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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 1146
PRESIDENTIAL DECREE NO. 1146 -
AMENDING, EXPANDING, INCREASING AND INTEGRATING THE SOCIAL SECURITY AND
INSURANCE BENEFITS OF GOVERNMENT EMPLOYEES AND FACILITATING THE PAYMENT
THEREOF UNDER COMMONWEALTH ACT NO. 186, AS AMENDED, AND FOR OTHER
PURPOSES
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chanroblesvirtualawlibrary
WHEREAS,
the Government Service Insurance System in promoting the efficiency and
welfare of the employees of the Government of the Philippines,
administers the laws that grant to its members social security and
insurance benefits;chanroblesvirtualawlibrary
WHEREAS, it is necessary to preserve at all times the actuarial
solvency of the funds administered by the System; to guarantee to the
government employee all the benefits due him; and to expand and
increase the benefits made available to him and his dependents to the
extent permitted by available resources;chanroblesvirtualawlibrary
WHEREAS, provisions of existing laws have impeded the efficient and
effective discharge by the System of its functions and have unduly
hampered the System from being more responsive to the dramatic changes
of the times and from meeting the increasing needs and expectations of
the Filipino public servant;chanroblesvirtualawlibrary
WHEREAS, provisions of existing laws that have prejudiced, rather than
benefited, the government employee; restricted, rather than broadened,
his benefits, prolonged, rather than facilitated the payment of
benefits, must now yield to his paramount welfare;chanroblesvirtualawlibrary
WHEREAS, the social security and insurance benefits of government
employees must be continuously re-examined and improved to assure
comprehensive and integrated social security and insurance programs
that will provide benefits responsive to their needs and those of their
dependents in the event of sickness, disability, death, retirement, and
other contingencies; and to serve as a filing reward for dedicated
public service;chanroblesvirtualawlibrary
WHEREAS, in the light of existing economic conditions affecting the
welfare of government employees, there is need to expand and improve
the social security and insurance programs administered by the
Government Service Insurance System, specifically, among others, by
increasing pension benefits, expanding disability benefits, introducing
survivorship benefits, introducing sickness income benefits, and
eventually extending the compulsory coverage of these programs to all
government employees regardless of employment status.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic
of the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby order and decree the following:cralaw:red
Section 1. Title. — The short title of this Act shall
be the "Revised Government Service Insurance Act of 1977." chanroblesvirtualawlibrary
A. DEFINITIONS
Section 2. Definition of Terms. — Unless the context
otherwise indicates, the following terms shall mean:cralaw:red
(a) System — The Government Service Insurance System
created and established by Commonwealth Act No. 186;chanroblesvirtualawlibrary
(b) Board — The Board of Trustees of the Government
Service Insurance System;chanroblesvirtualawlibrary
(c) Employer — The National Government, its political
subdivisions, branches, agencies or instrumentalities, corporations
owned and/or controlled by the Government, the Philippine Tuberculosis
Society, the Philippine National Red Cross and the Philippine Veterans
Bank;chanroblesvirtualawlibrary
(d) Employee — any person in the service of an
employer who receives compensation for such service;chanroblesvirtualawlibrary
(e) Member — any person compulsorily covered by the
System under Section 3 of this Act;chanroblesvirtualawlibrary
(f) Dependent — the legitimate, legitimated, legally
adopted, acknowledged natural or illegitimate child who is unmarried,
not gainfully employed, and not over twenty-one years of age or is over
twenty-one years of age but physically or mentally incapacitated and
incapable of self-support; the legitimate spouse dependent for support
upon the member, and the legitimate parent/s wholly dependent upon the
member for support;chanroblesvirtualawlibrary
(g) Primary beneficiaries — the dependent spouse
until he marries and the dependent children;chanroblesvirtualawlibrary
(h) Secondary beneficiaries — the dependent parents
and legitimate descendants other than dependent children;chanroblesvirtualawlibrary
(i) Compensation — the basic pay or salary received
by an employee, pursuant to his employment/appointment/s, excluding per
diems, bonuses, overtime pay, and allowances; chanroblesvirtualawlibrary
(j) Contribution — the amount payable to the System
by the member and the employer in accordance with section five of this
act;chanroblesvirtualawlibrary
(k) Average monthly compensation — the quotient after
dividing the aggregate compensations received by the member for the
last three years immediately preceding his
death/separation/disability/retirement, by the number of months he
received said compensation, or three thousand pesos, which ever is
smaller;chanroblesvirtualawlibrary
(l) Revalued average monthly compensation — an amount
equal to one hundred seventy percent of the first two hundred pesos of
the average monthly compensation plus one hundred percent of the
average monthly compensation in excess of two hundred pesos;chanroblesvirtualawlibrary
(m) Lump sum — the present value of the basic monthly
pensions for five years discounted at a rate of interest to be
determined by the System but not less than six percent per annum;chanroblesvirtualawlibrary
(n) Pensioner — any person who receives old-age or
disability pension whether in lump sum or otherwise;chanroblesvirtualawlibrary
(o) Disability — any loss or reduction of earning
capacity due to impairment of the normal functions of the physical
and/or mental faculties which reduces a member's ability to engage in
any gainful occupation;chanroblesvirtualawlibrary
(p) Total disability — accrues or arises when the
loss or reduction of earning capacity amounts to at least seventy-five
percent; or when the aggregate loss or reduction or earning capacity
resulting from more than one injury and/or disease amounts to at least
one hundred percent;chanroblesvirtualawlibrary
(q) Permanent total disability — accrues or arises
when recovery from the impairment mentioned in section 2(o) is
medically remote;chanroblesvirtualawlibrary
(r) Temporary total disability — accrues or arises
when the impaired physical and/or mental faculties can be rehabilitated
and/or restored to their normal functions;chanroblesvirtualawlibrary
(s) Permanent partial disability — accrues or arises
when the loss reduction of earning capacity amounts to less than
seventy-five percent or when the aggregate loss or reduction of earning
capacity resulting from more than one injury and/or disease-amounts to
less than one hundred percent, as a result of an irrecoverable
anatomical loss;chanroblesvirtualawlibrary
B. COVERAGE OF THE SYSTEM
Section 3. Compulsory Coverage. — Membership in the
System shall be compulsory for all permanent employees below 60, years
of age upon appointment to permanent status: Provided, That upon
approval by the President of the Philippines and subject to the
availability of funds, compulsory coverage may be extended to
non-permanent employees of national government agencies and local
governments, either simultaneously in phases or by groups; Provided,
Further, That non-permanent employees of government-owned or control
corporations may be covered upon approval by the System upon request of
their respective Governing Boards; Provided, Finally, that the coverage
of temporary employees under R.A. No. 4968 shall remain in force. chanroblesvirtualawlibrary
Section 4. Effect of Separation from the Service. — A
member shall continue to be a member, notwithstanding his separation
from the service and, unless the terms of his separation provide
otherwise, he shall be entitled to whatever benefits which shall have
accrued or been earned at the time of his separation in the event of
any contingency compensable under this Act.
C. SOURCES OF FUNDS
Section 5. Contributions. — (a) It shall be mandatory
for the employee to pay the monthly contributions specified in the
following schedule:cralaw:red
Monthly Percentage of
Compensation Monthly Compensation
Payable by
Employee Employer
I. P200 or less
7.5% 10.5%
II. Over P200 up to P3000
8.5% 9.5%
III. Over P3000
First P3000 8.5%
9.5%
In Excess of P3000
3% 9.5%
(b) The Employer shall include in its annual
appropriation the necessary amounts for its share of the contributions
indicated above, plus any extra premiums that may be required on
account of the hazards or risks of its employees' occupation plus the
additional amounts, if any, required in the next following paragraph
and shall remit the same to the System: Provided, That, if after an
examination of its financial condition, the System finds that the
employer cannot afford to pay said contributions in full, then it shall
pay only such rates of contributions as the System may consider within
its capacity to pay. In case of such reduction, the benefits payable to
the member and/or his beneficiaries shall be adjusted actuarially in
accordance with the rules and regulations prescribed by the System.
(c) For the amounts of pensions corresponding to the
services rendered by a member prior to June Sixteen, nineteen hundred
and fifty-one, increases in retirement benefits provided for in
Republic Act numbers forty-nine and Presidential Decree number seven
twelve, the National Government shall pay the System and in such manner
as may be agreed upon by the National Government and the System.
Section 6. Collection and Remittance of
Contributions. — (a) It shall be compulsory upon the employer to deduct
and withhold each month from the monthly salary of each employee the
contributions payable by him and to remit the same and its share to the
System within the first ten days of each calendar month following the
month to which the contributions apply. The remittance of the
contributions may be made in advance quarterly or semi-annually or
annually, the contributions payable by the employee to be advanced by
his employer: Provided, That, upon separation of an employee, any
contributions so paid in advance but not due shall be credited or
refunded to his employer. The remittance by the employer of said
contributions to the system shall be in preference to the payment of
other obligations, except salaries and wages of its employees.
(b) In case an employer defaults in the payment of
the obligations to the System, the Secretary of Finance or the Chairman
of the Commission on Audit shall take such steps as may be necessary to
have said obligation paid promptly. Said officials or their duly
designated representatives are hereby authorized and directed to
withhold from the revenues and/or incomes of a defaulting employer such
amounts as may be necessary to pay its obligations under this Act and
remit the same immediately to the System. In case of insolvency of an
employer, its obligations under this Act shall be paid in preference to
all other obligations, except salaries and wages of its employees.
Section 7. Penalty for Non-remittance or Delayed
Remittances. — Unremitted collections shall earn such interest as the
Board may prescribe, not exceeding two percent per month from their due
date to the date of payment, payable by the employer. chanroblesvirtualawlibrary
Section 8. Government Guarantee. — The Government of
the Republic of the Philippines are hereby guarantees the fulfillment
of the obligations of the System to its members as and when they fall
due.
D. BENEFITS
Section 9. Computation of Basic Monthly Pension. —
(a) The basic monthly pension is equal to:cralaw:red
(1) thirty-seven and one-half percent of the revalued
average monthly compensation; plus
(2) two and one-half percent of said revalued average
monthly compensation for each year of service in excess of fifteen
years: Provided, That, the basic monthly pension shall not exceed
ninety percent of the average monthly compensation. chanroblesvirtualawlibrary
(b) The basic monthly pension may be adjusted upon
the recommendation of the President and General Manager of the System
and approved by the President of the Philippines accordance with the
rules and regulations prescribed by the System.
Section 10. Computation of Service. — the computation
of service for calculating the pension shall be from the date of
original service with an employee; including:cralaw:red
(1) periods of honorable service in the Philippines
under the authority of the United States Government if rendered prior
to July four, nineteen hundred and forty-six; and
(2) period from January one, nineteen hundred and
forty-two, to February twenty-eight, nineteen hundred and forty-six for
those who were in the service on December eight, nineteen hundred and
forty-one;chanroblesvirtualawlibrary
but excluding:
(i) period of military service for which an employee
receives separation, retirement or disability pay; and
(ii) periods of service rendered after June sixteen,
nineteen hundred and fifty-one during which contributions were not
required, unless the contributions with interest be later on paid to
the System. chanroblesvirtualawlibrary
For the purpose of this section, the term service shall include full
time service with compensation: Provided, That part-time and other
services with compensation may be included under such rules and
regulations prescribed by the System.
RETIREMENT BENEFITS
Section 11. Conditions for Old-Age Pension. — (a)
Old-age pension shall be paid to a member who:cralaw:red
(1) has at least fifteen years of service;chanroblesvirtualawlibrary
(2) is at least sixty years of age; and
(3) is separated from the service.
(b) Unless the service is extended by appropriate
authorities, retirement shall be compulsory for an employee at
sixty-five years of age with at least fifteen years of service:
Provided, That if he has less than fifteen years of service, he shall
be allowed to continue in the service to complete the fifteen years.
Section 12. Old-Age Pension. — (a) A member entitled
to old-age pension shall receive the basic monthly pension for life but
in no case for a period less than five years: Provided, That, the
member shall have the option to convert the basic monthly pensions for
the first five years into a lump sum as defined in this Act: Provided,
further, That, in case the pensioner dies before the expiration of the
five-year period, his primary beneficiaries shall be entitled to the
balance of the amount still due to him. In default of primary
beneficiaries, the amount shall be paid to his legal heirs.
(b) A member who has rendered at least three years
but less than fifteen years of service at the time of separation shall,
upon reaching sixty years of age or upon separation after age sixty,
receive a cash payment equivalent to one hundred percent of his average
monthly compensation for every year of service with an employer. chanroblesvirtualawlibrary
(c) If a pensioner receiving a monthly pension is
re-employed by an employer, the payment of his pension shall be
suspended. When a pensioner who receives a lump sum is re-employed by
an employer prior to the expiration of the period covered by such
lump-sum, he shall refund to the System the amount corresponding to the
unexpired period. In either case, when his compensation is less than
the pension, he shall receive the difference: Provided, That, upon the
termination of his re-employment, the pension shall be resumed.
Section 13. Retirement Option. — Employees who are in
the government service upon the effectivity of this Act shall, at the
time of their retirement, have the option to retire under this Act or
under Commonwealth Act No. 186, as previously amended.
PERMANENT DISABILITY BENEFITS
Section 14. Conditions for Permanent Disability
Benefits. — A member shall be entitled to the permanent disability
benefits effective from the date of his disability, provided, that:cralaw:red
(1) he has paid at least thirty-six monthly
contributions within the five-year period immediately preceding his
disability; or
(2) he has paid a total of at least one-hundred
eighty monthly contributions prior to his disability; and
(3) his disability is not compensable under any other
law.
Section 15. Permanent Disability Benefits. — (a) A
member who becomes permanently disabled before he is qualified for
old-age pension but entitled to permanent disability benefits shall
receive the basic monthly pension for life, if the disability is total.
If the disability is partial, the basic monthly pension shall be
payable in accordance with the rule and regulations prescribed by the
System. chanroblesvirtualawlibrary
(b) If at the time of his disability, he is qualified
for old-age pension, he shall be entitled to the basic monthly pension
for life but in no case for a period less than five years: Provided,
That, the member shall have the option to convert the basic monthly
pensions for the first five years into a lump sum as defined in this
Act.
(c) The basic monthly pension shall be suspended when:cralaw:red
(1) he is re-employed by an employer and receives a
monthly compensation at least equal to his basic monthly pension,
otherwise, he shall receive the difference; or
(2) he recovers from his disability as determined by
the System, whose decision shall be final and binding; or
(3) he fails to present himself for medical
examination when required by the System.
(d) When at the time of his disability, he is not
entitled to any of the benefits under paragraphs (a) and (b) of this
section, he shall receive a cash payment equivalent to one hundred
percent of his average monthly compensation for each year service he
paid contributions, but not less than five hundred pesos.
SURVIVORSHIP BENEFITS
Section 16. Survivorship Benefits. — When a member or
pensioner dies, the beneficiary shall be entitled to survivorship
benefits provided for in sections seventeen and eighteen hereunder. The
survivorship pension shall consist of: chanroblesvirtualawlibrary
(1) basic survivorship pension which is fifty percent
of the basic monthly pension; and
(2) dependent's pension not exceeding fifty percent
of the basic monthly pension payable in accordance with the rules and
regulations prescribed by the System.
Section 17. Death of a Member. — (a) Upon the death
of a member, the primary beneficiaries shall be entitled to:cralaw:red
(1) the basic monthly pension which is guaranteed for
five years; Provided, That, at the option of the beneficiaries, it may
be paid in lump sum as defined in this Act: Provided, further, That,
the member is entitled to old-age pension at the time of his death; or
(2) the basic survivorship pension which is
guaranteed for thirty months and the dependent's pension: Provided,
That, the deceased had paid at least thirty-six monthly contributions
within the five-year period immediately preceding his death, or total
of at least one hundred eight monthly contribution prior to his death;chanroblesvirtualawlibrary
(b) At the end of the guaranteed periods mentioned in
the preceding sub-section (a), the survivorship pension shall be paid
as follows:cralaw:red
(1) when the dependent spouse is the only survivor,
he shall receive basic survivorship pension for life or until he
remarries;chanroblesvirtualawlibrary
(2) when only dependent children are the survivors,
they shall be entitled to the survivorship pension for as long as they
are qualified; chanroblesvirtualawlibrary
(3) when the survivors are the dependent spouse and
the dependent children, they shall be entitled to the survivorship
pension so long as there are dependent children and, thereafter, the
surviving spouse shall receive the basic survivorship pension for life
or until he remarries.
(c) In the absence of primary beneficiaries, the
secondary beneficiaries designated by the deceased and recorded in the
System, shall be entitled to:cralaw:red
(1) a cash payment equivalent to thirty times the
basic survivorship pension when the member is qualified for old-age
pension; or
(2) a cash payment equivalent to fifty percent of the
average monthly compensation for each year he paid contributions, but
not less than five hundred pesos; Provided, That, the member paid at
least thirty-six monthly contributions within the five-year period
immediately preceding his death or paid a total of at least one hundred
eighty monthly contributions prior to his death.
(d) When the primary beneficiaries are not entitled
to the benefits mentioned in paragraph (a) of this section, they shall
receive a cash payment equivalent to one hundred percent of the average
monthly compensation for each year the member paid contributions, but
not less than five hundred pesos. In the absence of primary
beneficiaries, the amount shall revert to the funds of the System.
Section 18. Death of a Pensioner. — Upon the death of
a pensioner, the primary beneficiaries shall receive the applicable
pension mentioned under paragraph (b) of section seventeen of this Act:
Provided, That, the dependent spouse shall not be entitled to said
pension if his marriage with the pensioner is contracted within three
years before the pensioner qualified for the pension. When the
pensioner dies within the period covered by the lump sum, the
survivorship pension shall be paid only after the expiration of the
said period. This shall also apply to the pensioners living as of the
effectivity of this Act, but the survivorship benefit shall be based on
the monthly pension being received at the time of death. chanroblesvirtualawlibrary
FUNERAL BENEFIT
Section 19. Funeral benefit. — A funeral benefit of
one thousand pesos shall be paid upon the death of a member of
pensioner.
SICKNESS BENEFITS
Section 20. Sickness Income Benefit. — (a) A member
who suffers a non-work connected sickness or injury resulting in
temporary total disability, shall be entitled to sixty-five percent of
his current daily compensation for each day or fraction thereof of
sickness or injury but not exceeding sixty days in one calendar year
after exhausting all his sick leave credits but not earlier than the
forth day of his sickness or injury; provided he has paid at least six
monthly contributions in the twelve-month period immediately preceding
his sickness or injury: Provided, however, That, the member cannot
enjoy the sickness income benefits and sick leave pay simultaneously;chanroblesvirtualawlibrary
(b) The sickness income benefit shall not less than
four pesos nor more than twenty pesos a day.
(c) The notices required of the member and the
employer, the mode of payment, and the other requirements for
entitlement to sickness income benefits shall be provided in the rules
and regulations prescribed by the System.
LIFE INSURANCE BENEFITS
Section 21. Compulsory Life Insurance. — Subject to
the rules and regulations prescribed by the System, all employees shall
be compulsorily covered with life insurance which shall automatically
take effect as follows: chanroblesvirtualawlibrary
(1) for those employed after this Act, their
insurance shall take effect on the date of their employment;chanroblesvirtualawlibrary
(2) for those whose insurance matured and not renewed
prior to this Act, their insurance shall be deemed renewed on the day
following the effectivity of this Act;chanroblesvirtualawlibrary
(3) for those whose insurance will mature or will
expire after this Act, their insurance shall be deemed renewed on the
day following or expiry date of their previous insurance;chanroblesvirtualawlibrary
(4) for those without any life insurance as of the
effectivity of this Act, their insurance shall take effect on the day
following said effectivity.
Section 22. Optional Life Insurance. — Subject to the
rules and regulations prescribed by the System, a member may at any
time apply for optional life insurance for himself and/or his
dependents and the payment of the premiums therefor may be made by the
insured or his employer and/or any person acceptable to the System.
E. ADJUDICATION OF CLAIMS AND DISPUTES
Section 23. Facility of Payment. — The System shall
prescribe such rules and regulations to facilitate payment of benefits,
proceeds, and claims under this Act and any other laws administered by
the System. Payments made by the system prior to its receipt of an
adverse claim, to a beneficiary or claimant subsequently found not
entitled thereto, shall free the System from any liability to the
person or persons legally entitled to such payment who shall, however,
have a right to institute the appropriate action in a court of law
against the ineligible recipient of the benefits, proceeds, or claims.
Section 24. Settlement of Disputes. — The System
shall have original and exclusive jurisdiction to settle any dispute
arising under this Act.
The Board may designate any member of the Board of official of
the System to act as hearing officer to receive evidence; make finding
of facts and submit recommendations thereon. The hearing officer shall
submit his findings, recommendations, together with all the documentary
and testimonial evidence, to the Board within thirty working days from
the time the parties have closed their respective evidence and filed
their last pleading. The Board shall decide the case within thirty days
therefrom. The cases heard directly by the Board shall be decided
within thirty working days from the time they are submitted by the
parties for decision.
Section 25. Appeals. — Within fifteen days from
receipt of notice of decision or award, the aggrieved party may appeal
the same to the Court of Appeals on questions of law and facts
following the procedures for appeals from the Court of First Instance
to the Court of Appeals as far as practicable and consistent with the
purposes of this Act. If the appeal is only on questions of law, the
same shall be brought directly to the Supreme Court on certiorari. No
appeal bond shall be required. The appeal shall take precedence over
all other cases except criminal cases wherein the penalty of life
imprisonment or death has been imposed by the trial court. Appeal shall
not stay the decision of the Board unless so ordered by the Board, by
the Court of Appeals or by the Supreme Court.
Section 26. Execution of Decision. — When no appeal
is perfected and there is no order to stay by the Board, by the Court
of Appeals or by the Supreme Court, any decision or award of the Board
shall be enforced and executed in the same manner as decisions of the
Court of First Instance. For this purpose, the Board shall have the
power to issue to the city or provincial sheriff or its appointed
sheriff such writs of execution as may be necessary for the enforcement
of such decision or award, and any person who shall fail or refuse to
comply with such decision, award, writ or process after being required
to do so, shall, upon application by the System, be punished for
contempt. chanroblesvirtualawlibrary
Section 27. Oaths, Witnesses, and Production of
Records. — When authorized by the Board, an official or employee of the
System shall have the power to administer oath and affirmation, take
dispositions, certify to official acts, and issue subpoena and subpoena
duces tecum to compel the attendance of witnesses and the production of
books, papers, correspondencies, and other records deemed necessary as
evidence in connection with any question arising under this Act. Any
case of contumacy shall be dealt with in accordance with the provisions
of section five hundred eighty of the Revised Administrative Code.
F. FUNDS OF THE SYSTEM
Section 28. Funds. — The funds administered by the
System shall consist of old-age, disability, survivorship, health
insurance, state insurance, life insurance and general insurance funds.
The reserves and/or networth of said funds shall be used to finance the
benefits administered by the System. For purposes of effective
administration of said benefits, any amount in excess of the required
reserves in any fund, as determined by the Actuary of the System, may
be subject to interfund borrowing at an imputed interest to be
determined by the Board.
Section 29. Deposit and Disbursements. — All revenues
collected and all accruals thereto shall be deposited, administered and
disbursed in accordance with the law. A maximum expenses loading of
twelve percent of the yearly revenues from all sources may be disbursed
for administrative and operational expenses except as may be otherwise
approved by the President of the Philippines on the basis of actuarial
and management studies.
Section 30. Investment of Funds. — Funds of the
System not needed to meet the current obligations may be invested under
such terms and conditions as may be determined by the Board.
Section 31. Records and Reports. — The System shall
keep and cause to keep such records as may be necessary for the purpose
of making actuarial studies, calculations and valuations of the funds
of the System including such data needed in the computation of rates of
disability, mortality, morbidity, separation and retirement among the
members and any other information useful for the adjustment of the
benefits of the members. Separate and distinct records of the operation
of each branch of social security and insurance shall be maintained.
The System shall also maintain appropriate books of accounts to record
its assets, liabilities, income, expenses, receipts and disbursement of
funds and other financial transactions and operations.
Section 32. Examination and Valuation of the Funds. —
The System shall make a periodic actuarial examination and valuation of
the funds of the System in accordance with accepted actuarial
principles.
Section 33. Exemption from Tax, Legal Process and
Lien. — It is hereby declared to be the policy of the State that the
actuarial solvency of the funds of the System shall be preserved and
maintained at all time and that the contribution rates necessary to
sustain the benefits under this Act shall be kept as low as possible in
order not to burden the members of the System and/or their employees.
Taxes imposed on the System tend to impair the actuarial solvency of
its funds and increase the contribution rate necessary to sustain the
benefits under this Act. Accordingly, notwithstanding any laws to the
contrary, the System, its assets, revenues including all taxes,
assessments, fees, charges or duties of all kinds. These exemptions
shall continue unless expressly and specifically revoked and any
assessment against the System as of the approval of this Act are hereby
considered paid. chanroblesvirtualawlibrary
The benefits granted under this Act shall not be subject, among
others, to attachment, garnishment, levy or other processes. This,
however, shall not apply to obligations of the member to the System, or
to the employer, or when the benefits granted herein are assigned by
the member with the authority of the System.
G. ADMINISTRATION
Section 34. Implementing Body. — The Government
Service Insurance System as created and established under Commonwealth
Act No. 186 shall implement the provisions of this Act.
Section 35. Powers and Functions of the System. — The
System shall have the following powers and functions specified in this
Act and the usual general corporate powers:cralaw:red
(a) To adopt, amend and rescind such rules and
regulations as may be necessary to carry out the provisions and
purposes of this Act;chanroblesvirtualawlibrary
(b) To adopt from time to time a budget for the
administration and operation of the System;chanroblesvirtualawlibrary
(c) To invest its funds, directly or indirectly, in
accordance with this Act;chanroblesvirtualawlibrary
(d) To acquire, utilize or dispose of, in any manner
recognized by law, real or personal properties in the Philippines or
elsewhere necessary to carry out the purposes of this Act;chanroblesvirtualawlibrary
(e) To conduct continuing actuarial and statistical
studies and valuations to determine the financial condition of the
System and taking into consideration such studies and valuations and
the limitations herein provided, re-adjust the benefits, contributions,
premium rates, interest rates or the allocation or the re-allocation of
the funds to the contingencies covered;chanroblesvirtualawlibrary
(f) To have the power of succession;chanroblesvirtualawlibrary
(g) To sue and be sued;chanroblesvirtualawlibrary
(h) To enter into, make, perform and carry out
contracts of every kind and description with any person, firm or
association or corporation, domestic or foreign;chanroblesvirtualawlibrary
(i) To carry on any other lawful business whatsoever
in pursuance of, or in connection with the provisions of this Act;chanroblesvirtualawlibrary
(j) To have one or more offices in and outside of the
Philippines, and to conduct its business and exercise its powers
throughout and in any part of the Republic of the Philippines and/or in
any or all foreign countries, states and territories;chanroblesvirtualawlibrary
(k) To borrow funds from any source, private or
government, foreign or domestic;chanroblesvirtualawlibrary
(l) To invest, own or otherwise participate in equity
in any establishment, firm or entity; to form, organize invest in,
establish and maintain subsidiary or subsidiaries;chanroblesvirtualawlibrary
(m) To exercise such powers and perform such acts as
may be necessary, useful, incidental or auxiliary to carry out the
provisions of this Act.
Section 36. The Board of Trustees; its Composition;
Tenure and Compensation. — The Corporate powers and functions of the
System shall be vested in, and exercised by the Board of Trustees
composed of the President and General Manager of the System and seven
other members to be appointed by the President of the Philippines,
three of whom shall represent three leading organizations or
associations of government employees. The Trustees shall elect from
among themselves a chairman and vice-chairman.
The Trustees, except the President and General Manager of the
system who shall cease as trustee upon his separation, shall hold for
three years or until their successors are duly appointed and qualified.
Vacancy, other than through the expiration of the term, shall be filled
for the unexpired term only. The members of the Board shall be entitled
to a per diem of five hundred pesos for each board meeting actually
attended by them, but not to exceed two thousand pesos a month, and
reasonable transportation and representation allowances as shall be
fixed by the Board.
The Board of Trustees as presently constituted shall continue to
hold office until their successors shall have been appointed and duly
qualified.
Section 37. Appointment, Qualifications, and
Compensation of the President and General Manager and of Other
Personnel. — The President and General Manager of the System shall be
the Chief Executive Officer of the System who shall be appointed by the
President of the Philippines. He shall be a person experienced in
technical and administrative fields related to the purposes of this Act.
The President and General Manager of the System shall be assisted
by one or more executive vice-presidents, senior vice-presidents and
vice-presidents who shall be appointed and removed by the President and
General Manager of the System with the approval of the Board.
The position classification and compensation rates of the
President and General Manager, and of the officers and employees of the
system shall be subject to approval of the President of the Philippines
under the provisions of P.D. No. 985. chanroblesvirtualawlibrary
Section 38. Powers and Duties of the President and
General Manager. — The president and General Manager of the System
shall among others, execute and administer the policies and resolutions
approved by the Board and direct and supervise the administration and
operations of the System. The President and General Manager of the
System, subject to the approval of the Board, shall appoint the
personnel of the System, remove, suspend or otherwise discipline them
for cause and prescribe their duties and qualifications to the end that
only competent persons may be employed.
Section 39. Auditor. — (a) The Chairman of the
Commission on Audit shall be the ex-officio auditor of the System. For
this purpose, he may appoint a representative who shall be the auditor
of the System, and the necessary personnel to assist said
representative in the performance of his duties. The number of salaries
of the auditor and said personnel shall be determined by the Chairman
of the Commission on Audit, subject to appropriation by the Board; in
case of disagreement, the matter shall be submitted to the president of
the Philippines whose decision shall be final. Said salaries and all
other expenses of maintaining the auditor's office shall be paid by the
System.
(b) The Chairman of the Commission on Audit of his
authorized representative, shall submit to the Board soon after the
close of each calendar year, an audited statement showing the financial
condition and progress of the System for the calendar year just ended.
Section 40. Legal Counsel. — The Government Corporate
Counsel shall be the legal counsel of the System. For the performance
of his duties and the services of the Legal Staff of the office of the
Government Corporate Counsel, the Board shall appropriate, and the
President and General Manager of the System shall remit, such amount as
shall be determined by the Government Corporate Counsel with the
approval of the Secretary of Justice.
H. GENERAL AND PENAL PROVISIONS
Section 41. Government Assistance to the System. —
The System may call upon any employer for such assistance as may be
necessary in the discharge of its duties and functions.
Section 42. Penalty. — (a) Any person found to have
participated directly or indirectly in the commission of fraud,
collusion, falsification, or misrepresentation in any transaction with
the System whether for him or for some other persons, shall suffer the
penalties provided for in Article one hundred seventy two of the
Revised Penal Code.
(b) Whoever shall obtain or receive any money or
check invoking any provision of this Act or any agreement thereunder,
without being entitled thereto with the intent to defraud any member,
any employer, the System, or any third party, shall be punished by a
fine of not less than five hundred pesos nor more than five thousand
pesos or by imprisonment of not less than six months nor more than one
year, or both, at the discretion of the court.
(c) Whoever fails or refuses to comply with the
provision of this Act or with the rules and regulations adopted by the
System shall be punished by a fine of not less than five hundred pesos
nor more than five thousand pesos, or by imprisonment of not less than
six months nor more than one year, or both, at the discretion of the
court.
(d) The treasurer, finance officer, cashier,
disbursing officer, or other employee who fails or refuses or delays by
more than three months, to deduct the contributions of the employee
shall be punished by a fine of not less than one thousand pesos nor
more than five thousand pesos, or by imprisonment of not less than one
year nor more than five years, or both, at the discretion of the court
and shall, moreover, be disqualified from holding public office and
from practising any profession or calling licensed by the Government.
(e) Any employee or member who receives or keeps fund
or property belonging, payable or deliverable to the System and
appropriates the same, or takes or misappropriates or uses the same to
any purpose other than that authorized by this Act, or permits another
person to take, misappropriate or use said fund or property by
expressly consenting thereto, or through abandonment or negligence, or
is otherwise guilty of the mis-appropriation of said fund or property,
in whole or in part, shall suffer the penalties provided in Article two
hundred seventeen of the Revised Penal Code.
(f) Any employee, who, after deducting the monthly
contribution or loan amortization from a member's compensation fails to
remit the same to the System within thirty days from the date they
should have been remitted under section 6(a) shall be presumed to have
misappropriated such contribution or loan amortization and shall suffer
the penalties provided in Article three hundred fifteen of the Revised
Penal Code.
(g) Criminal actions arising from violations of the
provisions of this Act may be commenced by the System or by the
aggrieved member, either under this Act or, in appropriate cases, under
the Revised Penal Code.
Section 43. Implementing Rules and Regulations. — The
implementing rules and regulations to carry out the provisions of this
Act shall be adopted and promulgated by the System not later than
ninety days after the approval of this Act.
Section 44. Non-impairment of Benefits. — Powers,
Jurisdiction, Rights, Privileges, Functions and Activities. — Nothing
in this Act shall be construed to repeal, amend or limit any provision
of existing laws, Presidential Decrees and Letters of Instructions, not
otherwise specifically inconsistent with the provisions of this
Act. chanroblesvirtualawlibrary
Section 45. Exclusiveness of Benefits. — Whenever
other laws provide similar benefits for the same contingencies covered
by this Act, the member who qualifies for the benefit shall have the
option to choose which benefits will be paid to him. However, if the
benefits provided by the law chosen are less than the benefits provided
under this Act, the System shall pay only the difference: Provided,
however, That, when the disability or death of an employee or member is
work-connected as defined in Presidential Decree No. 626, as amended,
he shall be entitled to the benefits therefore as provided herein,
chargeable against the State Insurance Fund.
Section 46. Appropriations. — There is hereby
appropriated for the current fiscal year, and annually thereafter, out
of any fund in the National Treasury or other depository not otherwise
appropriated, such sums as may be necessary to pay the contributions or
premiums and interests payable by each employer under this Act, as well
as obligations which the Republic of the Philippines assumes or
guarantees to pay under this Act.
Section 47. Saving Clause. — Should any provision of
this Act or any part thereof be declared invalid, the other provisions,
so far as they are separable from the invalid ones, shall remain in
force. chanroblesvirtualawlibrary
Section 48. Repealing Clause. — All laws or parts of
law specifically inconsistent herewith shall be considered amended or
repealed accordingly. chanroblesvirtualawlibrary
Section 49. Effectivity. — This Act shall take effect
upon its approval.
Done in the City of
Manila, Philippines, this 31st day of May, in the year of Our Lord,
nineteen hundred and seventy-seven.
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