RA 8291

Introduction
1987 Constitution has given constitutional
recognition to the obligation of the state to
retirees by providing that the state shall
from time to time review to upgrade the
pensions and other benefits due to retirees
of both government and private sector (Art.
XVI, Sec. 8)
Another feature of 1987 Constitution is to the
effect that pensions or gratuities are not
considered as additional, double or indirect
compensation (Art. IX, B, The Civil Service
Commission, Sec. 8, par. 2).
As a consequence, a retiree who is reappointed to
a government position shall receive the
compensation for the position without violating
the constitutional prohibition imposed on elective
or appointive public officers or employees against
receiving additional, double or indirect
compensation (id., par. 1).
Objectives and scope:
Revised the 20-year old charter of GSIS (PD
1146)
Aims to expand and increase the coverage
and benefits of GSIS;
Introduce institutional reforms for GSIS to
have more flexibility and thus perform its
mission of providing social security
protection more effectively.
Effectivity
June 24, 1997, 15 days after it was
published on June 9, 1997. It was approved
on May 30, 1997

Repeal of retirement laws
PD 1146
RA 660
RA 1616
Who are covered?
Compulsory for all employees:
Appointive or elective
Whether temporary, casual, permanent or
contractual w/ e-e relationship
(so those under job orders are not covered)
Who are receiving basic pay or salary but not
per diems, honoraria or allowances; and
Who have not reached the compulsory
retirement age of 65 yrs.

When coverage takes effect?

Upon the employees assumption to duty
pursuant to a valid appointment or election
and oath of office.
Are elective officials still covered after
their term of office expires?
Compulsory coverage shall cease upon expiration of term.
They have the option to continue with life insurance so
long as they will pay both the employee and employer
shares.
On social security coverage, said official shall continue to
be a member and shall be entitled to benefits that provide
for contingencies (death, disability or separation) subject
to satisfaction of eligibility conditions.




Who are not covered?
Employees who have separate retirement
schemes under special laws and are therefore
covered by their respective retirement laws,
such as the members of the Judiciary,
Constitutional Commissions, and other similarly
situated government officials;
Uniformed members of AFP & PNP including
BJMP;
Those who are not receiving basic pay or salary
Contractuals who have no employer and
employee relationship with the agencies they
serve


When does a contractual have e-e
relationship with his employer?
Person was selected and engaged by the
employer
Employer pays the salary
Employer has the power of dismissal
Employer has the power to control the means
and the result of the work to be done

Compensation
Is the basic pay or salary received by an
employee pursuant to this
election/appointment.
Does not include per diems, bonuses,
overtime pay, honoraria, allowances and any
other emoluments received in addition to
basic pay (RA 8291, Sec. 1)
Contributions
Member Employer
First P10,000 9% 12%
In excess of P10,000 2% 12%

Who is responsible for remittance of contributions?
employer
Date of remittance?
First ten days of calendar month following the month to
which contributions apply.

Effect of non-remittance?
All loan privileges of member shall be
suspended
Determination of eligibility to and computation
of benefits will be made subject to deduction of
contribution arrearages and service loans
accounts plus surcharges from proceeds of
claim
Penalties on delayed remittances?
Aside from penal provisions, interest of not less
than 2% per month.

Penal Provisions?
Official or employee who fails to include in
annual budget the amount corresponding to
e-e contributions or who fails by more than
30 days to remit the amount from the time
such amount becomes due
Employee, who after deducting, fails to
remit to GSIS within 30 days from date they
should be remitted
Penal provisions?
Heads of offices of national government, etc.
who shall fail, refuse or delay the payment,
turn-over, remittance or delivery of such
amounts to GSIS
Membership in GSIS
Enjoyment of life insurance, retirement and
other social security protection such as
disability, survivorship, separation and
unemployment benefits
Members of judiciary and constitutional
commissions are covered by GSIS with life
insurance only; retirement laws are
governed by special laws









Is part time service included in the computation of
total service rendered?
As a rule, all full-time service with compensation
from date of original appointment or election shall
be computed for purpose of determining retirement
benefits.
service shall mean full-time service w/
compensation. Part time service w/ compensation
shall be converted to full time equivalent.
Part-time shall be converted using a 40-hour per
week and 52-week per year as basis.

Valdez v. GSIS

Petitioner would want SC to reverse CA
ruling rejecting his assertion that his
services rendered in the MECO, MMSU,
PHIVIDEC and as OIC Vice-Governor of
Ilocos Norte should be credited in the
computation of his retirement benefits .
Valdez v. GSIS

SC:
Aside from having been rendered part-
time in said agencies, the said positions
were without compensation as defined in
Section 2 (i) of R.A. No. 8291.
Benefits
Contingencies compensable?
Retirement
Separation (NOT BENEFITS IN SSS)
Unemployment (not in SSS)
Disability
Survivorship
Death (Life Insurance and Funeral)
New benefits?
Unemployment benefit
Separation benefit

Improvement of existing benefits?
Increase in Average Monthly Compensation
(AMC) Limit: from AMC limit of P3,000 to
P10,000
Improvement of existing benefits?
Increase in the Revalued Average Monthly
Compensation (RAMC): from P140 to P700
Full enjoyment of 5-year lump sum benefit
(no more discounted per PD 1146 where
retiree receives only 52.17 months while it
is full 60 months at present)
Liberalization of eligibility requirements
Allocation of at least 40% of the Social
Insurance Fund (SIF) to member Loans
Benefits
Retirement

Conditions:
rendered at least 15 yrs. of service
at least 60 year old at time of retirement
not receiving monthly pension from permanent total
disability

Options:
- lump sum payment of basic monthly pension multiplied
by 60 plus basic monthly pension for life upon
expiration of 5 years period
- cash payment of 18 times the basic monthly pension
plus basic monthly pension for life payable
immediately upon retirement but without 5-year
guaranteed period.

Retirement
If rendered at least 15 years service but is less
than 60 years at time of separation or resignation,
member will be entitled to cash payment
equivalent to 18 times his basic monthly pension
payable at the time of separation or resignation
and upon reaching the age of 60 years, he will be
entitled to basic monthly pension payable monthly
for life.
This is denominated as separation benefit but
in reality a combination of separation and
retirement benefits.
Retirement
Entitlement to retirement is premised on service
of at least 15 years.
Member who is 60 years old upon retirement but
with less than 15 years of service is not entitled to
retirement. What he gets is a separation benefit
consisting of cash benefit equivalent to 100% of
his average monthly compensation for each year of
service he paid contributions but not less than
P12,000 provided he has at least 3 years but less
than 15 years of service.
Retirement
Member who has at least 15 years of service may
retire at 60 or may continue in the service until 65
(compulsory retirement age)
If he has less than 15 years, he may be allowed to
continue in the service in accordance with existing
civil service rules and regulations. Extension of
service is no longer mandatory in contrast to PD
1146.
Notice by employer
It shall be the duty of the Employer to notify
its Employee at least Ninety (90) days in
advance of the date of his/her compulsory
retirement.
Separation

Separation benefit

A cash payment of 18 times the Basic Monthly
Pension at time of separation and a life pension
to start at the age of 60 will be given to those who
separate from the service with at least 15 years
service and are below 60 years of age.
Under PD 1146, separated member will have to wait
until he is 60 years of age to receive any separation
benefit.



Separation: Who are eligible?

Types:
- rendered at least 3years but less than 15 years
(cash payment equivalent to 100% of Average Monthly
Compensation for every year of service payable upon
reaching 60 or upon separation whichever comes later if
not receiving monthly pension from permanent total
disability)

- rendered at least 15 years & who is below 60 at time of
resignation/separation
(cash payment equivalent to 15 times the basic Monthly
Pension payable upon separation plus monthly pension
starting 60)

Separation
IRR, Rule II, Sec. 2.5:
Member separated for cause
automatically forfeit
Unless terms of resignation or separation provide
otherwise

Member separated not for cause
shall continue to be member & entitled subject to
qualification & other prescription



Unemployment

The benefit is paid when a permanent
employee is involuntarily separated from
the service as a result of the abolition of his
office or position usually resulting from
reorganization.
Who is eligible?

Permanent employee who has paid 12 monthly
contributions.
Duration of benefit depends on length of
service ranges from 2 mos. to a maximum of
6 mos.
Equivalent of benefit 50% of the average
monthly compensation
Options Those who have more than 15
years service may either avail of retirement
or separation benefits as the case may be.

Disability

Any loss or impairment of the normal
functions of the physical or mental faculties
of a member, which reduces or eliminates
his capacity to continue with his current
gainful occupation or engage in any other
gainful occupation (IRR, Sec. 1.18)
Disability

Evaluation of disability as a contingency is
vested solely in GSIS ( IRR, Sec. 9.3.1)
General condition for entitlement is that
the disability was not due to misconduct ,
notorious negligence, habitual
intoxication or willful intention to kill
himself or another (IRR, Sec. 9.3.2)
Disability
Permanent Total Disability
A member who becomes permanently and totally
disabled when he/she is in the service and has
paid at least 180 monthly contributions (monthly
income benefit for life equivalent to basic monthly
pension plus cash payment equivalent to 18 times
his basic monthly pension effective on date of
disability)
Permanent Total Disability
A member who becomes permanently and totally
disabled are eligible when (a) he is in the service at
time of disability or (b) separated from the service and
has paid at least 36 monthly contributions within the
last 5 years immediately preceding the disability or
has paid a total of at least 180 monthly contributions
(monthly income benefit for life equivalent to the basic
monthly pension)
A member who becomes permanently and totally
disabled when he is separated from service with at
least 3 years of service but has not paid 36 monthly
contributions within the last 5 years is still eligible
(cash payment equivalent to 100% of the AMC) for
every year of service but not less than P12,000)

Disabilities considered permanent total?
Complete loss of sight in both eyes
Loss of two limbs at or above ankle or wrist
Permanent complete paralysis of 2 limbs
Brain injury resulting in incurable imbecility
or insanity
Other cases as may be determined by GSIS
Permanent Partial Disability
A member who becomes permanently and
partially disabled when
- when he is in the service at time of
disability; or
- separated from service and has paid 36
monthly contributions within the last 5
years immediately preceding the disability
or has paid a total of at least 180monthly
contributions.
Permanent Partial?
Any finger
Any toe
One arm
One hand
One foot or leg
One or both ears
Hearing of one or both ears
Sight of one eye
Other cases as may be determined
Temporary Total Disability
Accrues or arises when there is complete
but temporary incapacity to continue with a
member's present employment or engage in
any gainful occupation due to the loss or
impairment of the normal function of the
physical and/or mental faculties of the
member. In effect, this loss or impairment
can be reversed to the point where the
member can continue with his previous
employment or engage in another gainful
occupation
Gainful employment

Any productive activity that provides the
member with income at least equal to the
minimum compensation of government
employees (IRR, Sec. 1.17)
Temporary Total Disability
A member who suffers temporary total disability
for reasons not due to grave misconduct, notorious
negligence, habitual intoxication or willful
intention to kill himself or another may be entitled
if:
- he is in service at time of disability and has
exhausted sick leave credits; or
- if separated, has rendered at least 3 years of
service and has paid at least 6 monthly
contributions in the twelve month period
immediately preceding his disability.
Disability
A written notice of sickness or injury shall
be given by a member or anybody in his/her
behalf within five (5) working days from the
date of the occurrence of the contingency.
An application for disability benefits must
be filed with the GSIS within Four (4) years
from the date of the occurrence of the
contingency, fully supported by required
papers and documents.
Disability - forfeiture of disability benefits if member refuses or
deliberately fails to:
(a) have himself/herself medically treated by a physician when required
by the GSIS; or
(b) take the prescribed medication; or
(c) have himself/herself confined in a hospital without justifiable reason,
when such confinement is required by the GSIS; or
(d) avail himself/herself of such rehabilitation facilities as may be duly
recommended by the GSIS and made available for him/her; or
(e) observe such precautionary and/or preventive measures as prescribed
by a physician or expressly required of him/her to prevent the
aggravation or continuance of his/her disability.
(f) report on his/her re-employment.
Survivorship

Those granted to surviving and qualified
beneficiaries of the deceased member or
pensioner to cushion them against the
adverse economic, psychological and
emotional loss resulting from the death of a
wage earner or pensioner.
Survivorship
Who are eligible?
If at time of death, a member was in the
service and has rendered at least 3 years of
service (primary beneficiaries to receive
survivorship pension plus cash payment;
secondary beneficiaries or legal heirs
entitled to cash payment)
Survivorship
If at time of death, a member was in the service
with less than 3 years service or was separated
from the service with at least 3 years of service
and has paid 36 monthly contributions within the
5-year period immediately preceding his death or
has paid a total of at least 180 monthly
contributions prior to death (primary
beneficiaries to receive survivorship pension plus
cash payment; secondary beneficiaries or legal
heirs entitled to cash payment)

Survivorship

Primary Beneficiaries
The legitimate spouse, until he/she
remarries, and the dependent children.
Secondary Beneficiaries
(a) the dependent parents; and
(b) the legitimate descendants
Who are dependents?
(a) the legitimate spouse dependent for support;
(b) any legitimate, legitimated and/or legally
adopted child, including any illegitimate child, who
is unmarried, not gainfully employed, who has not
attained the age of majority, or being at the age of
majority but incapacitated and incapable of self-
support due to a mental or physical defect
acquired prior to age of majority; and
(c) the parents dependent upon the member for
support.
GSIS v. Montesclaros
Facts:
SB member Nicolas Montesclaros married Milagros Orbiso.
Nicolas was a 72-year old widower when he married
Milagros who was then 43 years old. Nicolas died. Milagros
then filed with the GSIS a claim for survivorship pension
under PD 1146. The GSIS denied the claim because under
Section 18 of PD 1146, the surviving spouse has no right to
survivorship pension if the surviving spouse contracted the
marriage with the pensioner within three years before the
pensioner qualified for the pension.
SC:
Section 18 of Presidential Decree No. 1146 void for being
violative of the constitutional guarantees of due process
and equal protection of the law. The proviso is unduly
oppressive in outrightly denying a dependent spouse's
claim for survivorship pension if the dependent spouse
contracted marriage to the pensioner within the three-year
prohibited period. There is outright confiscation of benefits
due the surviving spouse without giving the surviving
spouse an opportunity to be heard. The proviso also
violated the equal protection clause because it
discriminates the dependent spouse who contracts
marriage to the pensioner within three years before the
pensioner qualified for the pension.
Funeral
Shall be paid upon the death of:
(a) an active member; or
(b) a member who has been separated from the service,
but who is entitled to future separation or retirement
benefit; or
(c) a member who is a pensioner (excluding survivorship
pensioners); or
(d) a retiree who at the time of his/her retirement is at
least 60 years old but opts to retire under RA 1616; or
(e) a member who retired under RA 1616 prior to the
effectivity of RA 8282 with at 20 years service regardless of
age.
Funeral

Amount is initially P12,000 but shall be
increased to at least P18,000 after five
years.
Funeral
The funeral benefit shall be paid to one of the
following in the order in which they appear
herein below:
(a) the surviving spouse;
(b) the legitimate child who spent for the
funeral services; or
(c) any other person who can show
incontrovertible proofs of having borne the
funeral expenses.
Compulsory Life Insurance
All employees, including the members of the
Judiciary and the Constitutional
Commissioners, but excluding the
uniformed members of the Armed Forces of
the Philippines (AFP), the Philippine
National Police and the Bureau of Fire
Protection (BFP) and Bureau of Jail
Management and Penology.
Life Insurance Benefits
Maturity Benefit. Upon maturity of the life
insurance, the face amount less any indebtedness
against the policy, shall be paid to the member;
Death Benefit. When a member dies prior to the
maturity of his/her insurance and during its
continuance, the GSIS shall pay to the designated
Beneficiaries or to his/her legal heirs, as the case
may be, the face amount less any indebtedness
thereon.
Life Insurance Benefits
Accidental Death Benefit When the death of the
member is accidental in accordance with Section
10.9.2 of IRR, the GSIS shall pay the designated
beneficiaries or the legal heirs, as the case may be,
an additional amount equivalent to the face
amount of his/her compulsory insurance;
Waiver of Premiums. When a member is
separated due to total and permanent disability,
the contributions that may become due and
payable during the period of disability shall be
deemed waived and considered paid.
Life Insurance Benefits
Cash Surrender Value (CSV). After his/her
insurance shall have been in force for one (1) year,
a member separated from the service prior to the
maturity of the insurance may be paid the cash
value less any indebtedness thereon unless the
terms of his/her separation provide otherwise;
Insurance Loans. Upon application, a member
who has been insured for at least one (1) year may
be granted an insurance loan in an amount not
exceeding Fifty Percent (50%) of the cash value of
his/her insurance at the time of application.
Life Insurance Benefits
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, based on records submitted by the
employer. A Dividend Allocation Formula
shall be determined and circularized by the
GSIS for this purpose.
Adjudication of Claims
GSIS has original & exclusive jurisdiction to settle
any dispute arising under RA 8291 w/ respect to:
- coverage
- entitlement to benefits
- collection & payment of contributions
- any other matter related to the any or all of the
foregoing which is necessary for their
determination

Which body of GSIS vested with Quasi-Judicial
Functions? Board of Trustees

Prescriptive Period ?
- 4 years from date of contingency except life &
retirement which do not prescribe.

Tax Exemption
RUBIA V. GSIS
- exemption of GSIS from execution
does not cover refund of amortization
payment

CITY OF DAVAO V. RTC
- on real property taxes, GSIS tax-
exempt status in previous law was
withdrawn under RA 7160 but restored
under Sec. 39 RA 8291

Legal Fees
A.M. No. 08-2-01-0, February 11, 2010

Facts:
GSIS seeks exemption from the payment of
legal fees imposed on government-owned or
controlled corporations under Section 22,
Rule 141 (Legal Fees) of the Rules of Court.
GSIS anchors its petition on Section 39 of its
charter, RA 8291.

Issue:
May the legislature exempt GSIS from legal
fees imposed by the Court on government-
owned and controlled corporations and
local government units?
SC:
Since the payment of legal fees is a vital component
of the rules promulgated by this Court concerning
pleading, practice and procedure, it cannot be
validly annulled, changed or modified by Congress.
As one of the safeguards of this Court's
institutional independence, the power to
promulgate rules of pleading, practice and
procedure is now the Court's exclusive domain.
That power is no longer shared by this Court with
Congress, much less with the Executive.
SC:
Congress could not have carved out an exemption for the GSIS
from the payment of legal fees without transgressing
another equally important institutional safeguard of the
Court's independence fiscal autonomy. Any exemption
from the payment of legal fees granted by Congress to
government-owned or controlled corporations and local
government units will necessarily reduce the JDF and the
SAJF. Undoubtedly, such situation is constitutionally infirm
for it impairs the Court's guaranteed fiscal autonomy and
erodes its independence.
What is the effect of re-employment?

A member who is re-employed is considered
a new entrant if he was paid separation or
retirement benefits corresponding to his
previous services.
Portability of benefits
( Portability law RA 7699)
A member of GSIS who does not qualify for old
age and other benefits by reason of non-fulfillment
of the required period of service may be able to
qualify for such benefits by making use of the
period during which he rendered services to a
private employer and for which contributions
were paid to SSS. This is allowed under RA 7699
(approved May 1, 1994)
The Act instituted a limited portability scheme in
the GSIS and SSS by totalizing the workers
creditable services or contributions in each of the
Systems.
Portability refers to transfer of funds for the
benefit and account of a worker who transfers
from one system to the other (RA 7699, Sec. 2 [b]).
Totalization refers to the process of adding up the
periods of creditable services or contributions in
each of the Systems for purposes of eligibility and
computation of benefits, For purposes of
totalization, overlapping periods of membership
shall be considered once only (Sec. 3)
Overlapping period refers to the period during
which a worker contributes simultaneously to
GSIS and SSS.