FIFTEENTH 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., 1633

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.

RUF ie.
Ma

MAXIMO B. RODRIGUEZ, JR.


FIFTEENTH 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,_1639

AN ACT
PROVIDING EARLY RETIREMENT AND VOLUNTARY SEPARATION
FROM THE GOVERNMENT SERVICE, PROVIDING A SYSTEM OF
FUNDING THEREFOR, 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. \t 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 essential/vital
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 essentialivital 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. —
Al 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.
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.
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.
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.
Government Finance Institutions (GFis) shall establish a concessional

loan program for early retirees who decide to put up business
ventures.

b)

°)

d)

e)

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
tules 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 accumulation 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.