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

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez

House Bill No. 2787

EXPLANATORY NOTE

This bill was originally introduced as House Bill No. 1399 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. It was again re-filed during the 16"
Congress and the 17" Congress.

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 a little over a
thousand pesos.

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

This definition of who are dependents unduly 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.

mht bi
/


EIGHTEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez
2787

House Bill No.

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’.

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.

(4) 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:

() 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 chil

(ii) 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 (50) 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, overtime 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.

@) 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 of service preceding his/her separation/retiremenvdisability/death by thirty-six
(36), or by the number of months he/she 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.

() 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.

(r) 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.
i)
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 benefits.

(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:

Members of the Constitutional bodies;

Members of the judiciary, including those with equivalent ranks;

Members of the national prosecution service; and

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

AeNa

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 (6:

{a) An official elected to public office before age sixty-five (65) but who will reach the
mandatory retirement age of sixty-five (65) 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

(c) 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:
To be considered a GSIS member from the first day of government servi
To be provided prompt and accurate service;
To be accorded respect by the executives and employees of the GSIS; and
To be afforded comfortable and customer-friendly facilities when transacting
with the GSIS;
(6) Flatt isrpsaton:
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 applicat

(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

(2) Right to be earc

To be represented in the GSIS governing Board of Trustees (Board);

To participate in meaningful exchanges of views, dialogues and fora conducted
by the GSIS without fear of reprisal;

To be consulted on the policies and programs to be implemented by the GSIS;
To convey grievances and be accorded immediate response; and

To transact business with the GSIS in person

bons

gee no


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 respon:

(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;

(c) 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 [member 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.

(c) It shall be mandatory and compulsory for all employers to include the payment of
contributions in their annual appropriations. The appropriate penal, civil 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, po:

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
appointmentelection, including periods of service at different times under one (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 shalll 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 he/she
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 Goverment 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 (9) 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 cont

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.

(c) 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.

(4) 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
SIS 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 disabi
deemed permanent partial
(1) Complete and permanent loss of the use of:
() Any finger;
ii) Anytoe;
(iil) One (1) arm;
(iv) One (1) hand;
(v) One (1) foot;
(vi) One (1) leg;
(vil) One (1) or both ears;
(viii) 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
disabilities 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
ick leave benefits, if any, but not earlier than the fourth day of his/her temporary
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 ilinesses __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 his/her 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

(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.35. 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)\ii) 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 (50%) 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 (50%) 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)(ii) 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:

4. 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) if the 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
SIS, 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 oath 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
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
fulfilment 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
(60%) 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 _all 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 mortgages 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;

(g) 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

(i) 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 shail 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 and/or 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, gamishment, 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;

(c) 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;

() 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;

(j) 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
tules 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 finan
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;

(r) 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;

(t) 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 goverment 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 (P10,000.00) 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
GSsIS;

(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



() 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 (90) days prior to
the effective date of the retirement.

() 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 shalll 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
Tight 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.

L SANCTIONS

SEC.65. Penalty. - (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
tweive (12) years and, in addition, shall suffer absolute perpetual disqualification from
holding public office.

() 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 (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.

{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,