from dissipation due to the
volatility of the global economy; and

(d) Ensure that top-level officials of the GSIS are held accountable for
mismanagement and inefficiencies in the delivery of services to members and
beneficiaries.

A. DEFINITIONS
SEC. 3. Definition of Terms. - Unless the context otherwise indicates, the following
terms shall mean:
(a) GSIS refers to the Government Service Insurance System created by
Commonwealth Act No. 186,
(b) Board refers to the Board of Trustees of the Government Service Insurance

System
(c) Employer refers to the national government, its political subdivisions,
branches, agencies or instrumentalities, including government-owned and -

controlled corporations (GOCCs), and financial institutions with original charters, the
Constitutional commissions and the judiciary.

(d) Employee or member refers to any person receiving compensation while in
the service of an employer as defined herein, whether by election or by appointment,
irrespective of status of appointment, including barangay and sanggunian officials.

(e) Active member refers to a member who is not separated from the service

() Beneficiaries shall be the following:

(1) For married members:


(i) The legitimate spouse; and

(ii) The legitimate, legitimated, legally adopted child, including the illegitimate
child, who is unmarried, not over the age of majority, or is over the age of majority but
is considered a person with disability (PWD) and incapable of self-support due to a
mental or physical impairment acquired prior to age of majority.

(2) For unmarried members:

(i). The legitimate, legitimated, legally adopted child, including the illegitimate
child, who is unmarried, not over the age of majority, or is over the age of majority but
is considered a PWD and incapable of self-support due to a mental or physical
impairment acquired prior to age of majority; or

(ii) In the absence of children, the parents: Provided, however, That the
parents will no longer be considered as beneficiaries once the member marries
and/or begets a child; or

(iii) In the absence of either (i) and (ii), a designated beneficiary who shall have
the same qualifications and be entitled to the same benefits as a legitimate,
legitimated, legally adopted or illegitimate child under paragraph (f)(1)(Ii) of this
section: Provided, That the designation must be made before the member turns fifty
(60) years old: Provided, further, That the designation can only be made once.

(g) Benefits refer to those administered by the GSIS on behalf of its members,
‘as found under Sections 14 to 38 of this Act, specifically: retirement, separation,
unemployment, disability, death/funeral, survivorship and life insurance.

(h) Compensation refers to the basic pay or salary received by an employee,
pursuant to his/her election or appointment, excluding per diems, bonuses, overtie
pay, honoraria, allowances and any other emoluments received in addition to the
basic pay which are not integrated into the basic pay under existing laws.

(i) Contribution refers to the amount payable to the GSIS by the member and
the employer in accordance with Section 10 of this Act.

(i) Current daily compensation refers to the actual daily compensation or the
actual monthly compensation divided by the number of working days in the month of
contingency but not to exceed twenty-two (22) working days.

(k) Average Monthly Compensation (AMC) refers to the quotient arrived at after
dividing the aggregate compensation received by the member during his/her last
thirty-six (36) months ~=—sof_—sservice_ ~— preceding —_his/her
separation/retirement/disability/death by thirty-six (36), or by the number of months
helshe received such compensation if he/she has less than thirty-six (36) months of
service: Provided, That the average monthly compensation shall in no case exceed
the amount and rate as may be respectively set by the Board under the rules and
regulations implementing this Act, as determined by the actuary of the GSIS.

(I). Revalued average monthly compensation refers to an amount equal to one
hundred seventy percent (170%) of the first One thousand pesos (P1,000.00) of the
average monthly compensation plus one hundred percent (100%) of the average
monthly compensation in excess of One thousand pesos (P1,000.00).

(m)Pensioner refers to any person receiving old-age or permanent total
disability pension or any person who has received the retirement benefits: Provided,
however, That one who is receiving survivorship pension benefits as defined in
Sections 33 to 36 of this Act is not considered a pensioner.

(n) Disability refers to any loss or impairment of the normal functions of the
physical and/or mental faculty of a member which reduces or eliminates his/her
capacity to continue with his/her current gainful occupation.

(0) Permanent partial disability accrues or arises due to the complete and
permanent loss of certain portions of the physical faculties, resulting in the disability to
work for a limited period of time.

(p) Permanent total disability accrues or arises due to injury or disease causing
complete, irreversible and permanent incapacity that will permanently disable a
member to work or to engage in the same occupation resulting in loss of income.


(a) Temporary total disability accrues or arises when the impaired physical
and/or mental faculties can be rehabilitated and/or restored to their normal functions;
but such disability shall result in temporary incapacity to work or to engage in any
occupation.

(f) Total length of service refers to the number of years in government service,
regardless of status of employment, with or without premium contributions, to be used
in determining the eligibility of a member and the computation of actual benefits
payable under this Act.

(s) Total income refers to the amount of profit derived from the GSIS' operations
and investments: Provided, That compulsory and optional premium contributions to
the SIF from both employers and employees shall not form part of the GSIS' total
income.

B. MEMBERSHIP IN THE GSIS
SEC. 4. Compulsory Membership. - (a) All government personnel, whether
elective or appointive, irrespective of status of appointment: Provided, That they are
receiving fixed monthly compensation and have not reached the mandatory
retirement age of sixty-five (65) years, are compulsorily covered as members of the
GSIS and shall be required to pay contributions.

(b) Contractual and casual employees who have an employee-employer
relationship with a government agency are also compulsorily covered.

(c) An employee who is already beyond the mandatory retirement age of sixty-
five (65) but whose appointment in government service has been approved by the
Office of the President of the Philippines or has been extended by the Civil Service
‘Commission (CSC) for the purpose of completing the fifteen (15) years of service
required under Republic Act No, 8291 to qualify for retirement benef

(d) The following government employees are not members of the GSIS:

1. Uniformed personnel of the Armed Forces of the Philippines (AFP), the
Philippine National Police (PNP), the Bureau of Fire Protection (BFP)
and the Bureau of Jail Management and Penology (BJMP);

2. Barangay, sanggunian and other government officials who are not
receiving fixed monthly compensation;

3. Government employees covered by separate retirement schemes, as
enumerated under Section 4(e) of this Act; and

4, Personnel who are not receiving fixed monthly compensation and/or do
not have monthly regular hours of work.

(e) The following, who are covered by separate retirement schemes, are also
required to remit regular monthly contributions to the GSIS for their life insurance
policies in order to answer for their life insurance benefits defined under this Act:

1. Members of the Constitutional bodies;

2. Members of the judiciary, including those with equivalent ranks;

3. Members of the national prosecution service; and

4. All others who are or may be subsequently covered by a separate
retirement law.

SEC.5. Optional Membership. - The following shall be given the option to
continue their membership in the GSIS, even beyond the mandatory retirement age
of sixty-five (65):

(a) An official elected to public office before age sixty-five (65) but who will
reach the mandatory retirement age of sixty-five (66) during his/her term. The
elective official shall be allowed to continue paying life and retirement premiums until
the end of his/her term, including any periods of reelection or election to another
public office: Provided, That such period/s of reelection or election are continuous;

(b) An official appointed by the President of the Philippines to public office
before age sixty-five (65) for a fixed term and with a fixed monthly compensation, but
who will reach the mandatory retirement age of sixty-five (65) during his/her tenure.


The appointive official shall be allowed to continue paying life and retirement
premiums until the end of his/her tenure, including any period/s of term extension or
reappointment to another office: Provided, That the period/s of extension or
reappointment is/are continuous; and

(©) An official or employee who holds a coterminus or highly confidential
position who reaches the age of sixty-five (65) years, and whose services are
considered automatically extended until the expiration of the employee's or official's
appointment or until the employee's or official's services are earlier terminated.

SEC.6. Effect of Separation from the Service.~ A member _ separated from
the service either by resignation, retirement, disability, dismissal from the service or
retrenchment shall be deemed an inactive member of the system. An inactive
member shall be entitled to whatever benefits he/she has qualified for in the event of
any contingency compensable under this Act.

SEC.7. Members’ Rights. — In addition to their rights under existing laws, the
members shall have the following rights:
(a) Right to courteous and responsive service:
1. To be considered a GSIS member from the first day of government
service;

2, To be provided prompt and accurate service;

3. To be accorded respect by the executives and employees of the GSIS;
and

4, To be afforded comfortable and customer-friendly facilities when
transacting with the GSIS;

(b) Right to information:

1, To be informed of the laws, regulations, policies or programs affecting
the members’ rights, benefits, obligations and privileges, including
amendments or changes thereto;

2. To be informed of GSIS policies and regulations pertaining to benefits
and claims administration;

3, To be informed of the various modes and options in availing themselves
of benefits;

4, To receive accurate and updated membership data, records and
information, including records of premium remittances and loan
payments;

5. To have GSIS data and records protected from unauthorized, unlawful
or improper disclosure; and

6. To be informed in advance of documents required to facilitate
transaction, processing period and updated status of claims or loan
applications;

(c) Right to GSIS benefits:

1. To receive on time the benefits the member has qualified to even after
separation from the service;

2. To avail of a mode of retirement from among the different applicable
retirement laws and to be allowed to change the chosen mode:
Provided, That the member has met the qualifications required under
the chosen mode: Provided, further, That the pension has not yet been
received or paid;

3. To be protected against discrimination and thus receive the same
benefits and privileges granted other members similarly situated, and

4, To receive benefits exempt from all taxes, fees, charges and duties of
all kinds except for unpaid personal premium contributions and
monetary liabilities due to the fund;

(d) Right to expeditious processing of claims:



1. To claim and receive on time benefits provided under applicable laws;
2. To exhaust all legal remedies under existing laws; and
3. To be protected from diminution of benefits that may arise with the
passage of a subsequent law or regulation; and
(e) Right to be heard:
1. To be represented in the GSIS governing Board of Trustees (Board),
2. To participate in meaningful exchanges of views, dialogues and fora
conducted by the GSIS without fear of reprisal,
3. To be consulted on the policies and programs to be implemented by the
Gsis;
4, To convey grievances and be accorded immediate response; and
5. To transact business with the GSIS in person

SEC. 8. Special Rights for the Elderly, PWDs and Seriously-ill Members,
Pensioners and Beneficiaries. - The following special rights are to be afforded to
the elderly, PWDs and seriously-ill members, pensioners and beneficiaries:

(a) To be provided special access lanes;

(b) To be prioritized in the processing and releasing of claims and benefits;

(c) To be given preference in the dissemination of information pertaining to
policies;

(d) To be provided specialized services necessary to ensure equal access for
PWDs such as sign language interpreters, copies of policies in Braille for the visually-
impaired, regional language interpreters, and others; and

(e) To be accorded leniency in the submission of documents,

SEC.9.  Agencies/Employers’ Responsibilities. - The government agencies
covered by this Act, as employers, shall have the following responsibilities:

(a) To deduct and remit employees’ and employers’ contributions to the GSIS
within the prescribed time mandated by law;

(b) To promptly provide documents required to facilitate the processing of
claims;

(©) To provide additional documents as necessary to reconcile the records of
accounts; and

(d) To promptly inform the GSIS, through their Agency Authorized
Officers (AAOs) of any update pertaining to personal or service records that may
affect the processing of their employees’ claims and benefits.

C, SOURCES OF FUNDS
SEC.10. Contributions. - (a) It shall be mandatory for the member and the
employer to pay the monthly contributions specified in the following schedule:

Percentage of Monthly Compensation Payable by

Monthly ember Emptoyer
Compensation] 9% 12%

Members who are excluded from compulsory retirement coverage as
enumerated under Section 4(d) of this Act shall pay three percent (3%) of their
monthly compensation as personal share, and their employers a corresponding three
percent (3%) for their life insurance coverage.

(b) The employer shall include in its annual appropriation the necessary
amounts for its share of the contributions indicated above, plus any additional


premiums that may be required on account of the hazards or risks of its employees’
occupation

(©) It shall be mandatory and compulsory for all employers to include thi
payment of contributions in their annual appropriations. The appropriate penal, ci
and administrative sanctions under Section 65 of this Act shall be imposed upon
employers who fail to include the payment of contributions in their annual
appropriations or otherwise fail to remit the accurate/exact amount of contributions on
time, or delay the remittance of premium contributions to the GSIS. The heads of
offices and agencies shall be administratively liable for non-remittance or delayed
remittance of premium contributions to the GSIS.

SEC. 11. Collection and Remittance of Contributions. — (a) The employer shall
report to the GSIS the names of all its employees, their corresponding employment
status, positions, salaries and such other pertinent information, including subsequent
changes therein, if any, as may be required by the GSIS. The employer shall deduct
each month from the monthly salary or compensation of each employee the
contribution payable by him/her in accordance with the schedule prescribed in the
rules and regulations implementing this Act.

(b) Each employer shall remit directly to the GSIS the employees’ and
employers’ contributions within the first ten (10) days of the calendar month following
the month to which the contributions apply. The remittance by the employer of the
contributions to the GSIS shall take priority over and above the payment of any and
all obligations, except salaries and wages of its employees.

(c) All outstanding government share premium contributions which were not
paid by any government office or agency shall be included in the annual budget and
shall be remitted automatically by the Department of Budget and Management (DBM)
to the GSIS,

SEC. 12. Interests on Delayed Remittances. - Agencies which delay the
remittance of any and all monies due the GSIS shall be charged interest as may be
prescribed by the Board but not more than two percent (2%) simple interest per
month, Such interest shall be paid by the employers concerned.

SEC.13. Government Guarantee. - The government of the Republic of the
Philippines hereby guarantees the fulfillment of the obligations of the GSIS to its
members as and when they fall due.

D. BENEFITS

SEC. 14. Determination of Amount of Benefits. ~ (a) The computation of total
length of service for the purpose of determining a member's eligibility to the benefits
payable under this Act shall be based on the service rendered starting from the date
of original appoint mentelection, including periods of service at different times under
fone (1) or more employers, those performed overseas under the authority of the
Republic of the Philippines, and those that may be prescribed by the GSIS in
coordination with the CSC.

(b) The computation of actual benefits payable under this Act shall be based on
the total length of service: Provided, however, That computation of benefits prior to
June 24, 1997 shall be based on the period/s of service when required premium
contributions were paid: Provided, further, That computation of benefits of members
not compulsorily covered prior to June 24, 1997 shall be based on the period/s
of service when premium contributions were paid

For the purpose of this section, the term service shall include full-time service
with compensation: Provided, That part-time and other services with compensation
may be included under such rules and regulations as may be prescribed by the
Gsis.


RETIREMENT BENEFITS

SEC. 15. General Conditions for Entitlement. — A member who retires from
service shall be entitled to the retirement benefits enumerated in Section 16(a)
hereof: Provided, That the member:

(a) Has rendered at least fifteen (15) years of service;

(b) Is at least sixty (60) years of age at the time of retirement; and

(c) Is not receiving a monthly pension benefit for permanent total disability.

SEC. 16. Retirement Benefits. -
(a) Retirement benefit shall either be
1. Cash payment equivalent to sixty (60) months of the member's basic
monthly pension (BMP) payable at the time of retirement plus an old-
age pension benefit equal to the BMP payable monthly for life, starting
upon the expiration of the five (5)-year guaranteed period covered by
the cash payment; or
2. Cash payment equivalent to eighteen (18) months of the member's
BMP plus monthly pension for life payable immediately with no five (5)-
year guarantee
(b) Unless the service is allowed under Section 5 of this Act or extended by
appropriate authorities, retirement shall be compulsory for an employee at sixty-five
(65) years of age with at least fifteen (15) years of service: Provided, That if the
employee has less than fifteen (15) years of service, he/she may be allowed to
continue in the service in accordance with existing civil service rules and regulations.

SEC. 17. Computation of the Basic Monthly Pension. - (a) The BMP is equal
to:
1. Thirty-seven and one-half percent (37.5%) of the revalued average
monthly compensation; plus
2, Two and one-half percent (2.5%) of said revalued average monthly
compensation for each year of service in excess of fifteen (15) years:
Provided, That the BMP shall not exceed ninety percent (90%) of the
average monthly compensation.

(b) The BMP may be adjusted upon the recommendation of the GSIS actuary,
the President and General Manager of the GSIS, the Board of Trustees of the GSIS,
and approved by the President of the Philippines in accordance with the rules and
regulations prescribed by the GSIS.

SEC. 18. Periodic Pension Adjustment. - The monthly pension of all
pensioners including all those receiving survivorship pension benefits shall be
periodically adjusted as may be recommended by the GSIS actuary and approved by
the Board in accordance with the rules and regulations prescribed by the GSIS.

SEPARATION BENEFITS

SEC. 19. General Conditions for Entitlement. — A member who separates from
the service before he/she is eligible for retirement under Section 15 of this Act shall
be entitled to the separation benefits enumerated in Section 20 hereof: Provided,
That the member:

(a) Has rendered at least three (3) years of service; and

(b) Is not receiving a monthly pension benefit for permanent total disability

SEC. 20. Separation Benefits. - The separation benefit shall be paid as follows:
(a) If the member has rendered at least three (3) years but less than fifteen
(15) years of service, he/she shall be entitled to a one-time cash payment equivalent


to one hundred percent (100%) of his/her average monthly compensation for each
year of service helshe paid contributions, but not less than Twelve thousand pesos
(P12,000.00). The one-time cash payment shall be payable immediately or upon
reaching sixty (60) years of age, at the option of the member: Provided, That the
average monthly compensation is equivalent to the average salary received by the
member during the last three (3) years of service; and

(b) If the member has rendered at least fifteen (15) years of service but is
below sixty (60) years of age at the time of resignation or separation, he/she shall be
entitled to a one-time cash payment equivalent to eighteen (18) times his/her BMP at
the time of resignation or separation, plus an old-age pension benefit equal to the
BMP payable monthly for life upon reaching the age of sixty (60).

SEC. 21. Effect of Reemployment in Government Service After Separation. —
All service credited for retirement, resignation or separation for which corresponding
benefits have been paid under this Act or other laws shall be excluded in the
computation of service in case of reinstatement in government service and
subsequent retirement or separation which is compensable under this Act.

UNEMPLOYMENT BENEFITS

SEC. 22. General Conditions for Entitlement, — A member who is separated from
the service due to the abolition of his/her office or position resulting from
reorganization shall be entitled to the unemployment benefits enumerated in Section
23 hereof: Provided, That the member:

(a) Has been paying the required contributions for at least one (1) year prior to
separation;

(b) Has not been paid the voluntary separation benefit equivalent to one-time
cash payment or eighteen (18) times the BMP, should he/she opt to avail of the
same before reaching the age of sixty (60); and

(c) Has not availed of any early retirement program as a result of his/her
office's reorganization.

SEC. 23. Unemployment or Involuntary Separation Benefits. - Unemployment
benefits shall be computed as fifty percent (50%) of the average monthly
‘compensation of the member, payable in accordance with the following schedule:

Contributions Made Benefit Duration
One (1) year but less than three (3) years ‘Two (2) months
Three (3) or more years but less than six (6) years Three (3) months
Six (6) or more years but less than nine (9) years Four (4) months

Nine (8) or more years but less than eleven (11) years. Five (5) months
Eleven (11) or more years but less than fifteen (15) years Six (6) months

The first payment shall be equivalent to two (2) monthly benefits. A seven (7)-
day waiting period shall be imposed on succeeding monthly payments.

All accumulated unemployment benefits paid to the employee during his/her
entire membership with the GSIS shall be deducted from voluntary separation
benefits.

The GSIS shall prescribe the detailed guidelines in the operationalization of this
section in the rules and regulations implementing this Act.

PERMANENT DISABILITY BENEFITS

SEC. 24, General Conditions for Entitlement. - A member who suffers
permanent disability for reasons not due to his/her grave misconduct, notorious
negligence, habitual intoxication or willful intention to kill himself/herself or another
shall be entitled to the disability benefits provided for in this Act: Provided, That


he/she is in the service at the time of disability or has paid a total of at least one
hundred eighty (180) monthly contributions prior to his/her disability, if already
separated from the service.

SEC. 25. Types of Disability Benefits. — There are two (2) types of permanent
disability which shall be determined by the GSIS based on established medical
standards: (a) permanent total disability, and (b) permanent partial
disability.

SEC. 26. Permanent Total Disability Benefits. — (a) The following disabilities
shall be deemed permanent and total:

(1) Complete loss of sight of both eyes;

(2) Loss of two (2) limbs at or above the ankle and wrist;

(3) Permanent complete paralysis of two (2) limbs;

(4) Complete loss of hearing of both ears;

(5) Brain injury resulting in incurable imbecility or insanity; and

(6) Such other cases as may be determined by the GSIS

(b) The member shall receive a monthly income benefit for life equal to the
BMP effective from the date of disability.

(0) A cash payment equivalent to eighteen (18) times his/her BMP shall also be
given if the member is in the service at the time of disability and he/she has paid a
total of at least one hundred eighty (180) monthly contributions.

(d) A member cannot enjoy the monthly income benefit for permanent disability
and old-age retirement simultaneously.

(e) If a member does not satisfy the conditions stated under Section 24 hereof
but has rendered at least three (3) years of service at the time of his/her disability,
he/she shall be advanced the cash payment equivalent to one hundred percent
(100%) of his/her average monthly compensation for each year of service he/she
paid contributions, but not less than Twelve thousand pesos (P12,000.00) which
should have been his/her separation benefit.

(f) Unless the member has reached the minimum retirement age at the time of
disability, his/her entitlement to permanent total disability benefit shall be suspended
when:

(1) He/She recovers from disability as determined by the GSIS, whose decision
shall be final and binding; or

(2) He/She fails to undergo medical examination when required by the GSIS,

SEC. 27. _ Effect of Reemployment on the Disability Benefits Being Received. —
(a) Entitlement to permanent total disability benefit shall continue in the event of
reemployment and the member's new salary grade, rank or position is lower than
that of his/her previous employment prior to his/her disability: Provided, That the
member has properly informed the GSIS of his/her reemployment.

(b) The disability benefits to be received after reemployment shall be adjusted
by the GSIS; to be computed as the difference between the amount of the existing
disability benefit and the member's salary from his/her new employment.

(c) Failure by the member to inform the GSIS of the reemployment shall result
in the suspension of disability benefits being received.

PERMANENT PARTIAL DISABILITY BENEFITS
SEC. 28. Permanent Partial Disability Benefits. — (a) The following disabilities
shall be deemed permanent partial
(1) Complete and permanent loss of the use of:
() Any finger;
(ii) Any toe;
(ili) One (1) arm;


(iv) One (1) hand
(v) One (1) foot;
(vi) One (1) leg;
(vii) One (1) or both ears;
(vill) Hearing of one (1) ear; and
(ix) Sight of one (1) eye; and
(2) Such other cases as may be determined by the GSIS,
(a) The member shall receive a cash payment in accordance with a schedule
of disabllities to be prescribed by the GSIS.

TEMPORARY TOTAL DISABILITY BENEFITS

SEC. 29. General Conditions for Entitlement. - An active member whose
injuries result in temporary incapacity to work or to engage in any occupation shall be
entitled to the temporary total disability benefits provided for in this Act.

SEC. 30. Temporary Total Disability Benefit. — (a) A member shall be entitled to
seventy-five percent (75%) of his/her current daily compensation for each day or
fraction thereof of temporary total disability benefit not exceeding one hundred
twenty (120) days in one (1) calendar year after exhausting all his/her sick leave
credits and collective bargaining agreement sick leave benefits, if any, but not earlier
than the fourth day of his/her temporary total disability: Provided, however, That a
member cannot enjoy the temporary total disability benefit and sick leave pay
simultaneously: Provided, further, That if the disability requires more extensive
treatment that lasts beyond one hundred twenty (120) days, the payment of the
temporary total disability benefit may be extended by the GSIS but not to exceed a
total of two hundred forty (240) days.

(b) The temporary total disability benefit shall in no case be less than One
hundred sixty-five pesos (P165,00) a day subject to periodic review every three (3)
years

(c) The notices required of the member and the employer, the mode of
payment, and the other requirements for entitlement to temporary total disability
benefits shall be provided in the rules and regulations to be prescribed by the GSIS.

SEC.31. — Non-scheduled Disability. - For injuries or illnesses resulting in a
disability not listed in the schedule of partial/total disability provided herein, the GSIS
shall determine the nature of the disability and the corresponding benefits therefor.

DEATH BENEFITS

SEC.32. Funeral Benefit. - The amount of funeral benefit shall be determined
and specified by the GSIS in the rules and regulations but shall not be less than
Thirty thousand pesos (P30,000.00): Provided, That it shall be adjusted after five (5)
years upon proper recommendation by the GSIS President and General Manager
and approved by the Board and shall be paid upon the death of any of the following

(a) An active member as defined under Section 3(e) of this Act; or

(b) A member who has been separated from the service, but who may be
entitled to future benefit pursuant to Section 6 of this Act; or

(c) A pensioner, as defined in Section 3(m) of this Act; or

(d) A retiree who at the time of hisher retirement was of pensionable age
under this Act but who opted to retire under Republic Act No, 1616.


SURVIVORSHIP BENEFITS

SEC. 33. General Entitlement to Survivorship Benefits. - When a member or
pensioner dies, the qualified beneficiaries shall be entitled to the survivorship
benefits provided under Sections 34 to 36, subject to the conditions therein provided
for.

SEC. 34. Survivorship Pension, ~ The survivorship pension shall consist of:

(a) The basic survivorship pension which is fifty percent (50%) of the BMP but
shall not be more than fifty percent (50%) of the maximum step salary of an
Undersecretary. The cap on the survivorship pension may be reviewed every five (5)
years by the Board, based on the recommendations of the GSIS actuary, by
‘considering the issuances on the salary standardization law; and

(b) The children's pension not exceeding fifty percent (50%) of the BMP.

The maximum amount of basic survivorship pension prevailing at the time of
death of the member or pensioner shall apply. Any subsequent increase/s in the
maximum step salary of an Undersecretary will not result in any adjustment to the
survivorship pension already being paid.

SEC. 36, Death of a Member. - (a) Upon the death of a member, the qualified
beneficiaries shall be entitled to survivorship benefits, which shall be paid as follows:

(a) If, at the time of death, a married member was in active service and has
rendered at least fifteen (15) years of service

1. The legitimate spouse, if he/she is the sole beneficiary, shall receive the
cash payment equivalent to eighteen (18) multiplied by (x) the BMP and
the basic survivorship pension for life;

2. The qualified children, as defined under Section 3(f)(1)(l) hereof, are
the only beneficiaries; they shall be entitled to pension equivalent to ten
percent (10%) of the BMP for each child but not to exceed fifty percent
(60%) of the BMP; and

3. When the survivors are the legitimate spouse and the qualified children,
the legitimate spouse shall receive the cash payment equivalent to
eighteen (18) multiplied by (x) the BMP and the basic survivorship
pension, and the qualified children shall receive the children’s pension
mentioned in the preceding paragraph (2).

(b) If, at the time of death, the unmarried member was in the active service and
has rendered at least fifteen (15) years of service

1. The qualified children, as defined under Section 3(f)(2)(i) hereof, are the
only beneficiaries; they shall be entitled to pension equivalent to ten
percent (10%) of the BMP for each child but not to exceed fifty percent
(60%) of the BMP;

2. The parents, if they are the only qualified beneficiaries, shall receive
the cash payment equivalent to eighteen (18) multiplied by (x) the BMP;
and

3. In the absence of a child and the parent’s, the designated beneficiary,
as defined under Section 3(f)(2)(il) hereof, if he/she is the only qualified
beneficiary, shall receive the cash payment equivalent to eighteen (18)
multiplied by (x) the BMP: Provided, however, That if the designated
beneficiary is a child, he/she shall be entitled to pension equivalent to
ten percent (10%) of the BMP until he/she reaches the age of majority.

(c) If, at the time of death, the member was in active service with less than
fifteen (15) years of service, the qualified beneficiaries shall receive the cash
payment equivalent to one hundred percent (100%) of the AMC for every year of
service but not less than Twelve thousand pesos (P12,000.00), to be computed in
accordance with Section 14 of this Act.


(d) If, at the time of death, the member was separated from the service, the
qualified survivors shall be entitled to:
1. The survivorship pension if the inactive member has at least fifteen (15)
years of service; or
2. The cash payment equivalent to one hundred percent (100%) of the AMC
for every year with paid contributions, but not less than Twelve thousand
pesos (P12,000.00) ifthe inactive member has at least three (3) years but
less than fifteen (15) years of service, was less than sixty (60) years old at
the time of death and has not yet received his/her separation benefit from
the GSIS.

SEC. 36. Death of a Pensioner. - Upon the death of an old-age pensioner or a
member receiving the monthly income benefit for permanent disability, the qualified
beneficiaries shall be entitled to the survivorship pension defined in Section 34 of this
‘Act, subject to the provisions of Section 35 hereof. When the pensioner dies
within the five (5)-year guaranteed period covered by the cash payment, the
survivorship pension shall be paid only after the expiration of the said period.

LIFE INSURANCE BENEFITS:

SEC. 37. Compulsory Life Insurance. — All employees, except for those
enumerated under Section 4(d) of this Act, shall, under such terms and conditions as
may be promulgated by the GSIS, be compulsorily covered with life insurance, which
shall automatically take effect on the date of their employment.

SEC. 38, Dividends. — An annual dividend may be granted to all members of the
GSIS whose life insurance is in force for at least one (1) year in accordance with a
dividend allocation formula to be determined by the GSIS.

SEC. 39. Optional Insurance. ~ Subject to the rules and regulations prescribed
by the GSIS, a member may apply for insurance and/or pre-need coverage
embracing life, health, hospitalization, education, memorial plans and such other
plans as may be designed by the GSIS, for himself/herself and/or his/her
dependents, Any employer may likewise apply for group insurance coverage for its
employees, The payment of the premiums/installments for optional insurance and
pre-need products may be made by the insured or his/her employer and/or any
person acceptable to the GSIS.

SEC. 40. Reinsurance. - The GSIS may reinsure any of its interests or part
thereof with any private company or reinsurer whether domestic or foreign:
Provided, That the GSIS shall submit an annual report on its reinsurance operations
to the Insurance Commission.

E, ADJUDICATION OF CLAIMS AND DISPUTES
SEC. 41. Prescription. - Claims for benefits administered by the GSIS as
defined under Section 3(g) of this Act shall not prescribe: Provided, however, That a
claim based on a contingency which occurred prior to the effectivity of this Act shall
not be covered.

SEC. 42. Facility of Payment. - The GSIS shall prescribe rules and regulations
to facilitate payment of benefits, proceeds and claims for benefits under this Act and
any other laws administered by the GSIS. Payments made by the GSIS prior to its
receipt of an adverse claim to a beneficiary or claimant subsequently found not
entitled thereto shall not bar the legal and eligible recipient to his/her right to demand
the payment of benefits, proceeds and claims from the GSIS.



SEC. 43. Settlement of Disputes. - The GSIS shall have original and exclusive
Jurisdiction to settle any dispute regarding claims and benefits arising under this Act
and any other laws administered by the GSIS.

The Board may designate any member of the Board or official of __the GSIS
who is a lawyer, to act as hearing officer to receive evidence, make findings of
fact and submit recommendations together with all the documentary and testimonial
evidence, to the Board within thirty (30) working days from the time the parties have
closed their respective evidence and filed their last pleading. The Board shall decide
the case within thirty (30) days from the receipt of the hearing officer's findings and
recommendations. The cases heard directly by the Board shall be decided within
thirty (30) working days from the time they are submitted by the parties for decision

SEC. 44, Appeals. - Decisions of the Board shall be appealable to the Court of
Appeals or the Supreme Court, The appeal shall not stay the execution of the award
or decision unless ordered by the Court of Appeals or by the Supreme Court,

SEC, 45. Execution of Decision. - When no appeal is perfected and there is no
order to stay by the Board by the Court of Appeals or by the Supreme Court, any
decision or award of the Board shall be enforced and executed in the same manner
as decisions of the Regional Trial Court. For this purpose, the Board shall have the
power to issue to the city or provincial sheriff or its appointed sheriff such writs of
execution as may be necessary for the enforcement of such decision or award, and
any person who shall fail or refuse to comply with such decision, award, writ or
process after being required to do so shall, upon application by the GSIS, be
punished for contempt.

SEC. 46. Oaths, Witnesses and Production of Records. - When authorized by
the Board, an official or employee of the GSIS shall have the power to administer
cath and affirmation, take depositions, certify to official acts, and issue subpoena ad
testificandum and subpoena duces tecum to compel the attendance of witnesses
and the production of books, papers, correspondences and other records deemed
necessary as evidence in connection with any question arising under this Act. Any
case of contumacy shall be dealt with in accordance with the provisions of Section
580 of the Revised Administrative Code.

F, FUNDS OF THE GSIS
SEC. 47, Funds. - The GSIS shall administer the Social Insurance Fund, which
consists of all contributions payable under Section 10 of this Act together with the
earnings and accruals thereon. The said fund shall be used to finance the benefits
administered by the GSIS under this Act. In addition, the GSIS shall administer the
following funds, to be known collectively as the “GSIS-Administered Funds":

(a) The Optional Insurance Fund for the insurance coverage described in
Section 39 hereof;

(b) The Employees’ Compensation Insurance Fund created under Presidential
Decree No. 626, as amended;

(c) The General Insurance Fund created under Act No. 656, as amended; and

(d) Such other special funds existing or that may be created for special groups
or persons rendering services to the government.

The GSIS shall maintain the required reserves for each fund to guarantee the
fulfillment of its obligations under this Act.

The funds administered by the GSIS shall not be used for purposes other than
those provided for under this Act. The Board may allocate an amount not exceeding
fifty percent (50%) of the unassigned surplus from any of the GSIS-Administered
Funds, except the Employees’ Compensation Insurance Fund, to the Social
Insurance Fund: Provided, That the amount shall be used solely to meet the



required reserves to fulfill the obligations of the GSIS to its members: Provided,
further, That it is approved by the President of the Philippines, upon the
recommendation of the Governance Commission for Government-Owned and -
Controlled Corporations (GCG).

No portion of the funds of the GSIS or income thereof shall accrue to the
general fund of the national government and its political subdivisions,
instrumentalities and other agencies, including government-owned and controlled
corporations except as may be allowed under this Act.

SEC. 48. Deposits and Disbursements. - All revenues collected and —_alll
accruals thereto shall be deposited, administered and disbursed in accordance with
the law. A maximum expense loading of twelve percent (12%) of the yearly total
income and 0.7% of the total net assets may be disbursed for administrative and
‘operational expenses except as may be otherwise approved by the President of the
Philippines on the basis of actuarial and management studies.

SEC. 49. Investment of Funds. — The funds of the GSIS which are not needed
to meet the current obligations may be invested under such terms and conditions
and rules and regulations as may be prescribed by the Board: Provided, That
investments shall optimize the requirements of liquidity, safety/security and yield as
‘embodied in formal investment policy guidelines approved by the Board in order to
ensure the actuarial solvency of the funds of the GSIS: Provided, further, That the
GSIS shall submit an annual report on all investments made to both Houses of
Congress of the Philippines. The funds may be invested in the following:

(a) In interest-bearing or zero-coupon bonds or securities or other evidence of
indebtedness of the Government of the Philippines;

(b) In interest-bearing or zero-coupon deposits or securities in any domestic
bank doing business in the Philippines: Provided, That, in the case of such deposits,
these shall not exceed at any time the unimpaired capital and surplus or total private
deposits of the depository bank, whichever is smaller: Provided, further, That said
bank has prior designation as a depository for the purpose by the Monetary Board of
the Bangko Sentral ng Pilipinas;

(c) In. short-and-medium term loans to members such as salary, policy,
educational, emergency, stock purpose plan and other similar loans; Provided, That
the GSIS shall lend no less than forty percent (40%) of the investible fund of the
GSIS Social Insurance Fund for these purposes;

(d) In bonds, securities, promissory notes or other evidence of indebtedness of
educational or medical institutions to finance the construction, improvement and
maintenance of schools and hospitals;

(e) In real estate property including shares of stocks involving real estate
property and investments secured by first morlgages on real estate or other
collaterals acceptable to the GSIS: Provided, That such investments shall, in the
determination of the Board, redound to the benefit of the GSIS, its members, as well
as the general public;

(f) In debt instruments and other securities traded in the secondary markets;

(q) In loans to or in bonds, debentures, promissory notes or other evidence of
indebtedness of any solvent corporation created or existing under the laws of the
Philippines;

(h) In common and preferred stocks of any solvent corporation or financial
institution created or existing under the laws of the Philippines listed in the stock
exchange subject to the requirements of liquidity, safety, security and expected
returns as embodied in formal investment policy guidelines approved by the Board;

(i. In domestic mutual funds including investments related to the operations of
mutual funds; and



() In foreign mutual funds and in foreign currency deposits or foreign currency-
denominated debts, nonspeculative equities and other financial instruments or other
assets issued in accordance with existing laws of the countries where such financial
instruments are issued: Provided, That these instruments or assets are tradable
and/or listed in a duly recognized exchange: Provided, further, That not more than
ten percent (10%) of the investible funds shall be invested abroad

SEC. 50. Records and Reports. - The GSIS shall keep and cause to keep such
records as may be necessary for the purpose of making actuarial studies,
calculations and valuations of the funds of the GSIS, including such data needed in
the computation of rates of disability, mortality, morbidity, separation and retirement
among the members and any other information useful for the adjustment of the
benefits of the members. The GSIS shall maintain appropriate books of accounts to
record its assets, liabilities, income, expenses, receipts and disbursements of funds
and other financial transactions and operations.

SEC. 51. Examination and Valuation of the Funds. - The GSIS shall make a
periodic actuarial examination and valuation of its funds in accordance with accepted
actuarial principles.

SEC.52. Exemption from Tax, Legal Process and Lien. - It is hereby
reaffirmed as a State policy that the actuarial solvency of the funds of the GSIS shall
be preserved and maintained at all times and that contribution rates necessary to
sustain the benefits under this Act shall be kept as low as possible in order not to
burden the members of the GSIS and their employers. Taxes imposed on the GSIS
tend to impair the actuarial solvency of its funds and increase the contribution rate
necessary to sustain the benefits of this Act. Accordingly, notwithstanding any law to
the contrary, the GSIS, its assets, revenues (including all accruals thereto),
transactions and benefits paid shall remain exempt from all forms and kinds of direct
or indirect taxes, assessments, fees, charges or duties imposed by the national or
local government. These exemptions shall continue unless expressly, specifically
and categorically revoked or repealed, and any assessment against the GSIS as of
the approval of this Act is hereby considered paid and cancelled. Consequently, all
laws, ordinances, regulations, issuances, opinions or jurisprudence contrary to or in
derogation of this provision are hereby deemed repealed, superseded and rendered
ineffective and without legal force and effect.

The exemptions provided herein shall neither be affected nor derogated by
subsequent laws to the contrary unless this section is expressly, specifically and
categorically revoked or repealed by law and a provision is enacted to substitute or
replace the exemption referred to herein as an essential factor to maintain or protect
the solvency of the fund, notwithstanding and independently of the guarantee of the
national government to secure such solvency or liability.

The funds andior the properties of the GSIS referred to herein shall be exempt
from attachment, garnishment, execution, levy or other processes issued by the
courts, quasi-judicial agencies or administrative bodies including the Commission on
Audit (COA) disallowances. The benefits, sums or monies corresponding to the
benefits under this Act shall likewise be exempt from attachment, garnishment,
execution, levy or other processes issued based on financial obligations or liability of
any member, including any pecuniary accountability arising from or caused or
occasioned by his/her exercise or performance of his/her official functions or duties,
or incurred relative to or in connection with his/her position or work except when
his/her monetary liability, contractual or otherwise, is in favor of the GSIS.


G. ADMINISTRATION
SEC. 53. Implementing Body. — The GSIS, as created under Commonwealth Act
No. 186, shall implement the provisions of this Act.

SEC. 54, Powers and Functions of the GSIS. - The GSIS shall exercise the
following powers and functions:

(a) Formulate, adopt, amend and/or rescind such rules and regulations as may
be necessary to carry out the provisions and purposes of this Act, as well as the
effective exercise of the powers and functions, and the discharge of duties and
responsibilities of the GSIS, its officers and employees: Provided, That these
implementing rules and regulations shall not contravene the provisions of this Act nor
shall it result in the diminution of any benefit provided by law;

(b) Adopt or approve the annual and supplemental budget of receipts and
expenditures including salaries and allowances of the GSIS personnel and to
authorize such capital and operating expenditures and disbursements of the GSIS as
may be necessary and proper for the effective management and operation of the
GSIS;

(©) Invest the funds of the GSIS, directly or indirectly, in accordance with the
provisions of this Act;

(d) Acquire, utilize or dispose of, in any manner recognized by law, real or
personal property in the Philippines or elsewhere necessary to carry out the
purposes of this Act;

(e) Conduct continuing actuarial and statistical studies and valuations to
determine the financial condition of the GSIS and, taking into consideration such
studies and valuations and the limitations herein provided, readjust the benefits,
contributions, premium rates, interest rates or the allocation or reallocation of the
funds to the contingencies covered;

(f) Have the power of succession;

(g) Sue and be sued;

(h) Enter into, make, perform and carry out contracts of every kind and
description with any person, firm or association or corporation, domestic or foreign;

(i) Carry on any other lawful business whatsoever in pursuance of, or in
connection with the provisions of this Act;

() Have one (1) or more offices in and outside of the Philippines, and to
conduct its business and exercise its powers throughout and in any part of the
Republic of the Philippines and/or in any or all foreign countries, states and
territories: Provided, That the GSIS shall maintain a branch office in every province
where there exists a minimum of fifteen thousand (15,000) membership;

(k) Borrow funds from any source, private or government, foreign or domestic,
only as an incident to the securitization of housing mortgages of the GSIS and on
account of its receivables from any government or private entity;

()) Invest, own or otherwise participate in equity in any establishment, firm or
entity;

(m)Approve appointments in the GSIS, except appointments to positions which
are policy determining, primarily confidential or highly technical in nature, according
to the CSC rules and regulations: Provided, That all positions in the GSIS shall be
governed by a compensation and position classification system and qualifications
standards approved by the Board based on a comprehensive job analysis and audit
of actual duties and responsibilities: Provided, further, That the compensation plan
shall be comparable with the prevailing compensation plans in the private sector and
shall be subject to the periodic review by the Board no more than once every four (4)
years without prejudice to yearly merit reviews or increases based on productivity
and profitability;

(n) Design and adopt an Early Retirement Incentive Plan (ERIP) and/or
financial assistance for the purpose of retirement for its own personnel;



(0) Fix and periodically review and adjust the rates of interest and other terms
and conditions for loans and credits extended to members or other persons, whether
natural or juridical;

(p) Enter into agreement with the Social Security System or any other entity,
enterprise, corporation or partnership for the benefit of members transferring from
one system to another subject to the provisions of Republic Act No. 7699, otherwise
known as the Portability Law;

(q) Have the power to float proper instrument to liquefy long-term maturity by
pooling funds for short-term secondary market;

() Submit annually, not later than June 30, a public report to the President of
the Philippines and the Congress of the Philippines regarding its activities in the
administration and enforcement of this Act during the preceding year including
information and recommendations on Board policies for the development and
perfection of the programs of the GSIS;

(s) Maintain a provident fund, which consists of contributions made by both the
GSIS and its officials and employees and their earnings, for the payment of benefits
to such officials and employees or their heirs under such terms and conditions as it
may prescribe;

({) Approve and adopt guidelines affecting investments, insurance coverage of
government properties, settlement of claims, disposition of acquired assets,
privatization or expansion of subsidiaries, development of housing projects,
increased benefit and loan packages to members and the enforcement of the
provisions of this Act.

(u) Any provision of law to the contrary notwithstanding, to authorize the
payment of extra remuneration to the officials and employees directly involved in the
collection and/or remittance of contributions, loan repayments and other monies due
to the GSIS at such rates and under such conditions as it may adopt: Provided, That
the best interest of the GSIS shall be observed thereby;

(v) Determine, fix and impose interest upon unpaid premiums due from
employers and employees;

(w) Ensure the collection or recovery of all indebtedness, liabilities and/or
accountabilities, including unpaid premiums or contributions in favor of the GSIS
arising from any cause or source whatsoever, due from all obligors, whether public or
private, The GSIS shall demand payment or settlement of the obligations referred to
herein within thirty (30) days from the date the obligation becomes due, and in the
event of failure or refusal of the obligor or debtor to comply with the demand, to
initiate or institute the necessary or proper actions or suits, criminal, civil or
administrative or otherwise, before the courts, tribunals, commissions, boards or
bodies of proper jurisdiction within thirty (30) days reckoned from the expiry date of
the period fixed in the demand within which to pay or settle the account, The GSIS
shall identify, develop and implement specific indicators in connection with the
collection or recovery of indebtedness, liabilities and/or accountabilities which shall
include the compliance rate of the GSIS in filing cases against erring officials of
government agencies;

(x) Design and implement programs that will promote and mobilize savings and
provide additional resources for social security expansion and at the same time
afford individual members appropriate returns on their savings/investments. The
programs shall be so designed as to spur socioeconomic takeoff and maintain
continued growth; and

(y) Exercise such powers and perform such other acts as may be necessary,
useful, incidental or auxiliary to carry out the provisions of this Act, or to attain the
purposes and objectives of this Act.

SEC. 55. The Board of Trustees. - 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) 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
‘one (1) shall come from a leading teaching or nonteaching organization duly
accredited by the CSC; another two (2) shall represent the leading organizations of
government employees, including those in local government units (LGUs); one (1)
shall represent the leading organization of retirees; one (1) shall be a recognized
member of the legal profession who at the time of appointment is also a member of
the GSIS; and two (2) shall be individuals with expertise in banking, finance,
investment and insurance. The Trustees shall elect from among themselves a
chairperson while the President and General Manager of the GSIS shall
automatically be the vice chairperson,

The Trustees shall hold office for one (1) year, until successors are duly
appointed, as provided for in Republic Act No. 10141, otherwise known as the
Governance Act. Vacancy, other than through the expiration of the term, shall be
filled for the unexpired term only. The members of the Board shall be entitled to a per
diem of Two thousand five hundred pesos (P2,500.00) for each board meeting
actually attended by them, but not to exceed Ten thousand pesos (P 10,000.00) a
month and reasonable transportation and representation allowances as may be fixed
by the Board.

SEC. 56, Powers and Functions of the Board of Trustees. - The Board of
Trustees shall have the following powers and functions:

(a) To formulate the policies, guidelines and programs to effectively carry out
the purposes of this Act;

(b) To promulgate such rules and regulations as may be necessary or proper
for the effective exercise of the powers and functions as well as the discharge of the
duties and responsibilities of the GSIS, its officers and employees;

(c) Upon the recommendation of the President and General Manager, to
approve the annual and supplemental budget of receipts and expenditures of the
GSIS, and to authorize such operating and capital expenditures and disbursements
of the GSIS as may be necessary or proper for the effective management, operation
and administration of the GSIS;

(d) Upon the recommendation of the President and General Manager, to
approve the GSIS’ organizational and administrative structures and staffing pattern
subject to existing civil service laws, rules and regulations, and to establish, fix,
review, revise and adjust the appropriate compensation package for the officers and
employees of the GSIS with reasonable allowances, incentives, bonuses, privileges
and other benefits as may be necessary or proper for the effective management,
operation and administration of the GSIS, which shall be exempt from Republic Act
No. 6758, otherwise known as the Salary Standardization Law, and Republic Act No.
7430, otherwise known as the Attrition Law;

(e) To fix and periodically review and adjust the rates of interest and other
terms and conditions for loans and credits extended to its members or other persons,
whether natural or juridical;

(f) The provision of any law to the contrary notwithstanding, to compromise or
release, in whole or in part, any claim or settle liability to the GSIS, regardless of the
amount involved, under such terms and conditions as it may impose for the best
interest of the GSIS;

(g) To approve and adopt guidelines affecting investments, insurance coverage
of government properties, settlement of claims, disposition of acquired assets,
development of housing projects, increased benefit and loan packages to members,
and the enforcement of the provisions of this Act;

(h) To determine, fix and impose interest upon unpaid or unremitted premiums
and/or contributions; and



(i) To do and perform any and all acts necessary, proper or incidental to the
attainment of the purposes and objectives of this Act.

SEC. 57. Positions in the GSIS. - The President and General Manager of the
GSIS shall be its Chief Executive Officer and shall be appointed by the President of
the Philippines. He/She shall be a person with management and investments
expertise necessary for the effective performance of his/her duties and functions
under this Act.

The GSIS President and General Manager shall be assisted by one (1) or more
executive vice presidents, senior vice presidents, vice presidents and managers in
addition to the usual supervisory and rank and file positions who shall be appointed
and removed by the President and General Manager with the approval of the Board,
in accordance with the existing CSC rules and regulations.

SEC. 58. Powers and Duties of the President and General Manager. - The
President and General Manager of the GSIS shall, among others, execute and
administer the policies and resolutions approved by the Board and direct and
supervise the administration and operations of the GSIS. The President and General
Manager, subject to the approval of the Board, shall appoint the personnel of the
GSIS, remove, suspend or otherwise discipline them for cause, in accordance with
the existing CSC rules and regulations, and prescribe their duties and qualifications
to the end that only competent persons may be employed.

SEC.59, Auditor, - (a) The Chairperson of the COA shall be the ex officio
auditor of the GSIS and may assign the necessary personnel to assist the
Chairperson of the COA in the performance of his/her duties.

(b) The Chairperson of the COA or his/her authorized representative shall
submit to the Board soon after the close of each calendar year, an audited statement
showing the financial condition and progress of the GSIS for the calendar year just
ended.

SEC.60. Legal Counsel. - The Government Corporate Counsel shall be the
legal adviser and consultant of the GSIS, but the GSIS may assign to the Office of
the Government Corporate Counsel (OGCC) cases for legal action or trial, issues for
legal opinions, preparation and review of contracts/agreements and others, as the
GSIS may decide or determine from time to time: Provided, however, That the
present legal services group in the GSIS shall serve as its in-house legal counsel

SEC. 61. Powers of the insurance Commission, - The Insurance Commissioner
or his/her authorized representatives shall make an examination of the financial
condition of the GSIS at least once every three (3) years: Provided, however, That
the GSIS shall pay the Office of the Insurance Commissioner an amount equal to the
actual expenses incurred by the said office in the conduct of the examination,
including the salaries of the examiners and of the actuary of such examination for the
actual time spent

The report of said examination shall be submitted to the Board and considered
by the GSIS in the formulation of guidelines affecting insurance coverage of
government properties. Copies thereof shall likewise be furnished to the Office of the
President and both Houses of Congress of the Philippines within five (5) days after
the close of examination


H. GENERAL PROVISIONS
SEC.62. _Dispensation of Social Insurance Benefits. ~ (a) The GSIS shall
release the retirement benefits to the employee within thirty (30) days from the actual
date of retirement: Provided, That all requirements are submitted to the GSIS at least
ninety (0) days prior to the effective date of the retirement.

(b) The GSIS shall not process nor adjudicate retirement claims under
Republic Act No. 1616 which function shall be vested in the agencies concerned,
who shall process and pay the gratuities of their employees. The GSIS shall process
and adjudicate only the refund of retirement premium under Republic Act No. 910.
The Board shall adopt the proper rules and procedures for the implementation of this
provision.

SEC. 63. Development and Disposition of Acquired Assets. - The GSIS shall
have the right to develop and dispose of its acquired assets obtained in the ordinary
course of its business, To add value to, Improve profitability on and/or enhance the
marketability of an acquired asset, the GSIS may further develop/renovate its assets,
either with its own capital or through a joint venture arrangement with private
companies or individuals.

The GSIS may sell its acquired assets in accordance with existing COA rules
and regulations for an amount not lower than the current market value of the
property. For this purpose, the GSIS shall conduct an annual appraisal of its property
or acquired assets to determine its current market value. All notices of sale shall be
published in newspapers of general circulation.

No injunction or restraining order issued by any court, commission, tribunal or
office shall bar, impede or delay the sale and disposition by the GSIS of its acquired
assets except on questions of ownership and national or public interest.

SEC. 64. Government Assistance to the GSIS. - The GSIS may call upon any
‘employer for such assistance as may be necessary in the discharge of its duties and
functions,

1. SANCTIONS
SEC. 65. Penal. - (a) The heads of the offices of the national government, its
political subdivisions, branches, agencies and instrumentalities, including GOCCs
and government financial institutions, and the personnel of such offices who are
involved in the collection of premium contributions, loan amortization and other
accounts due the GSIS who shall fail, refuse or delay the payment, turnover,
remittance or delivery of such accounts to the GSIS within thirty (30) days from the
time that the same shall have been due and demandable shall, upon conviction by
final judgment, suffer the penalties of imprisonment of not less than twenty (20) years
nor more than thirty (30) years and a fine of not less than Five hundred thousand
pesos (P500,000.00) nor more than Five million pesos (P5,000,000.00) and, in
addition, shall suffer absolute perpetual disqualification from holding public office and
other accessory penalties as may be provided by law.

(b) The treasurer, finance officer, cashier, disbursing officer, budget officer or
other official or employee who fails to include in the annual budget the amount
corresponding to the employer and employee contributions, or who fails or refuses or
delays to remit to the GSIS by more than thirty (30) days from the time such amount
becomes due and demandable, or to deduct the monthly contributions of the
employee shall, upon conviction by final judgment, suffer the penalties of
imprisonment from twelve (12) years and one (1) day to twenty (20) years and a fine
of not less than Five hundred thousand pesos (P500,000.00) nor more than Two
million pesos (P2,000,000.00) and, in addition, shall suffer absolute perpetual
disqualification from holding public office.



(c) Any employee, who after deducting the monthly contribution or loan
amortization from a member's compensation, fails to remit the same to the GSIS
within thirty (30) days from the date it should have been remitted under Section 11(b)
shall be presumed to have misappropriated such contribution or loan amortization
and shall, upon conviction by final judgment, suffer the penalties of imprisonment
from twelve (12) years and one (1) day to twenty (20) years and a fine of not less
than Five hundred thousand pesos (P500,000.00) nor more than Two million pesos
(P2,000,000.00) and, in addition, shall suffer absolute perpetual disqualification from
holding public office.

(d) Any employee or member who receives or keeps fund or property
belonging, payable or deliverable to the GSIS and appropriates the same, or takes or
misappropriates or uses the same to any purpose other than that authorized by this
Act, or permits another person to take, misappropriate or use said fund or property
by expressly consenting thereto, or through abandonment or negligence, or is
otherwise guilty of the misappropriation of said fund or property, in whole or in part,
shall be punished by a fine of not less than Five hundred thousand pesos
(P500,000.00) nor more than Two million pesos (P2,000,000.00) and by
imprisonment of not less than twelve (12) years and one (1) day to twenty (20) years
and, in addition, shall suffer absolute perpetual disqualification from holding public
office.

(e) Any person found to have participated directly or indirectly in the
commission of fraud, collusion, falsification or misrepresentation in any transaction
with the GSIS, whether for himself/herself or for some other persons, shall be
punished by a fine of not less than Five hundred thousand pesos (P500,000.00) nor
more than Two million pesos (P2,000,000.00) and by imprisonment of not less than
six (6) years and one (1) day to twelve (12) years and, in addition, shall suffer
absolute perpetual disqualification from holding public office,

(f) Whoever shall obtain or receive any money or check invoking any provision
of this Act or any agreement hereunder, without being entitled thereto with the intent
to defraud any member, any employer, the GSIS or any third party, shall be punished
by a fine of not less than Five hundred thousand pesos (P500,000.00) nor more
than One million pesos (P1,000,000.00) and by imprisonment of not less than six (6)
years and one (1) day to twelve (12) years and such other accessory penalties as
may be provided by law.

(g) Whoever fails or refuses to comply with the provisions of this Act or with the
rules and regulations adopted by the GSIS shall be punished by a fine of not less
than Five hundred thousand pesos (P500,000.00) nor more than One million pesos
(P'1,000,000,00) and by imprisonment of not less than six (6) years and one (1) day
to twelve (12) years and such other accessory penalties as may be provided by law.

(h) The officers and/or personnel referred to in paragraph (a) of this section
shall be liable not only criminally but also civilly to the GSIS or to the employee or
member concerned in the form of damages, including surcharges and interests.

(i) For the charges or complaints referred to in paragraph (a) of this section,
the liabilities therein set forth shall be construed as waiver of the State of its immunity
from suit; hence, the abovementioned offices and/or personnel may not invoke the
defense of non-suability of the State.

()_In the event of failure of the members of the Board, the President and
General Manager and/or other officials of the GSIS to comply with their duties and
obligations under this Act, they shall be subjected to suspension of not less than six
(6) months nor more than one (1) year or a fine of not less than Five hundred
thousand pesos (P500,000.00) nor more than Two million pesos (P2,000,000.00)
without prejudice to any criminal, civil or administrative liability which may also arise
therefrom.


Criminal and civil actions arising from violations of the provisions of this Act
may be commenced by the GSIS or by the aggrieved member either under this Act
or, in appropriate cases, under the Revised Penal Code and other special laws.

SEC. 66. Implementing Rules and Regulations. ~ The implementing rules and
regulations to carry out the provisions of this Act shall be adopted and promulgated
by the GSIS, in consultation with the GCG not later than ninety (90) days after the
approval of this Act.

SEC.67, — Non-impairment of Benefits, Powers, Jurisdiction, Rights, Privileges,
Functions and Activities, - Nothing in this Act shall be construed to repeal, amend
or limit any provision of existing laws, presidential decrees and letters of instructions
not otherwise specifically inconsistent with the provisions of this Act.

SEC.68.  Exclusiveness of Benefits. - Whenever other laws provide similar
benefits for the same contingencies covered by this Act, the member who qualifies
for these benefits shall have the option to choose which benefits will be paid to
him/her. However, if the benefits provided by the law chosen are less than the
benefits provided under this Act, the GSIS shall pay only the difference.

SEC.69. Appropriations. - The amount necessary to carry out the provisions of
this Act shall be included in the respective budgets of the agencies in the national
government obligation program of the year following its enactment into law and
thereafter,

SEC.70. — Separability Clause. - Should any provision of this Act or any part
hereof be declared invalid, the other provisions in so far as these are separable from
the invalid ones shall remain in force and effect.

SEC. 71. Repealing Clause. - Presidential Decree No. 1146, Republic Act No.
8291, Presidential Decree No. 712 and Section 9 of Republic Act No. 656, as
amended by Presidential Decree No. 245, are hereby expressly repealed. All other
laws and any other law or parts of law specifically inconsistent herewith are hereby
repealed or modified accordingly: Provided, That the rights under the existing laws,
rules and regulations vested upon or acquired by an employee who is already in the
service as of the effectivity of this Act shall remain in force and effect: Provided,
further, That subsequent to the effectivity of this Act, a new employee or an
‘employee who has previously retired or separated and is reemployed in the service
shall be covered by the provisions of this Act.

SEC.72, _ Effectivity. - This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation.

Approved,