Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

Housé Bill No._ 4395

Introduced by AKBAYAN Representatives
Ibarra “Barry” M. Gutierrez [1 and Walden F. Bello

EXPLANATORY NOTE

“The Government Service Insurance System was cteated in 14 November 1936 by virtue

of Commonwealth Act No. 186 to ensure that government employees who have

dedicated their lives to public service are taken care of once they retire. To pursue this

s Ch:

mandate, the System

Act No. 660, Republic Act No. 1616 and, the lat

rter was amended by Presidential Decree No. 1146, Republic
t, by Republic Act No. 8291 (Revised

Government Service Insurance System Act of 1997). All these amendments have the objective

of providing better benefits to public servants.

With 1,649,330 active members, 113,883 survivorship pensioners, and 245,156 old age
pensioners, the Government Service Insurance System is perhaps the most effective way
by which the State protects employees in the public sector from socio-economic impacts
of old age, death, loss of job and disability a State mandate pursuant to Article XII
(Social Justice and Human Rights), Section 3 of the 1987 Philippine Constitution, which
-directs the State to afford full protection to labor. Public servants rely heavily on the
System's mechanisms on pension, life insurance, disability insurance, employees’
compensation, burial benefits, survivorship benefits and accessible loans to cushion the

impact of such contingencies.

Sixteen years hence, this bill introduces amendments to Republic Act No. 8291 to make

it more responsive to the changing needs of the System and its members. It further


reinforces the value of the contribution of government workers-membets, specifically of
the organized public sector unions by introducing membership rights. It strengthens the
participation of workers-members in the developing and crafting policies of the System.
“This bill proposes measures to further the rights of workers-members towards a more

responsive, efficient and profes

sional System

the right to be heard through institutionalization of regular

‘ore to the bill of rights i

interactions with public sector union, employees’ and retirees’ organization and other
stakeholders, a mechanism which would not only enable workers-members to voice out

their issues and concen

but also capacitate the System to formulate policies which are

more responsive to need of workers-members.

ments which would

‘This bill further introduces the notion of

socially

ponsible inv
not only provided the System of opportunities for high returns but would also make it a
policy of the System to invest in activities that would contribute to the building better

communities, ensuring the protection of human rights, and working towards a

stainable environment.

‘The introduction of harsher penalties and the enumeration of acts inconsistent with the

System's objective of promoting workers-members rights are also introduced to deter
further violations, primarily with regard to the failure to remit premium and loan

amortizations of members by employers-agencies.

This bill will increase the coverage and amount of certain benefits to address the

changing times and need of the System's members. In view of the foregoing, the

immediate passage of this bill is earnestly sought.

IBARRA “BARRY” M, ERREZ Ul WALDEN F. BELLO


9
10
u
12
13
14
15
16

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Sixteenth Congress
First Regular Session

House BillNo._ 4895

Introduced by AKBAYAN Representatives
Ibarra “Barry” M. Gutierrez III and Walden F. Bello

AN ACT
FURTHER STRENGTHENING THE GOVERNMENT SERVICE INSURANCE
SYSTEM

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

SECTION 1. Short title—This Act shall be known as the “Government Service Insurance System

Aat 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. Likewis

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:

(@) Ensure the adoption of policies beneficial to GSIS members, paving the way for a

responsible, integrated and transparent social security

(b) Provide greater representation for members at the highest policy-making level of the GSIS;


(© Insulate the Social Insurance Fund 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

the context otherwise

SECTION 3. Definition of terms—As used in this Act, and unless

indicates:

(a) ‘Government Service Insurance System? or ‘GSIS shall refer to the system created under

Commonwealth Act No. 186.

(b) ‘Board shall refer to the Board of Trustees of the GSIS.

(©) ‘Employer’ refers to the national government, its political subdivisions, branches, agencies or
instrumentalities, including, government-owned or -controlled corporations, and financial
institutions with original charters, the Congress of the Philippines, the Constitutional

Commissions and the Judiciary.

(A ‘Employee’ ot ‘Member’ refers to any person, receiving compensation while in the service of an
employer, as the latter is defined in this Section, whether by election or appointment:
Provided, ‘That employees or members who are occupying appointive positions are considered
employees or members regardless of the status of their appointment: Provided, further, That
elected barangay and sanggunian officials are included in the term employee or member:

Provided, finally, That such employee or member does not fall under Section 4(d) of this Act.

“Adtive Member refers to a member who is not separated from the service.

(D) ‘Beneficiaries’ refer to the following:

(1) For married members:


16

@

‘The legitimate spouse; and
All legitimate, legitimated, legally adopted and illegitimate unmarried child:
Provided, That the child shall not be over the age of majority: Provided, however, That
a child who is a person with disability and who is incapable of self-support due to
a mental, physical or sensory impairment can still be a beneficiary regardless of age:
Provided, finaly, ‘That such a mental or physical impairment was acquired or is

present before the person with disability reached the age of majority.

(2) For unmarried members:

@

All legitimate, legitimated, legally adopted and illegitimate unmarried child:
Provided, That the child shall not be over the age of majority: Prowided, further, That

a child who is a person with disability and who is incapable of self-support due to

ary regardless of age: Provided,

4 mental ot physical impairment can still be a beng
finally, That such a mental or physical impairment was acquired or is present
before the person with disability reached the age of majority;

In the absence of children, the parents; or

In the absence of either (j) and (i), 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 paragtaph (f)(1)(ti) of this
Section: Provided, That the designation must be made before the member turns

fifty (50) yea

s old: Provided, further, That such a designation can only be made

once.

(3) A dectee of legal separation shall operate to disqualify the legitimate spouse as

beneficiary under this Act, consistent with the provisions of Article 63(4) in relation to
Section 43(1) of Executive Order No. 209 otherwise known as The Family Code of the
Philippines.

A person who is deemed a beneficiary under the definitions in this Section shall likewise be

disqualified after the member disinherits such a person or after such person is deemed to be

unworthy to succeed.


(h)

@

0)

)

Such a disinheritance and unworthiness may be (a) effected in a probated will, which shall
specify the ground for disinheritance in compliance with Article 916, such grounds thereof
are understood to be provided for in Articles 919 (disinheritance of legitimate and
illegitimate children and descendants), 920 (disinheritance of legitimate and illegitimate
parents or ascendants) or 921 (disinheritance of a spouse), of Republic Act No. 386
otherwise known as the Civil Code of the Philippines, or (b) proved and effected by a court
dectee of incapacity to succeed the member by reason of unworthiness under the grounds in

Article 1032 of Republic Act No, 386 otherwise known as the Cini! Code of the Philippines.

“Bengits refers 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.

‘Compensation’ refers to the basic pay or salary received by an employee, pursuant to clection
or appointment: Provided, That the term does not include per diems, bonuses, overtime pay,

honoraria, allowances and any other emoluments received in addition to the basic pay and

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’ ox refers to the amount arrived at after dividing the aggregate
compensation received by the member during the last thirty-six (36) months of service
preceding separation, retirement, disability or death by thirty-six (6): Provided, That for
employees ox members receiving compensation for less than thirty-six month (36), the amount
shall be equal to the total compensation received: Provided, further, ‘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, and as determined by the

actuary of the GSIS.


tau keDn

29

©) ‘Revalved Average Monthly Compensation xefers to an amount equal to one hundred seventy
percent (170%) of the first One Thousand Pesos (PhP 1,000.00) of the average monthly
compensation plus one hundred percent (100%) of the average monthly compensation in

excess of One Thousand Pesos (PhP 1,000.00).

(m) ‘Pensioner’ refets 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.

(a) ‘Disability’ refers to any loss or impairment of the normal functions of the physical or mental
faculty of a member which reduces or eliminates the capacity to continue with current

gainful occupation.

(0) ‘Permanent Partial Disability refers to « condition accruing or arising from 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 refers to a condition accruing or arising from injury or disease
which causes complete, itreversible, and permanent incapacity permanently disabling a

member to work or engage in the same occupation resulting in loss of income.

(@ ‘Temporary Total Disability refers to a condition accruing or arising from the impaired physical
or mental faculties can be rehabilitated or restored to their normal functions whenever such

disability results in temporary incapacity to work or engage in any occupation,

(©) ‘Total Admitted Asset? refers to the value, as appearing in the GSIS’ financial statements, of its

revenues, income, and other property, less the amount of its liabilities.

© ‘Lotal 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

cligibility of a member for retirement under this Act. Total length of service includes fulltime



26
27
28
29
30
31
32
33

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.

() ‘Reraluation Factor refers to the supplemental amount to the average monthly compensation that is
calculated relative to the annual average inflation rate. The revaluation factor shall be
petiodically adjusted as may be recommended by the GSIS actuary and approved by the

Board of Trustees;

(u) ‘Total Income’ tefers to 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.

B, MEMBERSHIP IN THE GSIS

SECTION 4. Compulsory membership —

¢ of status of

(a) All government personnel, whether elective or appointive, irrespe:
appointment, provided they ate 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

red.

government agency ate also compulsorily co

(© 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 ot has been extended by the Civil Service Commission for the purpose of
completing the fifteen (15) years of service required under Republic Act No. 8291 (otherwise
known as the Revised GSIS Act of 1977) to qualify for retirement benefits.

(@ The following government employees are not members of the GSIS:


we D

(1) Uniformed personnel of the Armed Forced of the Philippines, Philippine National
Police, Bureau of Fire Protection and Bureau of Jail Management and Penology;

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

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

(4) Personnel who are not receiving fixed monthly compensation or do not have monthly

regular hours of work.

(©) 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 other 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
e (65):

their membership in GSIS, even beyond the mandatory retirement age of sixty

(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 the term. The elective official shall be
allowed to continue paying life and retirement premiums until the end of the term, including
any periods of re-election of election to another public office: Pronided, That such periods of

re-election 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 tenure. ‘The appointive official shall be
allowed to continue paying life and retirement premiums until the end of the tenure,
including any periods of term extension or re-appointment to another office: Provided, That

the periods of extension or re-appointment are continuous.


ii
2
3
4

(© An official or employee who holds a co-terminus 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 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 have the following rights:

(a) Right o professional, 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 all employees and personnel of the GSIS;
and
(4) To be afforded comfortable and customer-friendly facilities when transacting with the

GSIS,

(©) Right to accurate and timely information.

(1) To be informed of the laws, regulations, policies or programs affecting the members’
tights, 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;

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

(5) Yo have GSIS data and records protected from unauthorized, unlawful, or improper

disclosure; and


1 (© To be informed in advance of documents required to facilitate transaction, processing

2 period, and updated status of claims or loan applications.

3 (1) To receive a clear and prompt reply to queries forwarded to GSIS offices.

4

5 (6) Right to GSIS benefits.

6

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

8 the service;

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

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

15 (4) To receive benefits exempt from all taxes, fees, charges and duties of all kinds except for
16 monetary liabilities due to the Social Insurance Fund: Provided, ‘That members are given
17 sufficient options on how to settle their monetary liability with the GSIS upon their
18 separation or retirement from government service

19 (6) To be protected from the failure of the employer to deduct or remit, or from deficiency
20 or delay in remittance, of premium payments to the GSIS.

2

22 (a) Right o expeditions processing of claims and loans.

23

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

25 (2) To have accessible systems for the processing of applications for claims and loans;
26 3) To transact business with the GSIS in person of through electronic access points;
27 (4) ‘To exhaust all legal remedies under existing laws;

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

30 (©) To transact business with the GSIS in person.

31

32 (©) Right 0 be heard.

33

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


wren

9
10
rT
12
13
14
15
16
17
18
19

20

2) To have meaningful exchange of views, dialogues and forums with the GSIS through the
institutionalization of regular interactions with public sector unions, employees’ and
retirees organizations, and other stakeholders; and

(3) To have access to a grievance mechanism where members can convey their complaints

and issues, and be accorded immediate response.

SECTION 8. Special rights for the elderly, persons with disabilities, and seriously-ill
members, pensioners and beneficiaries —Vhe following special rights are to be afforded to

the elderly, persons with disabilities and seriously-ill members, pensioners and beneficiatiest

(a) ‘To be provided special access lanes;
(b) To be prioritized in the processing and releasing of claims and benefits;
(©) To be given ptefetence in the dissemination of information pertaining to policies; and

(@ To be accorded leniency in the submission of documents.

SECTION 9. Agencies/Employers’ Responsibilities.

by this Act, as employets, shall have the following responsibilities

The government agencies covered

(a) To prioritize deduction and remittance of employees’ and employer’s contributions to the
GSIS, loan amortizations and other members’ accounts within the prescribed time mandated
by law, and rules and regulations;

b) To promptly provide documents required to facilitate the processing of claims and loans;
promptly f ed P! ig

(0) To maintain accurate service records of their employees;

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

(©) To promptly inform GSIS of any update pertaining to personal ot 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:

10


ry

wee

30
31

32

Percentage of monthly compensation payable by

Monthly compensation

Member: 9% Employer: 12%

Members who ate 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

ate or exact amount of contributions on time, or delay the 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, theit 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 ot compensation of each employee the
contribution payable by the employee 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 amottizations 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.

11



(© All outstanding government share premium contributions which are 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 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: Provided, That 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 —

@) The computation of total length of service for the purpose of determining a member's
cligibility to the benefits payable under this Act shall be based on the service rendered
starting from the date of original appointment/clection, including periods of service at
different times under one or mote 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, In cases where contributions have not been paid ot remitted, computation of

benefits shall be based on period/s of service when required premium contributions were

paid.

RETIREMENT BENEFITS

SECTION 15. General conditions for entitlement—A member who tetites from setvice
shall be entitled to the retirement benefits enumerated in Section 16(a) hereof: Provided, That the

member:


ry

a
4
5

(a) Has rendered at least fifteen (15) years of service;
(b) Is at least sixty (60) years of age at the time of retirement; and

(c) Is not receiving a monthly pension benefit 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
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

year (5)

pension plus monthly pension for life payable immediately with no fiv

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 —

(@) 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

Provided, That the basic monthly

service and taking into consideration Section 14 of this A

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.

13


eon

ae

10
rt

13
14
15
16
17
18
19
20
24

29
30
31
32
33

SECTION 18. Periodic pension adjustment—tThe 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.
1g Be iE} y

SECTION 20. Separation benefits —The separation benefit shall be paid as follows:

(@) 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 ot separation, such member

shall be entitled to a one-time cash payment equivalent to one hundred percent (100%) of

the average monthly compensation for each year of service with paid premium contributions,

ime cash

but not less than twelve thousand Philippine pesos (PhP 12,000.00). The one.
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 ot 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 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

14


wend

20

a

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 office ot 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;

(©) Has not been paid the voluntary separation benefit equivalent to one-time cash payment or

is to avail

eighteen (18) times the Basic Monthly Pension, should the option of the member

of the same before reaching the age of sixty (60) years; and
(© Has not availed of any early retirement program as a result of the 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 mote years but less than six (6)
® 7 © ‘Theee (3) months
years

Six (6) of more years but less than nine
: w) Four (4) months
years

Nine (9) ot more yeats but less than eleven.
Five (5) months
(11) years

leven (11) or more years but less than fifteen

Six (6) months
(15) years

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

shall be imposed on succeeding monthly payments.

15


r

awe

All accumulated unemployment benefits paid to the employee during the 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 teasons not due to his grave misconduet, notorious negligence, habitual
intoxication, ot willful intention to kill one’s self or another, shall be entitled to the disability
benefits provided for in this Act: Provided, That the member 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 ate 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 —
(@) The following shall be deemed permanent and total disabilities:

(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 case as may be determined by the GSTS Board of Trustees.

(&) The member shall receive 2 month income benefit for life equal to the basic monthly

pension effective from the date of disability

16


aa uw sk ow

16
17
18
19

20

(© A cash payment equivalent to eighteen (18) times the basic monthly pension shall also be
given if the member is in the service at the time of disability and 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.

(©) 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 the disability, the cash payment equivalent to

one hundred percent (100%) of the average monthly compensation for each year of service
he/she paid contributions, but not less than twelve thousand Philippine pesos (PhP

12,000.00), which should haye been the separation benefit, shall be advanced to the member.

() Unless the member has reached the minimum retirement age at the time of disability,

entitlement to permanent total disability benefit shall be suspended when:

(1) The member recovers from disability as determined by the GSIS, whose decision shall be
final and binding; or

2) The member fails to undergo medical examination when requited 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 the previous
employment prior to disability: Provided, That the member has properly informed the GSIS of

the fact of re-employment;
(b) The disability benefits to be received after re-employment shall be adjusted by the GSIS and
is to be computed as the difference between the amount of the existing disability benefit and

the member's salary from his/her new employment;

(©) Deliberate failure by the member to inform the GSIS of the re-employment shall result in

the suspension of disability benefits being received.

7


©

ao

29
30
31
32
33

PERMANENT PARTIAL DISABILITY BENEFITS

SECTION 28. Permanent partial disability benetits—

(@) The following shall be deemed petmanent partial disabilities:

(1) Complete and permanent loss of the use oft

@ Any finger,

(i) Any toe,

(ii) One arm,

(v) One hand,

() One foot,

(vi) One leg,

(vii) One or both eats, and

(viii) Sight of one eye.

Board of Trustees.

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

(©) ‘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 29. Temporary total disability benefit —
G@) A member shall be entitled to seventy-five percent (75%) of the current daily compensation

for each day or fraction thereof of temporary disability benefit not exceeding one hundred

twenty (120) days in one (1) calendar year after exhausting all sick leave credits and collective

18


BON

26
27

29
30
31
32
33
34

negotiation agreement sick leave benefits, if any, but not earlier than the fourth day of the
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 hundted sixty-five
Philippine pesos (PhP 165.00) a day: Provided, That this amount is 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

shall determine the

listed in the schedule of partial or total disabilities provided herein, the GSIS

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
Philippine pesos (PhP. 30,000.00): Provided, That it shall be adjusted after five (6) 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:

(@) An active member as defined under Section 3(¢) of this Act; or

() 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

19


32
33
34

(@ A retiree who at the time of retirement was of pensionable age under this Act but who opted

to retire under Republic Act No. 1616 (“Take All Option”)

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.

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

@ ‘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 (6) 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 of pensioner shall apply. Any subsequent increases 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 matried member was in active service and has rendered at least

fifteen (15) years of service:

(1) The legitimate spouse, if the sole beneficiary, shall receive the cash payment equivalent
to eighteen (18) multiplied by the basic monthly pension and the basic survivorship
pension for life;

@ The qualified childsen, as defined under Section 3(f)(1)(i) of this Act, if the only

beneficiaries, shall be entitled to pension equivalent to ten percent (10%) of the basic

20


Sew au een

10
iM

13
14
15
16
17
18
19

28
29
30
31
32
33

monthly pension for each child but not to exceed fifty percent (50%) of the basic
monthly income;

@) When the survivors are the legitimate spouse and the qualified children, the legitimate
spouse shall receive the cash payment equivalent to eighteen (18) moltplied by the the
basic monthly pension and the basic survivorship pension, and the qualified children

shall receive the children’s pension mentioned in subparagraph (a)(2) of this Section.

(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:

(A) When the qualified children, as defined under Section 3(6)(2)i) of this Act are the only
beneficiaties, 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 basic monthly pension;

(2) When the parents are the only qualified beneficiaries, they shall receive the cash payment
equivalent to eighteen (18) multiplied by the basic monthly pension;

(3) In the absence of a child and of the parents, the designated beneficiary, as defined under
Section 3(0(2)(ii) of this Act, if qualified, shall receive the cash payment equivalent to
cighteen (18) multiplied by the basic monthly pension: Provided, however, That if the
designated beneficiary is « child, such child shall be entitled to a pension equivalent to
ten percent of the basic monthly pension: Provided, further, that this entitlement should

last only until such child reaches the age of majority,

(6) Uat 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 average monthly compensation for every year of service but not less
than twelve thousand Philippine pesos (PhP 12,000.00), to be computed in accordance with

Section 14 of this Act.

(@) If.at the time of death, the member was separated from the service, the qualified survivors

shall be entitled to:

(A) ‘The survivorship pension if the inactive member has at least fifteen (15) yeats of services

or

2


Awe ne

20

(2 The cash payment equivalent to one hundsed percent (100%) of the average monthly
compensation for every year with paid contributions, but not less than twelve thousand
Philippine pesos (PhP 12,000.00): Provided, That 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 separation benefits 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-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(@) of this Act, shall, under such terms and conditions as may be promulgated by

ically take effect on

the GSIS, be compulsorily covered with life insurance, which shall autos

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 C

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 the member and/or dependents. Any employer may likewise apply for group insurance
coverage for its employees. The insured, the employer, and/or any person, acceptable to the

may make the payment of the premiums or installments for optional insurance and pre-

need products.

22


en

S

6

20

29
30,
34
32

34

SECTION 40, Reinsurance —The GSIS may reinsure any of its interest oF part thereof with
any private company of geingurer 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(@) of this Act shall not preseribe: Provided, bower, 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

and claims for benefits under this Act and any other

facilitate payment of benefits, proceed
laws administered by the GSIS. Payments made by the GSIS prior to its seceipt of an adverse
claim, to a beneficiary of claimant subsequently found not entitled thereto, shall not bar the legal

and eligible recipient 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 of its member ot an official of the GSIS, who is a lawyer, ro act as
heating officer to receive evidence, make findings of fact and recommendations. Such findings
of fact and all documentary and testimonial evidence, shall be submitted to the Board within
thirty (0) 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
heating officers findings and recommendations. The cases heard directly by the Board shall be
decided within thirty @0) working days from the time they ate submitted by the patties for

decision.
SECTION 44, Appeals—Decisions of the Board of Trustees shall be appealable to the Court

of Appeals. The pendency of an appeal shall not stay the execution of the award or decision,

‘unless such is ordered by the Court of Appeals ot by the Supreme Court.

23


16
17
18
19
20
21
22
23
24
25
26
21
28
29
30
31
32
33
34

SECTION 45. Execution of decision—When no appeal is perfected and there is no order to
stay execution is issued by the Board, the Court of Appeals, or the Supreme Court, any decision
or award of the Board shall be enforced and executed in the same manner as decisions and final

orders of regional trial courts.

For this purpose, the Board shall have the power to issue such writs of execution, addressed to
the city or provincial sheriff or its appointed sheriff, 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
cutive Order No. 292 series of 1987

(Powers incidental to the taking of testimony) of

(otherwise known as the Revised Administrative Code of the Philippines).
F, 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 Social Insurance Fund shall be used to finance the benefits administered by the

GSIS under this Act.

In addition to the Social Insurance Fund, the GSIS shall administer the following funds,
collectively as the “GSIS-Administered Funds,” to wit:

(a) The Optional Insurance Fund for the insurance coverage described in Section 39 hereof;

24


v

(6) The I’mployees’ Compensation Insurance Fund ereated 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 oF pessons who

render services to the government.

“the GSIS shall appropriate part of the surplus of the Optional Insurance Fund, General
Insutance Fund and other special funds under this Section to the Social Insurance Fund to
guarantee the fulfilment of its obligations. The appropsiated surplas 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 pereent (50%) of the

unappropriated surplus from any of the GSIS-Administered Funds to the Social Insurance Fund:
Provided, That these do not come from the Employees’ Compensation Insurance Fund: Provided,
Jther, That the amount shall be used solely to meet the required reserves to fulfill he obligations
of the GSIS to its membess: Provided, finaly, That such an allocation over the wnapproptiated

surplus is approved by the President of the Philippines.

No portion of the funds of the GSIS or income theteof 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 accotdance with law. A maximum expense
loading of twelve percent (12%) of the yensly total income and zero point seven percent (0.7%)

of the total admitted assets may be disbursed for administrative and operational expenses except


20

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 need 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 investment shall optimize the requirements of
liquidity, safety or security and yield as embodied in formal investment policy guidelines
approved by the Board in order to ensure the actuarial solvency of the funds: Promided, further,

‘That the GSIS shall develop policies and strategies for socially responsible investments:
finally, That the
Congress of the Philippines, to wit:

-rovided,

{SIS shall submit an annual report on all investments made to both Houses of

(@) Interest-bearing or zero-coupon bonds or securities or other evidence of indebtedness of the

Government of the Philippines;

(b) Interest-beating 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;

(©) Direct loans to members, with priority to low income groups and to short- and medium-
term loans to members such as salary, policy, educational, emergency, and other similar
loans: Provided, That, for purposes of the said loans, GSIS shall endeavor to lend no less than
forty percent (40%) of the investable fund of the GSIS Social Insurance Fund.

‘The deduction and remittance by the employer of loan amortization due to the GSIS shall, at
all time, take priority over and above the deductions and payment of any and all obligations

and payment of any and all obligations of the member due to private creditors.
@ 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;

26


(© Real estate property including shares of stocks involving real estate property andl investments
secuted by first mortgages on real estate or other collaterals acceptable to the GSTS: 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;

(© Debt instruments and other securities traded in the secondary markets;

(@ 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.

(&) Common and preferred stocks of any solvent corporation of financial instirution 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;

Domestic mutual funds including investments related to the operations of mutual funds; and

) Foreign mutual funds and in foreign currency deposits or foreign curren 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 mote 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
ay be necessary for the purpose of making actuasial studies, calculations and valuations of the
fands of the GSIS including such data needed in the computation of tates 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 fands—The GSIS shall make a periodic

actuarial examination and valuation of its funds in accordance with accepted actuarial principles.

27


29

SECTION 52. Exemption from tax, legal processes and lien—It is hereby reaffirmed as a

tate 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

cct 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 actuatial solvency of its funds and increase the

contribution rate necessary to sustain the benefits of this Act. Accordingly, and 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 by

Jaw, 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 ot replace the exemption referred to herein as an

ential 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 disallowances. ‘The benefits,
sums or monies corresponding to the benefits under this Act shall likewise be exempt from

attachment, garnishment, execution, levy or other proc

es issued based on financial obligations
or liability of any member, including any pecuniary accountability arising from or caused or

occa

ioned by his/her exercise or performance of his/her official functions or duties, ot 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.

28


a

20

30
31

33
34

G. ADMINISTRATION

SECTION 53. Implementing body.—The Government Service Insurance Systems 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:

(@) Formulate, adopt, amend and/or rescind such rul

s and regulations as may be necessary to
carty out the provisions and purposes of this Act, as well as the effective exercise of the

of the GSIS, its

powers and functions, and the discharge of duties and responsibil

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 indireetly, in accordance with the provisions of this

Act

(@) Acquire, utilize ot dispose of, in any manner recognized by law, real or personal property in

the Philippines or elsewhere necessary to carry out the puxposes 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.

(@ Sue and be sued.


ana eD

26

(h) Enter into, make, perform and cary out contracts of every Kind and description with any

person, firm or association or corporation, domestic ot foreign.

@ Cary on any other lawful business whatsoever in pursuance of, or in connection with the

provisions of this Act

) Have one ot 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 ot all foreign countries, states and tertitories: Provided, ‘That the GSIS shall maintain a

s a minimum of fifteen thousand

branch office in every province only where there exis

(15,000) membership.

(& Borrow funds from any source, private of 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 ot private enti

(Invest, own of 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

fication sy

compensation and position class tem and qualifications standards approved by the

GSIS Board of Trustees based on a comprehensive job analysis and audit of actual duties

and responsibilities: Provided, furer, ‘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 of increases based on productivity and profitability.

(@) Design and adopt an Early Retirement Incentive Plan and/or financial assistance for the

purpose of retirement for its own personnel.

(0) Fix and periodically teview and adjust the rates of interest and other terms and conditions for

Joans and credits extended to members or other persons, whether natural or juridical.

30


30
31
32
33

(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 Republic Act No. 7699, otherwise known as the Portability

Law.

(@ 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,

(© 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 theit 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.

(@) Determine, fix and impose interest upon unpaid premiums due from employers and

employees.

31


1

we on

20
21

22
23
24
25
26
27
28
29
30
31
oe
33

(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

payment or settlement of the obligations referred to herein within thirty (30) days from the

, due from all obligors, whether public or private. The GSIS shall demand

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.

(®) 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.

(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.

‘The members of the Board of Trustees shall be come from the following sectors:

(a) A member who shall either be the President of the Philippine Public School Teachers
Association (PPSTA) or the President of the Philippine Association of School

Superintendents (PASS), to represent the employees in the public education sector;

(b) Two (2) members from the leading organizations or associations of government employees

ot retil

32


Au oen

(6) Four (4) members from the banking, finance, investment, and insurance sectors, who are

presumed to have expestise and technical knowledge in their specialized fields; and

(@ One (1) member from the legal profession, who is a member of the Integrated Bar of the
Philippines in good standing and who, at the time of appointment, is also a member of the

GSIS.

‘The ‘Trustees shall elect from among themselves a Chairman. ‘The President and General

Manager of the GSIS 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 two (2) yeats subject to reappointment following the ir and
Proper Rule and othe criteria as provided for by law: Provided, That a Trustee may only hold office
for a maximum of six (6) years: Provided further, That vacancy, other than through the expiration

of the term, shall be filled for the unexpired term only.

‘The compensation, per diems, allowances and incentives of the members of the Board shall be

determined in accordance law.

SECTION 56. Powers and functions of the Board of Trustees —The Board of Trustees

shall have the following powers and functions

(a) Formulate the policies, guidelines and programs to effectively carry out the purposes of this

Act.

(b) 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.

(6) 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.

33


1
2
3
4
5

6

7

8

9
10
iW
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34

(@ 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.

(©) 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

() Any 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.

(@ 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) Determine, fix and impose interest upon unpaid or unremitted premiums and/or

contributions.

@ Do and perform any and all acts nece:

'y, 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 and
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 ot more executive vice-

presidents, senior vice-presidents, vice-presidents and managers in addition to the usual

34


19

20

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 Managet 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

‘he 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—The Chairperson of the Commission on Audit:

{@) Shall be the ex ofaio auditor of the GSIS and may assign the necessary personnel fo assist the

chairman of the commission on audit in the performance of his/her duties.

(b) Or the autho

calendar year, an audited statement showing the financial condition and progress of the GSIS

ed representative shall submit to the Board soon after the close of each

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 cases for legal action of tral, issues for legal opinions, preparation and review
of contracts/agreements and others, as the GSIS may decide or determine from time to time:
Prnided, boweve, That the present legal services group in the GSIS shall serve as its in-house legal

counsel.

SECTION 641. Powers of the Insurance Commission —The Insurance Commissioner or an
authorized representatives shall make an examination of the financial condition of the GSIS at
least once every three (3) years: Provided, howrer, That the GSIS shall pay the Office of the
Insurance Commissioner an amount equal to the actual expenses incutred by the said office in
the conduct of the examination, including the salaries of the examiners and of the actuary of

such examination for actual time spent.


Socemytaunun

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,
H. GENERAL PROVISIONS
SECTION 63. 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 Aact 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 procedutes 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 acquized asset,
the GSIS may further develop /renovate its assets, either with its own capital or through a joint

venture arrangement with private companies ot individuals.

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

36


20

a

22

23
24
25
26
27
28
29
30
34
32
33
34

No injunction of 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.
I. SANCTIONS

SECTION 65. Penalties —

(@) Imprisonment from not less than twenty (20) years but not more than thirty (30) years, a fine
of not less than five hundred thousand Philippine pesos (PhP 500,000.00) but not more than
five million Philippine pesos (PhP 5,000,000.00), upon the discretion of the court, absolute
perpetual disqualification from holding public office, and other accessory penalties as may be

provided by law, shall be imposed upon the following:

(1) The head of an office of the national government, any of its political subdivisions,

branches, agencies and instrumentalities, including government-owned or controlled

corporations and government financial institutions, who fails, refuses or delays 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.

(2) A member of the personnel of such offices mentioned in subparagraph (a)(1) of this
Section who is involved in the collection of premium contributions, loan amortization
and other accounts due the GSIS who fails, refuses or delays 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.

(b) Imprisonment from not less than twelve (12) years and one (1) day to twenty (20) years, a
fine of not less than five hundred thousand Philippine pesos (PhP 500,000.00) but not more
than two million Philippine pesos (PhP 2,000,000.00), upon the discretion of the court, and
absolute perpetual disqualification from holding public office, shall be imposed upon the

following:

7


2

(1) Agency personnel involved in the deduction of loan amortizations from employees’
salaries, emoluments or other benefits, who fails to observe the order of preference
provided in Section 49(c).

(2) A head of an office of the national government, any of its political subdivisions,
branches, agencies and instrumentalities, including government-owned or —controlled
corporations and government financial institutions, who fails to include in the annual
budget the amount corresponding to the employer or deduct the monthly contributions
of the employee.

(3) The treasurer, finance officer, budget officer or other official or employee in the office
mentioned in subparagraph (b)(2) of this Section directly responsible in the preparation
of the budget or involved in the deductions of premiums who fails to include in the
annual budget the amount corresponding to the employer or deduct the monthly
contributions of the employee.

(4) The treasurer, financial officer, budget officer or any other official ot employee
responsible for deducting the monthly contribution, loan amortization or other accounts

of the member and remitting the same to the GSIS, who, after deducting the

aforementioned obligations from the members’ 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): Pronided, That failure to remit within the period specified shall give rise to
the presumption that such person misappropriated such contribution, loan amortization
or other accounts.

(8) The head of the office of the officer mentioned in subparagraph (b)(4) and found liable
under this Section.

(6) An employee or member who teceives or keeps fund or property belonging, payable or
deliverable to the GSIS and approptiates the same, of take or misappropriates or uses the
same for any purpose other than that authorized by this Act, permits another person to
take, misappropriate or use said fund or property by expressly consenting thereto, or
through abandonment ot negligence, or is otherwise guilty of the misappropriation of

said fund or property, in whole ot in part.

(©) Imprisonment from six (6) years and one (1) day to twelve (12) years, a fine of not less than

five hundred thousand Philippine pesos (PhP 500,000.00) but not more than two million
Philippine pesos (PhP 2,000,000.00), upon the discretion of the court, and absolute perpetual

disqualification from holding public office, shall be imposed upon any person found to have

38


29
30
31
32
33
34

participated directly or indirectly in the commission of fraud, collusion, falsification, or
misrepresentation in any transaction with the GSIS, whether for himself or for some other

persons.

(@) Imprisonment from not less than six (6) years and one (1) day to ewelve (12) years, a fine of
not less than five hundred thousand Philippine pesos (PhP 500,000.00) but not mote than
one million Philippine pesos (PhP 1,000,000.00), upon the discretion of the court, and such

other accessory penalties as may be provided by law, shall be imposed upon the following:

(1) Any petson who shall obtain or receive any money or check invoking any provision of
this Act ot any agreement hereunder, without being entitled thereto, with the intent to
defraud any member, employer, the GSIS, or any thied party.

2) A GSIS official responsible for the collection of premium contributions, loan
amottizations and other members’ accounts who fail to demand remittance of premium
contributions, loan amortizations and other members’ accounts due the GSIS, and to
institute the necessary administrative, civil and criminal case against the concerned
officials within a reasonable time after demand has been given: Provided, That prosecution
under this subparagraph shall be without prejudice to any civil or administrative liability
which may also arise from the acts committed.

(3) Any person who fails or refuses to comply with any of the provisions of this Act or with

lure or refusal is not

the rules and regulations adopted by the GSIS, where such fa

otherwise specifically penalized in this Act.

(© Suspension from six (6) months to one (1) year or a fine of not less than five hundred
thousand Philippine pesos (PhP 500,000.00) but not more than two million Philippine pesos
(PhP 2,000,000.00), without prejudice to any civil or administrative liability which may also
arise therefrom shall be imposed upon the President and General Manager and/or Members
of the Board, in the event of their failure, without justifiable cause, to comply with their

duties and obligations under this Act.

In addition to the penalties provided in this Section, the persons found liable under this Act shall
be solidarily liable in their personal capacity to the GSIS for the amount of the contribution, loan
amortization and other accounts which was not remitted to GSIS, and for the interests, penalties

and surcharges due the GSIS in case of delayed remittances. Officers and/or members of

39


aA Rw

ea.

personnel are also solidarily liable in their personal capacity to the employee or member

concetned in the form of damages, including surcharges and interests.

All the liabilities from charges and complaints under this Section shall be construed as a waiver
of State immunity from suit, Officers and/or members of personnel may not invoke the defense

of non-suability of the State.

Criminal actions arising from violations of the provisions of this Act may be commenced by the

s, under Act No.

GSIS or by the aggrieved member, either under this Act or, in appropriate cas.

3815 otherwise known as the Revised Penal Code, and other special laws,

SECTION 66. Implementing rules and regulations—Vhe 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 not later than ninety (90) days after the approval of this Act.

SECTION 67. Non-impairment of benetits, powers, jurisdiction, rights, privileges,
functions and activities —|

Pr

jothing in this Act shall be construed to repeal, amend of limit any

dential Dectees, Letters of Instructions, not otherwise specifically

ion of existing law:

provi

inconsistent with the provisions of this Act

SECTION 68. Exclusiveness of benefits—Whenever othet 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 such a member: Provided, however, ‘That if
the benefits provided by the law chosen ate less than the benefits provided under this Act, the

GSIS shall pay only the difference.

SECTION 69. Appropriations —The amount necessaty to catty 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 10. Separability clause—Should any provision of this Act ot 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.

40.


SECTION 71. Repealing clause—Presidential Dectee No. 1146, Republic Act No. 8291,
Presidential Decree No. 712, and Section 9 of Republic Act No. 656, as amended by Presidential

Dectee No. 245, are hereby expressly repealed.

Alll 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,

41