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Second Regular Session

House Bill No. 4940

Introduced by REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

Every worker has to think of his security when the time comes that he
has to retire from work, whether compulsorily or voluntarily. It is a future
contingent event that a worker or employee has to consider and plan for at
the earliest possible time. A good retirement and pension plan is insurance
for the future. And, it is often viewed as a wise investment into one’s
security in one’s twilight ye

Recognizing this need of workers and employees, the law has
mandated the State, in partnership with employers, to provide for viable
social security systems for both private employees and workers in the public
sector. Pursuant thereto, the Social Security System (SSS) for private
employees and the Government Service Insurance System (GSIS) for
government workers have been established. Currently, the SSS has 1.9
million retired members, while the GSIS has roughly 250,000 active
pensioners all over the country.

Under both security systems, workers contribute regular premiums
during their period of employment and with counterpart share from their
respective employers. These contributions entitle them to benefits as
members under the system, in particular, to specific pension plans at the
time of their retirement. Varying amounts of pension are then given to
pensioners on a monthly basis depending on the total amount of their
contributions.

While existing laws allow for adjustments to be made on the basic
monthly pensions, experience has shown that such adjustments often lag
behind the much faster increases in the rate of inflation resulting to the
erosion of the real values of the pensions received by the retirees. This
situation, if unabated will defeat the very purpose of the security system as
well as of the policies and objectives of the law.


Thus, this bill seeks to provide for the automatic adjustment of the
basic monthly pensions of retirees both covered by the SSS and the GSIS
based on the prevailing cost of living index as determined by the National
Economic and Development Authority (NEDA). It aims to ensure that our
retirees will be able to sustain their needs and live a decent life in the
twilight stage of their lives.

For the foregoing reasons, the immediate consideration ang/fassage of
this bill is earnestly urged.

ARTHPR C/YAP
Representative


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

House Bill No. 4940

Introduced by REPRESENTATIVE ARTHUR C. YAP

AN ACT
PROVIDING FOR AUTOMATIC ADJUSTMENT OF
THE BASIC MONTHLY PENSION FOR RETIRED
PERSONNEL COVERED BY THE GOVERNMENT
SERVICE INSURANCE SYSTEM AND THE SOCIAL
SECURITY SYSTEM TO THE PREVAILING COST OF
LIVING INDEX

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

SECTION 1. Title - This Act shall be known as the ‘Automatic
GSIS and SSS Pension Adjustment Act’.

SECTION 2. Automatic Pension Adjustment. - The basic monthly
pension of members covered by the Government Service Insurance System
(GSIS) and the Social Security System (SSS) shall be automatically adjusted
to the prevailing cost of living index as determined by the National
Economic and Development Authority (NEDA).

SECTION 3. Extent of Coverage. - The benefits provided for in
this Act shall extend to all GSIS and SSS pensioners still surviving at the

time of its approval.


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SECTION 4. Implementing Rules and Regulations. - The GSIS
and the SSS, as the case may be, shall issue the rules and regulations
necessary for the effective implementation of this Act.

SECTION 5. Appropriation. - Such amount necessary for the
implementation of this Act shall be charged to the State Insurance fund of
the GSIS and to the Reserve Fund of the SSS, respectively.

SECTION 6. Separability Clause - If any of the provisions of this
Act is declared invalid or unconstitutional, the remaining parts or provisions
hereof not affected thereby shall remain in full force and effect.

SECTION 7. Repealing Clause. - All laws, decrees, executive
orders, proclamations, rules and regulations, and issuances, or parts thereof,
inconsistent with the provisions of this Act are hereby repealed or modified
accordingly

SECTION 8. Effectivity Clause. - This Act shall take effect fifteen
(15) days afier its publication in at least two (2) national newspapers of
general circulation.

Approved.