HOUSE OF REPRESE!
Quezon City

Seventeenth Congress
First Regular Session

HOUSE BILL NO. 4732

Introduced by Representative JOEY SARTE SALCEDA

AN ACT FURTHER STRENGTHENING THE GOVERNMENT SERVICE
INSURANCE SYSTEM

EXPLANATORY NOTE

This measure seeks to revise the Government Service Insurance System (GSIS). The
bill seeks to address some of the long-running concems of GSIS members, many of whom
suffered from years of mismanagement, poor recordkeeping, irregular remittances, inefficient
collection, lack of transparency, and outright abuse and corruption on the part of GSIS and
the government agencies who are jointly responsible for maintaining and ensuring the
continuing viability of the state pension fund.

In particular, this bill aims to strengthen the existing law by improving members’
benefits and institutionalizing members’ rights and responsibilities of agency employers, thus
making regular remittance of premiums, reconciliation of records, and prompt processing of
claims duly demandable and actionable rights. Another improvement in this bill is the use of
the total length of service as basis for the determination of a member's eligibility to receive
benefits and the computation of the amounts thereof in lieu of the computation of service in a
limited amount of time which would result in providing limited benefits to the beneficiaries.

Salient provisions include:
1. Institutionalization of members’ rights.

2. Broader representation in the Board of Trustees of actual members, with the
addition of a Trustee from a leading teaching or non-teaching organization
accredited by the CSC, another two coming from leading organizations of
government employees including those in local government units (LGUs), and
one to represent retirees.


3. Increased criminal and civil liabilities for erring officials/employees with regard to
the deduction and remittance of premium payments of members.

4. Deletion of the qualifier “dependent for support upon member or pensioner” for
beneficiaries under the survivorship benefit which would result in expanding the
coverage of the beneficiaries or pensioners.

5. Provision of an option to unmarried members to designate a beneficiary in the
absence of parents or children which would enable the designated pensioner to
benefit from the system.

6. The penalty for responsible personnel of agency employers who fail to remit to
the GSIS premium payments already deducted from the members is also
increased, from a penalty for mere estafa under the current law to imprisonment
from twelve (12) years and one day to twenty (20) years and a fine of five hundred
pesos (P500,000.00) to two million pesos (P2,000,000.00), plus absolute perpetual
disqualification from holding public office. Where the offense is likewise
attributable to heads of agencies, the penalty is higher.

In light of the foregoing, the passage of this bill is most earnestly sought

REP-JOEY SARTE SALCEDA



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Seventeenth Congress
First Regular Session

HOUSE BILLNO.4733

Introduced by Representative JOEY SARTE SALCEDA

AN ACT FURTHER STRENGTHENING THE GOVERNMENT SERVICE
INSURANCE SYSTEM

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

SECTION 1. Short Title. ~ This Act shall be known as the “Revised Government
Service Insurance System (GSIS) Act of 2014”.

SECTION 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. Toward 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;

) 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.
I. DEFINITIONS,

SECTION 3. Definition of Terms. — Unless the context otherwise indicates, the
following terms shall mean:


a) GSIS — The Government Service Insurance System created by Commonwealth Act
No. 186;

b) Board — The Board of Trustees of the Government Service Insurance System;

c) Employer ~ The national government, its political subdivisions, branches, agencies
or instrumentalities, including, government-owned or controlled corporations, and financial
institutions with original charters, the Constitutional commissions and the judiciary;

d) Employee or Member — Any person, receiving compensation while in the service
of an employer as defined herein, whether by election or appointment, irrespective of status
of appointment, including barangay and sanggunian officials;

¢) Active Member ~ A member who is not separated from the service;
f) Beneficiaries — Beneficiaries shall be the following:
(1) For married members
(i) The legitimate spouse; and

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

(2) For unmarried members

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

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

(iii) In the absence of either (i) and (ii), a designated beneficiary who
shall have the same qualifications and be entitled to the same benefits
as a legitimate, legitimated, legally adopted or illegitimate child under
paragraph (f)(1)(ii) of this Section: Provided, That the designation
must be made before the member turns 50 years old: Provided, further,
That the designation can only be made once.

g) Benefits — refer to those administered by 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 ~ The basic pay or salary received by an employee, pursuant 10
his/her election or appointment, excluding per dies, 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 — The amount payable to the GSIS by the member and the employer in
accordance with Section 10 of this Act;

j) Current Daily Compensation ~ ‘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) ~ 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/retirement/disability/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;

1) Revalued Average Monthly Compensation — 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 — 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 ~ 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;

4) 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;

1) Total Admitted Assets — as used under this Act, refers to the value, as appearing in
the GSIS’ financial statements, of its revenues, income, and other property, less the amount
of its liabilities;


s) Total Length of Service — 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 for retirement under this Act. 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; and

t) Revaluation Factor (RF) — A supplemental amount to the AMC that is calculated
relative to the annual average inflation rate. The revaluation factor shall be periodically
adjusted as may be recommended by the GSIS” Actuary and approved by the Board of
Trustees;

u) Total Income ~ The amount of profit derived from the GSIS’ operations and
investments: Provided, That compulsory and optional premium contributions to the Social
Insurance Fund from both employers and employees shall not form part of GSIS’ total
income.

Il. MEMBERSHIP

THE GsIS
SECTION 4. Compulsory Membership. —

a) All government personnel, whether elective or appointive, irrespective of status of
appointment, provided they are receiving fixed monthly compensation and have not reached
the mandatory retirement age of 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 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 for the purpose of
completing the fifteen (15) years of service required under R.A. No. 8291 to qualify for
retirement benefits;

4) The following government employees are not members of the GSIS:
(1) Uniformed personnel of the Armed Forces of the Philippines (AFP),
Philippine National Police (PNP), Bureau of Fire Protection (BFP) and Bureau
of Jail Management and Penology (BJMP);

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

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

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



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

(1) Members of the Constitutional bodies;
(2) Members of the judiciary, including those with equivalent ranks;
(3) Members of the national prosecution service; and

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

SECTION 5. Optional Membership. — The following shall be given the option to
continue their membership in GSIS, even beyond the mandatory retirement age of 65:

a) An official elected to public office before age 65 but who will reach the mandatory
retirement age of 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 re-
election or election to another public office: Provided, That such period/s of re-election or
election are continuous;

b) An official appointed by the President of the Philippines to public office before age
65 fora fixed term and with a fixed monthly compensation, but who will reach the mandatory
retirement age of 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 re-appointment to another office: Provided, That the period/s of
extension or re-appointment is/are continuous;

©) An official or employee who holds a co-terminus or highly confidential position
who reaches the age of 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.

SECTION 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.

SECTION 7. Members’ Rights.
members shall have the following right

In addition to their rights under existing laws, the

a) Right to courteous and responsive service

(1) To be considered a GSIS member from the first day of government
service;

(2) To be provided prompt and accurate service;


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

(4) To be afforded comfortable and customer-friendly facilities when
transacting with the GSIS.

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

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

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

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

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

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

c) Right to GSIS benefits

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

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

(3) To be protected against discrimination and thus receive the same benefits
and privileges granted other members similarly situated; and

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

d) Right to expeditious processing of claims

(1) To claim and receive on time benefits provided under applicable laws;

(2) To exhaust all legal remedies under existing laws; and


(3) To be protected from diminution of benefits that may arise with the
passage of a subsequent law or regulation.

€) Right to be heard
(1) To be represented in the GSIS governing Board of Trustees (Board);

(2) To participate in meaningful exchanges of
conducted by GSIS without fear of reprisal;

jews, dialogues and fora

(3) To be consulted on the policies and programs to be implemented by the
GSIS;

(4) To convey grievances and be accorded immediate response; and
(5) To transact business with the GSIS in person.

SECTION 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;

©) To be given preference in the dissemination of information pertaining to policies;
and

d) To be accorded leniency in the submission of documents.

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

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

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

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

4) To promptly inform 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.

IL. SOURCES OF FUNDS

SECTION 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 Employer
Compensation 9% 12%

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

b) The employer shall include in its annual appropriation the necessary amounts for
its share of the contributions indicated above, plus any additional premiums that may be
required on account of the hazards or risks of its employees” occupation.

¢) It shall be mandatory and compulsory for all employers to include 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.

SECTION 11. Collection and Remittance of Contributions. —

a) The employer shall report to the GSIS the names of all its employees, their
corresponding employment status, positions, salaries and such other pertinent information,
including subsequent changes therein, if any, as may be required by the GSIS. The employer
shall deduct each month from the monthly salary or compensation of each employee the
contribution payable by hinv/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 and loan amortizations within the first ten (10) days of the calendar month
following the month to which the contributions apply. The collection and remittance by the
employer of the contributions and loan amortizations to the GSIS shall take priority over and
above the payment of any and all obligations, except salaries and wages of its employees.

©) 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.

SECTION 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.


SECTION 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 fail due.

IV. BENEFITS.

"TION 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 assumption/election, including periods of service
at different times under one 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 Civil Service Commission.

b) The computation of actual benefits payable under this Act shall be based on the
total length of service, Provided, However, That computation of benefits prior to June 24,
1997 shall be based on the period/s of service when required premium contributions were
paid.

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
SECTION 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;
) Is at least sixty (60) years of age at the time of retirement; and
c) Is not receiving a monthly pension benefit from permanent total disability.
SECTION 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 basic monthly pension payable monthly for life,
starting upon expiration of the five-year (5) guaranteed period covered by the
cash payment; or
(2) Cash payment equivalent to eighteen (18) months of the member's basic

monthly pension plus monthly pension for life payable immediately with no
five-year (5) 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.

SECTION 17. Computation of the Basic Monthly Pension. —

a) The basic monthly pension is equal to two and one half percent (2.5% of the sum of
the Average Monthly Compensation and Revaluation Factor, multiplied by the total length of
service and taking into consideration Section 14 of this Act: Provided, That the basic monthly
pensions shall not exceed ninety percent (90%) of the average monthly compensation.

b) The basic monthly pension may be adjusted upon the recommendation of the GSIS
actuary, and approved by the Board of Trustees.

SECTION 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

SECTION 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 from permanent total disability.
SECTION 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 and is at least 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 one hundred percent (100%) of
his/her average monthly compensation for each year of service that he/she paid premium
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;

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 basic monthly pension at the time of
resignation or separation, plus an old-age pension benefit equal to the basic monthly pension
payable monthly for life upon reaching the age of sixty (60).



SECTION 21. Effect of Re-Employment in Government Service Afier 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

SECTION 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 18 times the BMP, should he/she opt to avail of the same before reaching the age
of 60; and

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

SECTION 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
1 year but less than 3 years 2 months
3 or more years but less than 6 years 3 months
6 or more years but less than 9 years 4 months
[9 or more years but less than 11 years 5 months
[11 or more years but less than 15 years 6 months

The first payment shall be equivalent to two (2) monthly benefits. A seven (7) day
waiting period shalll 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

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


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

SECTION 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.

SECTION 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) brain injury resulting in incurable imbecility or insanity; and

(5) such other cases as may be determined by GSIS Board of Trustees.

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

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

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

€) Ifa 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.
SECTION 27. Effect of Re-Employment 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 disabil
properly informed the GSIS of his/her re-employment;

ity: Provided, That the member has

b) The disability benefits to be received after re-employment shalll 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;

¢) Failure by the member to inform the GSIS of the re-employment shall result in the
suspension of disability benefits being received.

Permanent Partial Disability Benefits

SECTION 28. Permanent Partial Disability Benefits. ~

a) The following disabilities shall be deemed permanent partial:
(1) Complete and permanent loss of the use of:

any finger
any toe

one arm

‘one hand

one foot

one leg

one or both ears
(viii) sight of one eye

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

b) The member shall receive a cash payment in accordance with a schedule of
disabilities to be prescribed by the GSIS.

Temporary Total Disability Benefits

SECTION 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.

SECTION 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 disability benefit not exceeding
one hundred twenty (120) days in one calendar year after exhausting all his/her sick leave
credits and collective negotiation agreement sick leave benefits, if any, but not earlier than
the fourth day of his/her temporary total disability: Provided, however, That a member
cannot enjoy the temporary total disability benefit and sick leave pay simultaneously:
Provided, further, That if the disability requires more extensive treatment that lasts beyond
one hundred twenty (120) days, the payment of the temporary total disability benefit may be
extended by the GSIS but not to exceed a total of two hundred forty (240) days.


b) The temporary total disability benefit shall in no case be less than One Hundred
Sixty-Five Pesos (P165.00) a day subject to periodic review every three (3) years;

©) 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 GS

SECTION 31. Non-scheduled Disability. ~ For injuries or illiesses 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
SECTION 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
GSIS Board of Trustees and shall be paid upon the death of any of the following:
a) An active member as defined under Section 3(¢) 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

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

4) A retiree who at the time of his/her retirement was of pensionable age under this
Act but who opted to retire under RA No. 1616.

Survivorship Benefits
SECTION 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.

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

a) The basic survivorship pension which is fifty percent (50%) of the basic monthly
pension 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 basic monthly
pension.

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.


SECTION 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({)(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;

(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(£)(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 parenvs, if they are the only qualified beneficiaries, shall receive the
cash payment equivalent to eighteen (18) multiplied by (x) the BMP;

(3) In the absence of a child and the parenu/s, the designated beneficiary, as
defined under Section 3(f)(2)(iii) hereof, if he/she is the only qualified
beneficiary, shall receive the cash payment equivalent to eighteen (18)
multiplied by (x) 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;

¢) 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
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.

4) If at the time of death, the member was separated from the service, the qualified
survivors shall be entitled to:

(1) The survivorship pension if the inactive member has at least fifteen (15)
years of service; or


(2) The cash payment equivalent to one hundred percent (100%) of the AMC
for every year with paid contributions, but not less than twelve thousand pesos
(12,000.00) 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.

ION 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 i in Section 34 of this Act,
subject to the provisions of Section 35 hereof. When the pet ier dies within the five-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

SECTION 37. Compulsory Life Insurance. — All employees, except for those
enumerated under Section 4(e) 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.

SECTION 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.

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

SECTION 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

¥. ADJUDICATION OF CLAIMS AND DISPUTES

‘TION 41. Prescription. — Claims for benefits administered by 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 be subject to the four-
year prescriptive period.

SECTION 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.

SECTION 43. Settlement of Dispute
jurisdiction to settle any dispute regarding cl
other laws administered by the GSIS.

The GSIS shall have original and exclusive
s and benefits arising under this Act and any

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.

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

SECTION 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.

SECTION 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 with in accordance
with the provisions of Section 580 of the Revised Administrative Code.

VI. FUNDS OF THE GSIS

SECTION 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 PD 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 appropriate part of its surplus for each fund under this section to
guarantee the fulfillment of its obligations. The appropriate surplus shall be maintained to
ensure the payment of benefits under this Act and the other GSIS Administered Funds
governed under the above-mentioned laws. The appropriated surplus cannot be used for any
purposes other than those for which they were set aside and appropriated.

The funds administered by the GSIS shall not be used for purposes other than those
provided for under this Act. The Board of Trustees may allocate an amount not exceeding
fifty percent (50%) of the unappropriated 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.

SECTION 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 admitted 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.

SECTION 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 Central Monetary
Authority;

¢) in short-and-medium term loans to members such as salary, policy, educational,
emergency, stock purchase plan and other similar loans: Provided, That GSIS shall lend no
less than forty percent (40%) of the investable 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;

) 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 GSIS Board of Trustees;

i) in domestic mutual funds including investments related to the operations of mutual
funds; and

) in foreign mutual funds and in foreign currency deposits or foreign currency-
denominated debts, non-speculative 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.

SECTION 50. Records and Report 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.

SECTION 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.


SECTION 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 laws to the contrary, the GSIS, its assets, revenues (including all
accruals thereto), transactions and benefits paid shall remain exempt from all forms and kinds
of direct or indirect taxes, assessments, fees, charges or duties imposed by the national or
local government. These exemptions shall continue unless expressly, specifically, and
categorically revoked or repealed, and any assessment against the GSIS as of the approval of
this Act is hereby considered paid and cancelled. Consequently, all laws, ordinances,
regulations, issuances, opinions or jurisprudence contrary to or in derogation of this provision
are hereby deemed repealed, superseded and rendered ineffective and without legal force and
effect

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

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

VII. ADMINISTRATION

SECTION 53. Implementing Body. ~ The Government Service Insurance System as
created under Commonwealth Act No. 186 shall implement the provisions of this Act.

SECTION 54. Powers and Functions of the GSIS. ~ The GSIS shall exercise the
following powers and functions:

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


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

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

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

¢) 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, re-adjust the benefits, contributions, premium rates, interest
rates or the allocation or re-allocation 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 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;

1) 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 Civil
Service rules and regulations: Provided, That all positions in the GSIS shall be governed by a
compensation and position classification system and qualifications standards approved by the
GSIS Board of Trustees based on a comprehensive job analysis and audit of actual duties and
responsibilities: Provided, further, That the compensation plan shall be comparable with the
prevailing compensation plans in the private sector and shall be subject to the periodic review
by the Board no more than once every four (4) years without prejudice to yearly merit
reviews or increases based on productivity and profitability;

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


©) 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 provision of RA 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;

1) 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;

1) 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;

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 socio-economic take-off 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.

SECTION 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. Of these, four (4) shall be active or retired members of the GSIS:
at least one (1) shall be a representative from the teachers recommended by either the
Philippine Public School Teachers Association (PPSTA), the Philippine Association of
School Superintendents (PASS), or by a leading national organization of teachers; at least
two (2) shall be from the leading organizations or associations of government
employees/retirees who possess the ethics, experience and competence to represent the needs
of their sectors; and one (1) shall be a member of the legal profession who at the time of
appointment is also a member of the GSIS. The remaining five (5) shall be recognized
individuals from any of the following fields of expertise: banking and finance, investment,
insurance, law, human resources, audit, management and information technology. The
Trustees shall elect from among themselves a Chairman and a President and General
Manager, who shall automatically be the vice-chairman.

The Trustees, except the President and General Manager who shall cease as trustee
upon his separation, shall hold office for six (6) years to ensure continuity and stability of
programs and policies, or until their successors are duly appointed and qualified: Provided,
‘That one (1) or more members may be replaced every year depending on the annual
performance of the GSIS, subject to applicable laws: Provided further, That 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 remuneration as may be provided by law.

SECTION 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
ercise of the powers and functions as well as the discharge of the duties and
ies of the GSIS, its officers and employees;

effective
responsi

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

4) upon the recommendation of the President and General Manager, to approve the
GSIS’ organizational and administrative structures and staffing pattem 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 R.A. No. 6758, otherwise known as the Salary Standardization Law,
and R.A. No. 7430, otherwise known as the Attrition Law.

6) 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;

£) 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;

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

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

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

SECTION 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 duties and functions under this Act.

‘The GSIS President and General Manager shall be assisted by one 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 Civil
Service rules and regulations.

SECTION 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 existing Civil Service rules and regulations, and prescribe
their duties and qualifications to the end that only competent persons may be employed.

SECTION 59. Auditor. ~

a) The Chairperson of the Commission on Audit shall be the ex officio auditor of the
GSIS and may assign the necessary personnel to assist the chairman of the commission on
audit in the performance of his/her duties; and


b) The Chairperson of the Commission on Audit 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.

SECTION 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.

SECTION 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 of Trustees 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 the two Houses of Congress of the Philippines within five (5) days after the
close of examination.

VIII. GENERAL PROVISIONS
SECTION 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;

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

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

The GSIS may sell its acquired assets in accordance with existing Commission on
Audit (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 ot
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.

SECTION 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.

IX. SANCTIONS.
SECTION 65. Penalty. —

a) The heads of the offices of the national government, its political subdivisions,
branches, agencies and instrumentalities, including government-owned or controlled
corporations 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 (PS00,000.00) 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.

©) 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 they 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.

4) Any employee or member who receives or keeps fund or property belonging,
payable or deliverable to the GSIS and appropriates the same, or takes or misappropriates or
uses the same to any purpose other than that authorized by this Act, or permits another person
to take, misappropriate or use said fund or property by expressly consenting thereto, or
through abandonment or negligence, or is otherwise guilty of the misappropriation of said
fund or property, in whole or in part, shall be punished by a fine of not less than Five


Hundred Thousand Pesos (P500,000.00) nor more than Two Million Pesos (P2,000,000.00)
and by imprisonment of not less than twelve (12) years and one (1) day to twenty (20) years,
and in addition, shall suffer absolute perpetual disqualification from holding public office.

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

£) 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 (P500,00.00) 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 above-mentioned offices and/or personnel may not invoke the defense of non-
suability of the State.

j) It is presumed that all acts of the Board are made in the exercise of their regular
functions. 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.

SECTION 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 Governance Commission on Government-Owned and
Controlled Corporations (GCG) not later than ninety (90) days after the approval of this Act.


SECTION 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, Letters of Instructions, not otherwise
specifically inconsistent with the provisions of this Act.

SECTION 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.

SECTION 69. Non-Conversion of Mode of Retirement. — No change in the mode of
retirement chosen shall be allowed once the proceeds, or a portion thereof, of the member’s
retirement claim under a particular law were received by the member, whether through check,
e-crediting to his or her GSIS eCard/Unified Multi-purpose Identification (UMID) Card, or
such other manner as may be approved by the Board of Trustees.

SECTION 70. 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.

SECTION 11. Separability Clause. — Should any provision of this Act or any part
thereof be declared invalid, the other provisions, so far as they are separable from the invalid
ones, shall remain in force and effect.

SECTION 72. 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.

‘TION 73. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation.

Approved,