Limited Portability Law (Republic Act No. 7699) What Is Portability?

LIMITED PORTABILITY LAW (REPUBLIC ACT NO.
for any benefits in the GSIS; or

3. If a worker in the private sector is not
7699) What is Portability? qualified for any benefits from the
SSS.
Portability refers to the transfer of funds for the 4.
account, and benefit of a worker who transfers from If a work qualifies for benefits in both Systems,
one system to the other (Section 1(b), Rule III of R.A. totalization shall not apply (Section 5, Rule V of R.A.
No. 7699). The term system herein refers to SSS or No. 7699).
GSIS. It refers to instances where a worker transfers
from private employment to government In the case of Gamogamo v. PNOC Shipping and
employment, and vice versa, thereby transferring from Transport Corp., G.R. No. 141707, dated May 7, 2002,
being SSS member to GSIS member, and vice versa. the pivotal issue was whether, for the purpose of
The transfer of funds is to ensure that his/her years of computing an employee’s retirement pay, prior service
service are duly credited. rendered in a government agency can be tacked in and
added to the creditable service later acquired in a
Coverage government-owned and controlled corporation
without original charter. Petitioner Gamogamo was
Section 1, Rule I of R.A. No. 7699 provides that the first employed with the Department of Health (DOH)
rules and regulations shall apply to all worker‐ for fourteen (14) years until he resigned. After which,
members of the Government Service Insurance he was employed by a private domestic corporation,
System (GSIS) and/or Social Security System (SSS) who LUSTEVECO. Said corporation was subsequently
transfer from one sector to another, and who wish to acquired by PNOC Shipping and Transport
retain their membership in both Systems. Corporation. Respondent then implemented a
Manpower Reduction Program under which,
Limited Portability Scheme retrenched employees shall receive a two-month pay
for every year of service. Petitioner requested to be
R.A. No. 7699 was enacted to enable those from the included in the next retrenchment schedule, but was
private sector who transfer to the government service declined. Hence, petitioner filed a complaint for the
or from the government sector to the private sector to full payment of his retirement benefits, and that his
combine their years of service and contributions which service with DOH should have been included in the
have been credited with the SSS or GSIS, as the case computation of his years of service. The Court ruled in
may be, to satisfy the required number of years of the negative. The Supreme Court stated, to wit:
service for entitlement to the benefits under the “Petitioner’s contention that the principle of tacking of
applicable laws (Chan, Joselito, Bar Reviewer on Labor
Law, 2017 3rd Revised Edition, pg. 445). creditable service is mandated by Republic Act No.
7699 is baseless. xxx
Totalization Rule
Obviously, totalization of service credits is only
It refers to the process of adding up the periods of resorted to when the retiree does not qualify for
creditable services or contributions under each of the
Systems, SSS or GSIS, for the purpose of eligibility and benefits in either or both of the Systems. Here,
computation of benefits (Chan, Joselito, Bar Reviewer petitioner is qualified to receive benefits granted by
on Labor Law, 2017 3rd Revised Edition, pg. 445).
Hence, if a worker is not entitled to any benefits the Government Security Insurance System (GSIS), if
under SSS or GSIS because the periods of his such right has not yet been exercised. The pertinent
creditable services or contributions does not qualify
provisions of law are:
to avail any benefit under SSS or GSIS, as the case may
be, he/she could apply the totalization rule. Applying SEC. 12 Old Age Pension. — (a) xxx
the totalization rule can increase the chances of a
(b) A member who has rendered at least three years
worker to avail of benefits under the subject law.
but less than fifteen years of service at the time of
Section 3, Rule V of R.A. No. 7699 provides instances
separation shall, upon reaching sixty years of age or
where totalization applies, to wit: 1. If a worker is not
qualified for any benefits from both Systems; upon separation after age sixty, receive a cash
2. If a worker in the public sector is not qualified payment equivalent to one hundred percent of his
average
1
monthly compensation for every year of service with benefits for his/her years of work. This is in conformity
with the objective of the Portability Law which is to
an employer (Presidential Decree No. 1146, as
ensure the social welfare of employees in any sector.
amended, otherwise known as the Government Service
Insurance Act of 1977). Under RA 7699, otherwise known as the Portability
Law, government retirees who do not meet the
SEC. 4. All contributions paid by such member required number of years provided under PD 1146 and
personally, and those that were paid by his employers RA 8291 may still avail themselves of retirement and
other benefits.
to both Systems shall be considered in the processing
of benefits which he can claim from either or both Under this law, retirees may combine their years of
service in the private sector represented by
Systems: Provided, however, That the amount of contributions to the Social Security System (SSS) with
benefits to be paid by one System shall be in their government service and contributions to the
GSIS to satisfy the required years of service under PD
proportion to the number of contributions actually
1146 and RA 8291.
remitted to that System (Republic Act No. 7699).
However, if retirees have already satisfied the
In any case, petitioner’s fourteen years of service with
required years of service under the GSIS retirement
the DOH may not remain uncompensated because it option they have chosen, they would not be allowed
to incorporate
may be recognized by the GSIS pursuant to the
their contributionsto the SSS anymore for availment of
aforequoted Section 12, as may be determined by the additional benefits.
GSIS. Since petitioner may be entitled to some
In case of death, disability and old age, the periods of
benefits from the GSIS, he cannot avail of the benefits creditable services or contributions to the SSS and
under R.A. No. 7699.” (Emphasis supplied) GSIS shall be added to entitle retirees to receive the
benefits under either PD 1146 or RA 8291.
Hence, if an employee is entitled to some benefits
either from GSIS or SSS, as the case may be, then the If qualified under RA 8291, all the benefits shall apply
rule on totalization will not apply. Totalization is only EXCEPT the cash payment. The Portability Law
resorted to when one cannot avail any benefits from provides that only benefits common to both Systems
GSIS or SSS, as the case may be, since the subject law (GSIS and SSS) shall be paid. Cash payment is NOT
intends that the employee may be able to get some included in the benefits provided by the SSS.
2

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LIMITED PORTABILITY LAW (REPUBLIC ACT NO.

for any benefits in the GSIS; or

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