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 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

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)

ContributionsMember 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

BenefitsRetirement

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 employerIt 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 for cause

automatically forfeit Unless terms of resignation or separation provide

otherwise

Member separated not for cause not for cause • shall continue to be member & entitledentitled 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)

DisabilityPermanent 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 DisabilityAccrues 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.

SurvivorshipWho 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. MontesclarosFacts:

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.

FuneralShall 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.

FuneralThe 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 InsuranceAll 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 BenefitsMaturity 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 BenefitsAccidental 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 BenefitsCash 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 BenefitsDividends. — 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 ClaimsGSIS 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 FeesA.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.