FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 906 
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INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
Republic Act 1616 was enacted in 1957 to amend Commonwealth Act 186 
which provides for the government employees' retirement benefits. It, likewise, 
introduced Gratuity retirement mode, a new scheme of paying retirement benefits 
which is a one-time payment to be made by the last employer of the retiree. 
The Gratuity retirement mode was implemented to accommodate younger 
government employees who have not yet reached the minimum number of years 
of service required for them to qualify for the Old-Age Pension for Life retirement 
mode. However, because of the ambiguous phraseology of RA 1616, instead 
of its application being restricted to younger employees as intended, government 
employees who were already legally qualified to retire under the Old-Age 
Pension for Life retirement mode were also covered by the said law. 
This 
ambiguity became prejudicial to the latter because they were granted gratuity 
when they were already qualified to receive old-age pension for life. 
While the deleterious provision of RA 1616 was impliedly phased out 
under Presidential Decree 1146, there has been no law enacted categorically 
repealing the subject provision thus causing further inequity. 
Even with the 
passage of the new law on government retirement benefits, R.A. 8291, the said 
provision still stands. 
. 
In order to address the flaws in R.A. 1616, the passage of this bill is 
earnestly requested. Retirees who were prejudiced under R.A. 1616 shall be 
compensated by allowing them to convert their mode of retirement to the more 
beneficial Old-Age Pension for Life retirement with survivorship benefits. 
Fundir)g for the implementation of the law is proposed to be generated from a 
portion of the GSIS Residual Actuarial Reserve, part of which accumulated from 
the payments (and the investment earnings thereon) that were saved by the 
GSIS for not having paid the retirees qualified to receive old-age pension for life 
who were instead paid a measly one-time lump sum by their employers. 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 9 0 6 
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INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
GRANTING OLD-AGE PENSION FOR LIFE TO SENIOR CITIZENS WHO 
RETIRED UNDER REPUBLIC ACT 1616 AS WELL AS SURVIVORSHIP 
BENEFITS TO THEIR SURVIVORS 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Declaration of Policy. It is the declared policy of the State 
to promote and provide a rising standard of living and an improved quality of life 
for all. In pursuit of such policy, the State recognizes the need and so undertakes 
to grant old age pension for life to senior citizens who retired under Republic Act 
1616, as well as survivorship benefits to their survivors who are otherwise 
deprived thereof, in order that such pension would be responsive to their 
increasing needs. 
SEC. 2. Coverage. This Act shall cover senior citizens who retired under 
RA 1616 effective June1, 1977 and thereafter. 
SEC. 3. Change of Mode of Retirement. An employee who retired not 
earlier than June 1, 1977 under RA 1616'but who is otherwise qualified to retire 
under RA 660 or PD 1146, shall hereafter automatically have this gratuity 
retirement converted to a pension system of his choice under existing laws that is 
more beneficial to him, and thereafter shall receive the old-age pension for life as 
well as the survivors' benefits for this survivors provided under such laws. 
Additionally, the retiree or his survivors shall no longer be required to reimburse 
to the Government Service Insurance System (GSIS) the retirement gratuity 
previously received by him from his last employer as well as the refunds from the 
GSIS of the personal and employer's premium as the case rnay be but shall be 
considered as partial payment by the GSIS to the retiree under the pension law 
of his choice. 
SEC. 4. 
Status of the Converted Senior Citizen-Retiree. 
Upon 
approval of this Act, the status of the converted senior citizen - retiree shall, for 
all intents and purposes, be the same as though he has originally retired under 
the annuity Pension System, and henceforth be accorded all the present and 
future benefits and privileges accruing to a retiree under the annual Pension 
System. However, if an R.A. 1616 retiree prefers not to be converted under this 
Act, then he shall so state in writing to the GSIS. 


SEC. 5. Funding. Such sum as may be necessary for the payment of the 
retirement/survivorship benefits under Section 3 of this Act, shall be charged 
against the accumulated aggregate residual actuarial reserves as established 
pursuant to Section 24 (b) of Commonwealth Act 186, as amended, that the 
GSIS essentially saved from not being required to pay the old-age pension for 
life, as well as the survivorship benefits of thousand of R.A. 1616 retirees whose 
lump sum gratuity was each paid instead by his employer effective from the time 
R.A. 1616 took effect on May 31, 1975. 
SEC. 6. Implementing Guidelines. The GSIS, in connection with the 
Department of Budget and Management, shall issue the necessary guidelines for 
the implementation of this Act not later than sixty (60) days after the approval 
hereof. 
SEC. 7. 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 full force and effect. 
SEC. 8. 
Repealing Clause. All laws, presidential decrees, letter of 
instruction, executive orders, rules and regulations or parts thereof inconsistent 
with the provisions of this Act are hereby repealed or modified accordingly. 
SEC. 9. Effectivity Clause. This Act shall take effect upon its approval. 
Approved,