RA 8291:

AN ACT AMENDING
PRESIDENTIAL DECREE
NO. 1146, AS AMENDED,
EXPANDING AND
INCREASING THE
COVERAGE AND BENEFITS
OF THE GOVERNMENT
SERVICE INSURANCE
SYSTEM, INSTITUTING
REFORMS THEREIN AND
FOR OTHER PURPOSES

Gericah May Rodriguez

Agrarian Law and Social Legislation
Friday 5:30-8:30pm/ Saturday 7:00-9:00pm
 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)
Effectivity

June 24, 1997, 15 days after it was published on

June 9, 1997. It was approved on May 30, 1997
Who are covered?
Compulsory for all employees:
– Appointive or elective
– Whether temporary, casual, permanent
or contractual w/ e-e relationship
– 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 employee’s 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
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.
 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.
 Benefits
Contingencies compensable?

– Retirement
– Separation (NOT BENEFITS IN SSS)
– Unemployment (not in SSS)
– Disability
– Survivorship
– Death (Life Insurance and Funeral)
Benefits
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.
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
Who are 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)
– 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)
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
 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.
 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.
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.