Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasan Hills, Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 228

Introduced by
ACT Teachers Party-List Rep. FRANCE L. CASTRO,
BAYAN MUNA Party-List Rep. CARLOS ISAGANI T. ZARATE,
Rep. FERDINAND GAITE and Rep. EUFEMIA C. CULLAMAT,
GABRIELA Women’s Party Rep. ARLENE D. BROSAS,
and KABATAAN Party-List Rep. SARAH JANE |. ELAGO

AN ACT
FURTHER STRENGTHENING THE GOVERNMENT SERVICE INSURANCE SYSTEM

EXPLANATORY NOTE

This measure seeks to revise the Government Service Insurance System (GSIS)
Act (Republic Act No. 8291, as amended). This was House Bill 6904 from the
Fifteenth Congress, approved on Third Reading by the House of Representatives in
plenary on 5 June 2013 after a series of public hearings and consultations. It seeks to
address some of the long-running concerns 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.
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 thousand pesos

3

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RE priveD



(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. 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.

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 nonteaching
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.

5. Provision of an option to unmarried members to designate a beneficiary in
the absence of parents or children.

Approval of this bill is earnestly sought.

Rep. E> Eis T. ZARATE Rep. FERDINAND GAITE

BAYAN MUNA Party-List BAYAN MUNA Party-List
iutomat 1 aaa

Rep. EUFEMIA C. CULLAMAT Rep. ARLENE D. BROSAS

BAYAN MUNA Party-List GABRIELA Women’s Party

Rep. SARAH JANE |. ELAGO
KABATAAN Party-List


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasan Hills, Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 228

Introduced by
ACT Teachers Party- Rep. FRANCE L. CASTRO,
BAYAN MUNA Party-List Rep. CARLOS ISAGANI T. ZARATE,
Rep. FERDINAND GAITE and Rep. EUFEMIA C. CULLAMAT,
GABRIELA Women’s Party Rep. ARLENE D. BROSAS,
and KABATAAN Party-List Rep. SARAH JANE |. ELAGO

P AN ACT
FURTHER STRENGTHENING THE GOVERNMENT SERVICE INSURANCE SYSTEM

Be it enacted by the Senate and 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 2019.”

SECTION 2. Declaration of Policy. — \t 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

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

(a)

(b

(c)

(d}

(f)

GSIS refers to the Government Service Insurance System created by
Commonwealth Act No. 186.

Board refers to the Board of Trustees of the Government Service Insurance
system.

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.

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.

Active member refers to a member who is not separated from the service.
Beneficiaries shall be the following:
(1) For married members:

a. The legitimate spouse; and

b. 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.


(g)

(h

(i)

a)

(k)

(2) For unmarried members:

a 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

b. 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

c. Inthe 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)(I)(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.

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.

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.

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.

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/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-


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(m)

(n

(0)

(Pp)

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(s)

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).

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.

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.

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.

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.

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.

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.

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


B. MEMBERSHIP IN THE GSIS.
SECTION 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:

(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 the GSIS, even beyond the mandatory retirement age
of sixty-five (65):

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

(©) 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.

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. — In addition to their rights under existing laws, the
members shall ha /e the following rights:

(a) Right to courteous and responsive service:


(1) To be considered a GSIS member from the first day of government service;
(2) To be provided prompt and accurate service;
@) 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

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

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

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

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

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

(@) 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


(© 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;

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

(@ 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
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(d) of this Act shall pay three percent (3%) of their monthly
compensation as personal share, and their employers a corresponding three percent
(3%) for their life insurance coverage.

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

(© It shall be mandatory and compulsory for all employers to include 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 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.

(© 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 fall due.

D. BENEFITS
SECTION 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 appointment/election,
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 shall be based on the period/s of service when required
premium contributions were paid: Provided, further, That computation of
benefits of members not compulsorily covered prior to June 24, 1997 shall be
based on the period/s of service when premium contributions were paid.

For the purpose of this Section, the term "service" shall include full-time service with

compensation: Provided, That part-time and other services with compensation may

be included under such rules and regulations as may be prescribed by the GSIS.
RETIREMENT BENEFITS

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

(©) is not receiving a monthly pension benefit for 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 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.

SECTION 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.

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 for 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, 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 (12,000.00). 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).

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

UNEMPLOYMENT BENEFITS

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:

(@) 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

(©) 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

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

SECTION 24. General Conditions for Entitlement. - A member who suffers
permanent disability for reasons not due to his/her grave misconduct, notorious
negligence, habitual intoxication or willful intention to kill himself/herself or another
shall be entitled to the disability benefits provided for in this Act: Provided, That
he/she is in the service at the time of disability or has paid a total of at least one
hundred eighty (180) monthly contributions prior to his/her disability, if already
separated from the service.

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) 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.



(©) 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.

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

(©) 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.

(®) 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 Reemployment on the Disability Benefits Being Received.

(a) Entitlement to permanent total disability benefit shall continue in the event
‘of reemployment and the member's new salary grade, rank or position is
lower than that of his/her previous employment prior to his/her disability:
Provided, That the member has properly informed the GSIS of his/her
reemployment.

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

(©) 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

SECTION 28. Permanent Partial Disability Benefits.


(a) The following disabilities shall be deemed permanent partial:

a

Q)

Complete and permanent loss of the use of:

@ Any finger;

(ii) Any toe;

(ii) One (1) arm;

(iv) One (1) hand;

(vy) One (1) foot;

(vi) One (1) leg;

(vii) One (1) or both ears; and
(viii) Hearing of one (1) ear;
(ix) Sight of one (1) eye; and

Such other cases as may be determined by the GSIS.

(i) 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.

@

(b)

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

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 GSIS.

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

DEATH BENEFITS

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 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

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

(@) 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

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.

SECTION 34. Survivorship Pension. — The survivorship pension shall consist of:

(@ 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


(&) 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.

SECTION 35. Death of a Member. — 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:

(o

(0)

Q)

6)

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;

The qualified children, as defined under Section 3(f)(I)(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

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).

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

a)

(2)

@)

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;

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

In the absence of a child and the parent/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) the BMP: Provided, however, That if the
designated beneficiary is a child, he/she shall be entitled to pension
equivalent to ten percent (10%) of the BMP until he/she reaches the
age of majority.

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

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

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

2) The cash payment equivalent to one hundred percent (100%) of the
AMC for every year with paid contributions, but not less than Twelve
thousand pesos (P12,000.00) 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.

SECTION 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

SECTION 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.

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
Commission.

E ADJUDICATION OF CLAIMS AND DISPUTES

SECTION 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.

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 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.

SECTION 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.


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.

rR 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":

(@) 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;

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

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

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

The funds administered by the GSIS shall not be used for purposes other than those


provided for under this Act. The Board may allocate an amount not exceeding fifty
percent (50%) of the unassigned surplus from any of the GSIS-Administered Funds,
except the Employees’ Compensation Insurance Fund, to the Social Insurance Fund:
Provided, That the amount shall be used solely to meet the required reserves to fulfill
the obligations of the GSIS to its members: Provided, further, That it is approved by
the President of the Philippines, upon the recommendation of the Governance
Commission for Government- Owned and -Controlled Corporations (GCG).

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

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 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.

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 Bangko Sentral ng
Pilipinas;

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;

(©) 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;

(© 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 underthe 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;

(® 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 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.


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

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

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

G. ADMINISTRATION

SECTION 53. Implementing Body. — The GSIS, 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;

(@) 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, 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;

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

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

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

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

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

(®) Submit annually, not later than June 30, a public report to the President of
the Philippines and the Congress of the Philippines regarding its activities in


the administration and enforcement of this Act during the preceding year
including information and recommendations on Board policies for the
development and perfection of the programs of the GSIS;

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

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

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

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

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

(x) Design and implement programs that will promote and mobilize savings and
provide additional resources for social security expansion and at the same
time afford individual members appropriate returns on their


savings/investments. The programs shall be so designed as to spur
socioeconomic takeoff and maintain continued growth; and

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

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

The Trustees shall hold office for one (1) year, until successors are duly appointed, as
provided for in Republic Act No. 10141, otherwise known as the Governance Act.
Vacancy, other than through the expiration of the term, shall be filled for the
unexpired term only. The members of the Board shall be entitled to a per diem of
Two thousand five hundred pesos (P2,500.00) for each board meeting actually
attended by them, but not to exceed Ten thousand pesos (P10,000.00) a month and

reasonable transportation and representation allowances as may be fixed by the
Board.

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 effective exercise of the powers and functions as well as the discharge

of the duties and responsibilities of the GSIS, its officers and employees;

(©) 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;

(@ 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;

(© 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;

(6) 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.

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/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.

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
the existing CSC 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 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.

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 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
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 Republic
Act No. 1616 which function shall be vested in the agencies concerned, who
shall process and pay the gratuities of their employees. The GSIS shall process
and adjudicate only the refund of retirement premium under Republic Act No.
910. The Board shall adopt the proper rules and procedures for the
implementation of this provision.

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 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.

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.

1. SANCTIONS
SECTION 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
(500,000.00) nor more than Two million pesos (P2,000,000.00) and by
imprisonment of not less than six (6) years and one (1) day to twelve (12)
years and, in addition, shall suffer absolute perpetual disqualification from
holding public office.

(f

Whoever shall obtain or receive any money or check invoking any provision of
this Act or any agreement hereunder, without being entitled thereto with the
intent to defraud any member, any employer, the GSIS or any third party, shall
be punished by a fine of not less than Five hundred thousand pesos
(P500,000.00) nor more than One million pesos (PI,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.

i)

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 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 and 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. 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 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.

SECTION 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.

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

Approved,