The GSIS and RA 8291

7/27/2019 The GSIS and RA 8291

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The GSIS and RA 8291

Constitutional Provisions

1987 Constitution has given constitutional recognition to the obligation of the state toretirees by providing that the state shall from time to time review to upgrade the pensions

and other benefits due to retirees ofboth government and private sector (Art. XVI, Sec.

8)

Another feature of 1987 Constitution is to the effect that pensions or gratuities are notconsidered as additional, double or indirect compensation (Art. IX, B, The Civil Service

Commission, Sec. 8, par. 2).

As consequence, a retiree who is reappointed to a government position shall receive thecompensation 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).

About GSIS

GSIS is a social insurance institution created under CA No. 186 that was passed on November14, 1936 and later amended under RA No. 8281 dated June 24, 1997.

To secure the future of all employees of the Philippine government, it provides andadministers a pension fund that has the following social security benefits: compulsory life

insurance, optional life insurance, retirement benefits, and disability benefits for work-related

accidents and death benefits.

Mandate of GSIS GSIS, as designed in its charter, is a social insurance institution under a defined benefit

scheme. It insures its members against the occurrence of certain contingencies in exchange

for their monthly premium contributions.

The social security benefits available for all GSIS members are: compulsory life insurance,optional life insurance, retirement benefits, disability benefits for work-related contingencies

and death benefits.

Organization of GSIS

The governing and policy-making body of the GSIS is the Board of Trustees, themembers of which are appointed by the President of the Philippines.

The GSIS workforce consists of 3,104 employees, 52% of whom are in the Head Officewhile the remaining 48% are in the Branches. To date, the GSIS has 15 Regional

Offices, 25 Branch Offices and 18 Satellite Offices nationwide.

RA No 8291

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 June9, 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 oathof 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 entitledto 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 thereforecovered by their respective retirement laws, such as the members of the Judiciary

Constitutional Commissions, and other similarly situated government officials;

Uniformed members of AFP and 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

Compensation

Defined as the basic pay or salary received by an employee pursuant to thiselection/appointment.

Does not include per diems, bonuses, overtime pay, honoraria, allowances and any otheremoluments received in addition to basic pay (RA 8291, sec. 1)

Contributions

Member Employer

First P 10,000 9% 12%

In excess of P10,000 2% 12%

Who is responsible for remittance of contributions? Employer


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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? The following are liable:

Official or employee who fails to include in annual budget the amount corresponding to e-econtributions 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 30days from date they should beremitted

Penal provisions? (Who are liable) 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 insuranceonly; 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 electionshall be computed for purpose of determining retirement benefits.

service shall mean full-time service w/ compensation. Part time service w/ compensationshall be converted to full time equivalent.

Part-time shall be converted using a 40 hour per week and 52 week per year as basis.Creditable Services

Valdez vs 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.

SC:

Aside from having been rendered part-time in said agencies, the said positions were without

compensation as defined in Section 2 (i) of RA No 8291.

Benefits

Contingencies compensable:

Retirement Separation Unemployment Disability Survivorship Death (Life Insurance and Funeral)

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 50% of the Social Insurance Fun (SIF) to member Loans

Benefits

Retirement

Conditions:

Rendered at least 15 yrs of serviceAt least 60 years 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 forlife upon expiration of 5 years period

- Cash payment of 18 times the basic monthly pension plus basic monthly pension for lifepayable 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 ent itled 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

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.


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Benefits

Conditions:

rendered at least 15 years of service at least 60 years old at time of retirement not receiving monthly pension from permanent total disability

Options:

lumps sum payment of basic monthly pension multiplied by 60 plus basic monthly pension forlife upon expiration of 5 years period

cash payment of 18 times the basic monthly pension plus basic monthly pension for lifepayable immediately upon retirement but without 5 years guaranteed period

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

Member who has at 15 years of service may retire at 60 or may continue in the service until65 (compulsory retirement age)

If he has less than 15 years, he may be allowed to continue in the service in accordance withexisting civil service rules and regulations. Extension of service is no longer mandatory in

contrast to PD 1146

GSIS vs COA

Issue:

Whether the COA disallowances, representing loyalty and service cash awards of the respondents as

well as housing allowance in excess of that approved by the COA, could be legally deducted from their

retirement benefits.

Sec. 39 Exemption from Tax, Legal Process and Lien-

xxx xxx xxx

The funds and/or the properties referred to herein as well as the benefits, sums or monies

corresponding to the benefits under this Act shall be exempt from attachment, garnishment, execution,

levy or other processes issued by the courts, quasi-judicial obligations of the members, including his

pecuniary accountability arising from or caused or occasioned by his exercise or performance of his

official functions or duties, or incurred relative to or in connection with his position or work except when

his monetary liability, contractual or otherwise, is in favor of the GSIS.

Respondent retired as Chief State Prosecutor of DOJ in 1992 after 44 years of service to thegovernment. He applied for retirement under RA No 910, invoking RA No 3783, as amended

by RA No 4140, which provides that chief state prosecutors hold the same rank as judges.

The application was approved by GSIS. Thereafter, and for more than nine years, respondent

continuously received his retirement benefits, until 2001, when he failed to receive his

monthly pensions.

Respondent learned that GSIS cancelled the payment of his pension because DBM informedGSI that respondent was not qualified to retire under RA 910; that the law was meant toapply only to justices and judges; and that having the same rank and qualification as a judge

did not entitle respondent to the retirement benefits provided thereunder. Thus, GSIS

stopped the payment of respondents monthly pension.

SC

Technicality

GSIS contended that respondent has no right to relief sought because he presented no lawupon which he based his claim

SC said that the inflexible rule is that social legislation must be liberally construed in favor ofthe beneficiaries. Retirement law, in particular, are liberally construed in favor of the retiree

because their objective is to provide for the retirees sustenance and, hopefully, even comfort,

when he no longer has the capability to earn a livelihood. The liberal approach aims to

achieve the humanitarian purposes of the law in order that efficiency, security, and well-being

of government employees may be enhanced. Indeed, retirement laws are liberally construed

and administered in favor of the persons intended to be benefited, and all doubts are

resolved in favor of the retiree to achieve their humanitarian purpose.

Substance

It must also be underscored that GSIS itself allowed respondent to retire under RA No 910,following jurisprudence laid down by this Court.

One could hardly fault respondent, though a seasoned lawyer, for relying on petitionersinterpretation of the pertinent retirement laws, considering that the latter is tasked to

administer the governments retirement system. He had the right to assume that GSIS

personnel knew what they were doing.

Since the change in circumstances was through no fault of respondent, he cannot beprejudiced by the same. His right to receive monthly pension from the government cannot be

jeopardized by a new interpretation of the law

GSIS argument that respondent has already been enormously benefited under RA No 910(unjust enrichment) misses the point.

Retirement benefits are a form of reward for an employees loyalty and service to theemployer, and are intended to help the employee enjoy the remaining years of his life,

lessening the burden of having to worry about his financial support or upkeep. A pension

partakes of the nature of retained wages of the retiree for a dual purpose: to entice

competent people to enter the government service; and to permit them to retire from the

service with relative security, not only for those who have retained their vigor, but more so

for those who have been incapacitated by illness or accident.

Surely, giving respondent what is due him under the law is not unjust enrichmentSeparation: Who are eligible?

Types:

Rendered at least 3 years but less than 15 years(cash payment equivalent to 100% of Average Monthly Compensation for every year of service a

payable upon reaching 60 or upon separation whichever comes later if not receiving monthly pension

from permanent total disability)

Rendered at least 15 years and 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)

SeparationIRR, Rule II, Sec 2.5:

Member separated for cause


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Automatically forfeit Unless terms of resignation or separation provide otherwise

Member separated not for cause

Shall continue to be member and entitled subject to qualification and other prescriptionLledo vs Lledo

SC dismissed from the service Atty. Cesar V. Lledo, former branch clerk of court of RTC ofQuezon City, Brch 94. Cesars wife, Carmelita, had filled an administrative case against him,

charing the latter with immorality, abandonment, and conduct unbecoming a public official.

During the investigation, it was established that Cesar had left his family to live with anotherwoman with whom he also begot children. He failed to provide support for his family

Dispositive portions says-WHEREFORE, Cesar V. Lledo, brnch clerk of court of RTC, Brnch 94, Quezon City, is hereby

DISMISSED from the service, with forfeiture of all retirement benefits and leave credits and with

prejudice to reemployment in any branch or instrumentality of the government, including any

government-owned or controlled corporation. This case is REFERRED to the IBP Board of

Governors pursuant to sec 1 of Rule 139-B of the Rules of Court.

Issue:

May government employee, dismissed from the service for cause, be allowed to recover the personal

contributions he paid to the GSIS?

SC

GSIS laws are in the nature of social legislation, to be liberally construed in favor of thegovernment employees. The money subject of the instant request consists of personal

contributions made by the employee, premiums paid in anticipation of benefits expected upon

retirement. The occurrence of a contingency, i.e., his dismissal from the service prior to

reaching retirement age, should not deprive him of the money that belongs to him from the

outset. To allow forfeiture of these personal contributions in favor of the GSIS would condone

undue enrichment.

Pursuant to the foregoing discussion, Cesar is entitled to the return of his premiums andvoluntary deposits, if any, with interest of three per centum per annum, compounded

monthly.

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 on length of service ranges from 2 mos. to a maximum of 6 mos. Equivalent of benefit 50% of the average monthly compensation Option Those who have more than 15 years service may either avail of retirement or

separation benefits as the case may be

Disability

Defined as any loss or impairment of the normal functions of the physical or mental facultiesof 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)

Temporary Total Disability

Temporary Total Disability Accrues or arises when the impaired physical and/or mentalfaculties can be rehabilitated and/or restored to their normal functions (sec 2[t])

Accrues or arises when there is complete but temporary incapacity to continue with amembers 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

Permanent Total Disability

Permanent Total Disability Accrues or arises when recovery from the impairment mentionedin sec 2 [q] is medically remote (sec 2 [s])

A member who becomes permanently and totally disabled when he /she is in the service andhas 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)

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)

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.

Primary Beneficiaries

The legitimate spouse, until he/she remarries and the dependent children.Secondary Beneficiaries

a. The dependent parents; andb. 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

AM No 10019-Ret February 22, 2001 (RE: Application for suvivors benefits of Ms. MaylenneG. Manlavi, daughter of the late Ernesto R. Manlavi)


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While Marilou G. Manlavis marriage to the late Ernesto R. Manlavi had never been dissolvedprior to his death, she abandoned the family for more than 17 years until he died and lived

with other men.

It is obvious that she was not depend on her legal husband for any support, financial orotherwise, during that entire period. In fact her whereabouts were unknown to her family.

She never attempted to communicate with them,, even to check up on the well-being of her

only daughter. Such being the case, Marilou G. Manlavi is not a dependent within the

contemplation of RA 8291 as to be entitled to Survivorship Benefits.

BOT Policy under GMA

In the revised IRR of the GSIS Charter (RA 8291), surviving spouses were disqualified fromgetting the usual half of the GSIS pensioners monthly benefit if the spouse earns more than

the minimum wage rate of national government employees or is getting pension from other

institutions, no matter what amount.

Board resolved to allow surviving spouses of member and pensioners to receive their monthlypension benefits even if they are gainfully employed and receiving other sources of income

Board recognized that gainful employment does not imply that s surviving spouse is nolonger dependent for support upon the deceased member or pensioner.

Family Code clearly defines that Support comprises everything indispensable for sustenance,dwelling, clothing, medical attendance, education and transportation, in keeping with the

financial capacity of the family.

The Board however placed a cap on the survivorship pension to avoid unsually largedisparities in pension benefits. In either case, the basic survivorship pension or the totalpension to be received by the dependent children shall not exceed 50% of current salary of

an undersecretary at Step 1 of the salary matrix under the Salary Standardization Law and its

amendments. The ceiling is based on the rank of an Undersecretary because this is the

highest career position in government.

Payment of the basic survivorship pension to the depend spouse shall be discontinued in casethe latter remarries, cohabits, or engages in common-law relationship.

Funeral

Shall be paid upon the death of:

a. An active member; orb. A member who has been separated from the service, but who is entitled to future separation

or retirement benefits; or

c. A member who is a pensioner (excluding survivorship pensioners); ord. 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 yearsservice regardless of age

The funeral benefit shall be paid to one of the following in the order in which they appear

hereinbelow:

a. The surviving spouse;b. The legitimate child who spent for the funeral services; orc. Any other person who can show incontrovertible proofs of having borne the funeral expenses

Adjudication of Claims

Jurisdiction?

GSIS has original and exclusive jurisdiction to settle any dispute arising under RA 8291 w/ respect to:

Coverage Entitlement to benefits Collection and payment of contributions Any other matter related to any or all of the foregoing which is necessary for their

determination

Prescriptive Period?

4 years from date of contingency except life and retirement which do not prescribe

Tax Exemption

Rubia vs GSIS

exemption of GSIS from execution does not cover refund of amortization payementCity of Davao vs RTC

on real property taxes, GSIS tax exempt status in previous law was withdrawn under RA 7180lbut restored under sec 39 RA 8291

Legal Fees

AM No 08-2-01-0, February 11, 2010

FactsGSIS seeks exemption from the payment of legal fees imposed on government-owned or controlled

corporations under sec 22, Rule 141 (Legal Fees) of the Rules of Court, GSIS anchors its petition on sec

39 of its charter RA 8291.

GSIS vs NLRC

Private respondents were security guards of a security agency assigned to Tacloban branch ofGSIS

The security guard thereafter filed an illegal dismissal against the agency and GSIS,separation pay, salary differential, 13h month and unpaid salary.

GSIS filed the present petition contending the error committed because it is exempt fromexecution per charter

SC

The fact that there is no actual and direct employer-employee relationship between petitionerand respondents does not absolve the former from liability for the latters monetary claims.

When petitioner contracted DNI, Securitys services, petitioner became an indirect employer

of respondent, pursuant to Art 107 of the Labor Code

After DNL, Security failed to pay respondents the correct wages and other monetary benefits,petitioner, as principal, became jointly and severally liable, as provided in Art 106 and 109 of

the Labor Code

Citing GSIS vs RTC of Pasic, SC did not agree with petitioner that the enforcement of thedecision is impossible because its charter unequivocally exempts it from execution

Petitioners charter should not be used to evade its liabilities to its employees, as mandatedby the Labor Code.

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


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use of the period during which he rendered 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 workerscreditable 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 membership

shall be considered once only (sec. 3)

Overlapping period refers to the period during which a worker contributes simultaneously to GSIS and

SSS

The totalization of service credits is only resorted to when the retiree does not qualify forbenefits in either or both of the Systems

If a person is qualified to receive benefits granted by GSIS if such right has not yet beenexercised, then this principle does not apply.

Gamogamo vs PNOC, GR No 141707, May 7, 2002

Held:

The totalization of service credits was resorted to only when the retiree did not qualify forbenefits in either or both the SSS and the GSIS. In this case, petitioner was qualified toreceive benefits granted by the GSIS, if such right had not yet been exercised. In any case,

petitioners 14 years of service with the DOH may not remain uncompensated because it may

be recognized by the GSIS pursuant to sec 12 of Government Insurance Act of 1977, as may

be determined by the GSIS. Since petitioner may be entitled to some benefits from the GSIS,

he cannot avail of the benefits under RA No 7699.

Pointers: Finals

60% M&Q

40% Essay

1. Jurisdiction of GSIS2. Employment in SS Law def

emp services exclude

from coverage

3. Def of Employer4. Sickness Benefit maximum days5. Totalization RA 1699 resorted6. Employee and Employer relationship under SS Law

Who determines

Effect of final judgment in NLRC

7. Compulsory coverage GSIS8. New Benefits of GSIS9. Sec. 5 of SS Law Appeal of decision of SSC10. Primary Ben SS Law11. Effectivity of Coverage as compulsory overage in SS Law12. Prescriptive Period of GSIS

13. COA Disallowances GSIS14. Advances: sickness and maternity15. Primary ben in GSIS16. Claims jurisdiction SSS17. Ortega vs SSC

Distinction for claims in LC and SSS

18. Consent of SSS in any criminal action19. Compulsory Coverage of Judges20. Golf Atlantic Dacion en pago case21. Rep vs Aisan Pro Coop Case22. Separation for Cause GSIS

III

23. Defenses of lack of criminal intent of CF24. Asia Pro Case25. Choa Case

IV

26. Independent Contracting and Labor onlyRequirement

In relation to SS Law

Employee excluded

27. 4 Q: on maternity leave1. Who will qualify2. Requirement of3. Semester of contensency

Essay:

1. Prescription GSIS2. Director of Corp sued (Garcia vs SSC)3. Purely Casual Employee not purposes of business (Mansal vs L-8017 4-30-1995 en banc4. GSIS vs NLRC security guards case

Documents

The GSIS and RA 8291