Section 1.
Subsections (a), (d), and (f) of section two of Commonwealth Act
Numbered One hundred and eighty-six are hereby amended to read as
follows and subsection (g) is hereby added:
"Sec. 2.
Definitions. — When used in this Act the following terms shall, unless
the context otherwise indicates, have the following respective
meanings:
"(a) "Employer" shall mean the National or a local
government, an agency, board, or corporation controlled or owned by the
Government. "Employee" shall mean any Filipino citizen in the service
of said "employer".
"(d) "Member" shall mean any person insured in the
System.
"(f) "Membership policy" shall mean a life insurance
policy for an amount, the monthly premium of which is equivalent to
two, five or six per centum of an employee's monthly salary or
compensation.
"(g) "Regular officer" or "enlisted man" shall mean
one whose commission or enlistment is in the regular force of the Armed
Forces of the Philippines and not in the reserve force thereof."
Sec. 2. Section four of Commonwealth Act Numbered
One hundred and eighty-six is hereby amended to read as follows:
"Sec. 4.
Scope of application of System. — (a) Membership in the System shall be
compulsory upon all regularly and permanently appointed employees,
including those whose tenure of office is fixed or limited by law; upon
all teachers except only those who are substitutes; and upon all
regular officers and enlisted men of the Armed Forces of the
Philippines: Provided, That it shall be compulsory upon regularly and
permanently appointed employees of a municipal government below first
class only if and when said government has joined the System under such
terms and conditions as the latter may prescribe.
"(b) Membership in the System shall be appointed with
an elective official of the National Government or of a local
government that is a member of the System: Provided, That if he desires
to come within the purview of this Act, he must notify the System in
writing to that effect: Provided, further, That he complies with the
requirements of the System and that he is in the Government service
when his insurance takes effect: And provided, finally, That after his
admission into the System he shall be entitled to life insurance
benefit for which he shall pay either one per centum or three per
centum of his monthly salary, depending on the kind of insurance
selected by him, and his employer shall likewise pay for him the same
amount."
Sec. 3. Section five of Commonwealth Act Numbered
One hundred and eighty-six is hereby amended to read as follows:
"Sec. 5. (a)
Rates of contributions. — For the benefits described hereunder, each
employee who is a member of the System and his employer shall pay the
monthly rates of premiums specified in the following schedules:
MONTHLY PREMIUMS
___________________________________________________________
Percentage of monthly
Benefits salary payable by
— Remarks
Employee
Employer
I. Life Insurance
1 1 Payment of premiums shall begin
3 3
on the last day of the
5 0
calendar month preceding the
month when one's insurance
takes effect. Except as otherwise
provided in this Act, the
first rate shall apply to a
civilian employee insured on or
after the approval of this Act.
The second rate shall apply to
a civilian employee already
insured prior to the approval of
this Act unless he chooses
term insurance in which case
the first rate shall apply. The
third rate shall apply to a
regular officer or an enlisted man.
II. Retirement
insurance 6 If
employee's monthly salary is
P200 or less.
5 If employee's
monthly salary is
more than P200, but his premium
for this benefit shall not
exceed P37.50 per month.
"Payment of premiums for retirement insurance shall begin on the last
day of the third calendar month following the month of this Act was
approved or the employee entered the service, whichever is the later
date: Provided, however, That such premiums shall not be required of
Justices of the Supreme Court, elective officials, and regular officers
and enlisted men, who are hereby excluded from said benefit.
"(b) Premiums for optional insurance. — The amount of
premium on one's optional insurance described in section ten hereof
shall be as provided in his policy. The premiums on this optional
insurance shall be entirely borne by the insured.
"(c) Premiums for optional retirement annuity. — Each
employee may at his option and under such rules and conditions as the
System may prescribe deposit additional amounts from time to time, the
total of which shall not exceed ten per cent of the total salaries he
has received from his employer prior to his retirement. These deposits
shall be credited with interest of three per centum per annum,
compounded monthly, and together with said interest shall at the date
of his retirement be available to purchase in addition to the annuity
described in section eleven hereof such an annuity as he will elect and
the System will offer. In the event of his death or separation before
becoming eligible for retirement, the total amount so deposited, with
interest, shall be refunded to him or his beneficiaries as recorded in
his application for optional retirement annuity filed with the System.
"(d) Collection and remittance of premiums. — Each
employer concerned shall at the end of each month deduct and withhold
from the monthly salary of every employee in its service the premiums
payable by him in accordance with the preceding schedule plus the
additional premiums, if any, required in section seven hereof. It shall
advance and remit to the System beginning April 1 of each year and
quarterly thereafter the monthly premiums for the current quarter,
together with its corresponding shares as described in the said
schedule, plus extra premiums and additional amounts, if any, as
required in the following sections: Provided, That if such employee is
separated from the service, then any premiums not due and payable shall
be refunded or credited to his employer. A member no longer in the
service may pay his premiums directly to the System or as provided
herein below.
"Except as otherwise specified herein, payment of any premium on one's
optional insurance and/or retirement annuity in the System may be made
to an employer whose location is convenient to the member, and such
employer is hereby authorized and required to accept such payment,
issue receipt therefor, and remit the same immediately to the System."
Sec. 4. Section six of Commonwealth Act Numbered
One hundred and eighty-six is hereby amended to read as follows:
"Sec. 6. Employer's premiums. — Each employer
shall include in its annual appropriation and remit to the System the
necessary amounts for its corresponding shares of the premiums
described in subsection (a) of section five, plus any extra premiums
that may be required on account of the hazards or risks of its
employees' occupations, plus the additional amounts, if any, required
in the next following section: Provided, however, That if one's
compulsory membership policy matures, the employer's premium for his
life insurance shall cease until he acquires a new membership policy,
which, however, shall be granted only upon satisfactory evidence of
insurability: And provided, finally, That in case of transfer of an
employee from one employer to another, the former employer shall be
relieved of paying further premiums for him and the new employer
whether or not it has joined the System, shall assume the same,
appropriating therefor the necessary amount.
"The Board shall have the full power and authority to adopt rules and
regulations for the collection and remittance of premiums or other
amounts payable as provided in this Act and/or any indebtedness to the
System, and impose a fine not exceeding the loss or damage that the
System may suffer on the official or officials responsible for the
delay or failure in collecting or remitting said premiums or
indebtedness without prejudice to such other punishment as may be
imposed in accordance with existing Civil Service rules and
regulations. Notwithstanding any law to the contrary, the Board may
give extra remuneration to officials in charge of collecting and
remitting said premiums, amounts, or indebtedness, if by so doing the
best interest of the System shall be advanced."
Sec. 5. Section seven of Commonwealth Act Numbered
One hundred and eighty-six is hereby amended to read as follows:
"Sec. 7. Additional premiums. — (a) For the amount
of annuity corresponding to the services rendered by an employer prior
to the approval of this Act, his employer shall pay under such rules
and regulations as the System may prescribe the necessary additional
amounts or premiums.
"(b) The Board is hereby authorized and empowered, in
carrying out the provisions of this Act, to supplement the individual
premiums of members with moneys received in the form of donations,
gifts, legacies, or bequests, or otherwise, and to receive and deposit
to the credit of the System, and invest all moneys which may be donated
by private individuals, organizations, or corporations.
"(c) All savings in appropriations for salaries and
wages that may be realized by each employer during each fiscal year
shall be transferred by said employer to the System which shall use the
same for the payment of benefits provided in this Act.
Sec. 6. Section eight of Commonwealth Act Numbered
One hundred and eight-six is hereby amended to read as follows:
I — Life Insurance Benefit
Sec. 8. (a) Compulsory membership insurance. — An
employee whose membership in the System is compulsory shall be
automatically insured on the first day of the seventh calendar month
following the month he was appointed or on the first day of the sixth
calendar month if the date of his appointment is the first day of the
month: Provided, That his medical examination, if required, has been
approved by the System.
(b) Optional membership insurance. — The life
insurance of an employee whose membership in the System is optional
shall take effect, if he is alive, on the first day of the calendar
month following the calendar month during which the first premium
thereon was paid to the System: Provided, That his application for
membership and his medical examination, if required, have been approved
by the System.
(c) Amount and kind of insurance. — Compulsory
membership insurance shall be term insurance of an amount equal to the
employee's current annual salary: Provided, however, That this
subsection shall not apply to any civilian employee who prior to the
approval of this Act is already insured in the System nor to a regular
officer or an enlisted man: And provided, further, That upon his
request a civilian employee may have his old membership insurance
changed into a paid-up endowment insurance and be reinsured under a
term insurance on submission of satisfactory evidence of insurability
unless such request be made within one year from the date of approval
of this Act. Optional membership insurance shall be, as he may select,
either the term insurance described above or an endowment insurance
whose amount shall be whatever the six per centum monthly premium will
buy.
Sec. 7. Section ten of Commonwealth Act Numbered
One hundred and eighty-six is hereby amended to read as follows:
"Section 10.
Optional insurance. — Upon application to the Board and on satisfactory
evidence of insurability, each member may obtain, at any time,
additional life insurance as he may desire, subject to the provision of
section fourteen hereof: Provided, That the amount of said additional
life insurance shall be in multiple of one hundred pesos and that its
aggregate amount shall not exceed an amount, to the nearest hundred
pesos, equal to his current annual salary: And provided, further, That
the full amount of the premiums on such additional insurance shall be
paid by said member, and the amount thereof may be deducted from his
pay or compensation, when expressly authorized by him.
Sec. 8. The following new sections are hereby
inserted in Commonwealth Act Numbered One hundred and eighty-six:
II. — Retirement Insurance Benefit
"Section 11.
(a) Amount of annuity. — Upon retirement a member shall be
automatically entitled to a life annuity payable monthly for at least
five years and thereafter as long as he live. The amount of the monthly
annuity at the age of fifty-seven years shall be twenty pesos, plus,
for each year of service rendered after the approval of this Act, one
and six-tenths per centum of the average monthly salary received by him
during the last five years of service, plus, for each year of service
rendered prior to the approval of this Act, if said service was at
least seven years, one and two-tenths per centum of said average
monthly salary: Provided, That this amount shall be adjusted
actuarially if retirement be at an age other than fifty-seven years:
Provided, further, That the maximum amount of monthly annuity at age
fifty-seven shall not in any case exceed two-thirds of said average
monthly salary or five hundred pesos, whichever is the smaller amount:
And provided, finally, That retirement benefit shall be paid not
earlier than one year after the approval of this Act. In lieu of this
annuity, he may prior to his retirement elect one of the following
equivalent benefits:
"(1) Monthly annuity during his lifetime;
"(2) Monthly annuity during the joint-lives of the
employee and his wife or other designated beneficiary, which annuity,
however, shall be reduced upon the death of either to one-half and be
paid to the survivor;
"(3) For those who are at least sixty-five years of
age, lump sum payment of present value of annuity for first five years
and future annuity to be paid monthly; or
"(4) Such other benefit as may be approved by the
System.
"(b) Survivors benefit. — Upon death before he
becomes eligible for retirement, his beneficiaries as recorded in the
application of retirement annuity filed with the System shall be paid
his own premiums with interest of three per centum per annum,
compounded monthly. If on his death he is eligible for retirement, then
the automatic retirement annuity or the annuity chosen by him
previously shall be paid accordingly.
"(c) Disability benefit. — If he becomes permanently
and totally disabled and his services are no longer desirable, he shall
be discharged and paid his own contributions with interest of three per
centum per annum, compounded monthly, if he has served less than five
years; if he has served at least five years but less than fifteen
years, he shall be paid also the corresponding employer's premiums,
without interest, described in subsection (a) of section five hereof;
and if he has served at least fifteen years he shall be retired and be
entitled to the benefit provided under subsection (a) of this section.
"(d) Upon dismissal for cause or on voluntary
separation, he shall be entitled only to his own premiums and voluntary
deposits, if any, plus interest of three per centum per annum,
compounded monthly.
"Section 12. Conditions for retirement. — (a) On
completion of thirty years of total services and attainment of age
fifty-seven years, a member shall have the option to retire. In all
cases, the last three years of service before the retirement must be
continuous, and he has made contributions for at least five years,
which contributions may, upon his request approved by the Board, be
deducted from his life annuity under such terms and conditions as the
Board may prescribe. In the case of those who are at least fifty-seven
years of age a period of service shorter than thirty years may be
allowed, provided that each year decrease in service shall be
compensated by one-half year increase in age over fifty-seven years. A
younger age of retirement may be permitted provided that each year
decrease below fifty-seven years shall be compensated by one year
increase in service over thirty years. If an employee is a laborer or
one whose work is mostly manual, the ages mentioned above may be
declared by not more than five years at the discretion of the System.
In all cases no one shall be entitled to retirement benefit if his age
is below fifty-two years or his total service is less than fifteen
years.
"(b) The employer concerned may request the
retirement of any such employee described in the preceding subsection
who, by reason of a disqualification, is unable to perform
satisfactorily and efficiently the duties of his position or some other
position of the same grade or class as that occupied by the employee
and to which he could be assigned, but such request shall be submitted
to the Civil Service Board of Appeals only after the said employee had
been notified in writing of the proposed retirement. No such employee,
however, shall be so retired unless the Civil Service Board of Appeals
has given him a hearing and found him after examination that he is so
disqualified. The decision of the Civil Service Board of Appeals as to
whether or not the said employee shall be retired under this
sub-section shall be final and conclusive.
"(c) Retirement shall be automatic and compulsory at
the age of sixty-five years, if he has completed fifteen years of
service, and if he has not, he shall be allowed to continue in the
service until he shall have completed fifteen years unless he is
otherwise eligible for disability retirement. This clause shall not
apply to members of the judiciary and constitutional officers whose
tenure of office is guaranteed. Upon specific approval of the President
of the Philippines, an employee may be allowed to continue to serve
after the age of sixty-five years if he possesses special
qualifications and his services are needed. It shall be the duty of the
employer concerned to notify each such employee under its direction of
the date of his automatic separation from the service at least sixty
days in advance thereof.
"(d) An employee separated from the service who is
receiving an annuity described under section eleven shall not be
eligible again to appointment to any appointive position or employment
under any "employer" unless the appointing authority determines that he
is possessed of special qualifications and his medical examination has
been approved by the System, in which event payment of his annuity
shall be suspended during the period of his new employment: Provided,
however, That nothing in this Act shall be so construed as to affect
the rights of the annuitant's beneficiary if the annuitant has been
receiving or had elected, and was otherwise entitled to, a reduced
annuity under subsection (a) of section eleven: And provided, further,
That upon the termination of his new appointment, the payment of the
annuity which was suspended shall be resumed.
"(e) If an employee who is not receiving the annuity
mentioned in the next preceding subsection be reinstated in the
service, he shall be given full credit for services rendered by him
prior to the approval of this Act for the purpose of determining the
amount of annuity under section eleven hereof to which he may be
entitled: Provided however, That said credit shall not be given if the
employee shall not refund to the System any amount he received
therefrom with interest of three per centum per annum compounded
monthly from the date he received them up to the date of their payment,
or any gratuity or benefit he received under any pension or retirement
plan of an employer unless expressly exempted by law from refunding
said gratuity or pension: Provided, further, That if separated before,
and reinstated after, the approval of this Act, only three-fourths of
said prior services shall be credited to the employee after complying
with the condition stated above.
"Section 13. Computation of service. — The aggregate
period of service which forms the basis for retirement and calculating
the amount of annuity described in section eleven hereof shall be
computed from the date of original employment, whether as a classified
or unclassified employee in the service of an "employer", including
periods of service at different times and under one or more employers,
and also periods of service performed overseas under the authority of
the Republic of the Philippines and periods of honorable service in the
Armed Forces of the Philippines prior to the approval of this Act, and
periods of honorable service in the Philippines under the authority of
the United States Government if rendered prior to July fourth nineteen
hundred and forty-six: Provided, however, That in the case of an
employee who is eligible for and receives retirement pay on account of
military or naval service or on account of disability incurred therein,
the period of service upon which such retirement pay is based shall be
excluded: Provided, also, That periods of service rendered after the
approval of this Act during which premiums are not required shall be
excluded, unless the premiums corresponding to said service be later on
paid to the System with interest: And provided, further, That the
period February twenty-eight nineteen hundred and forty-five and from
January first nineteen hundred and forty-two to any period not
exceeding one year at a time during which an officer or employee had
been thereafter out of the service to the date of his reinstatement or
reappointment before the approval of this Act shall be included for
those who were in the service on December eight, nineteen hundred and
forty-one, except those who were separated prior to Japanese
occupation, in the computation of total service, the annuity mentioned
herein, and payment of premiums therefor."
Sec. 9. Section eleven of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
fourteen and is amended to read as follows:
"Section 14.
Special rights attached to life insurance policy. — Any life insurance
policy issued under the provisions of this Act shall not be assignable,
except to the System, and shall be entitled to participation in the
surplus, as provided in section twenty-five hereof. It shall continue
in force, except as otherwise provided, herein, whether the member is
in or out of the service, so long as he complies with the provisions
and conditions thereof. Such policy and the proceeds thereof shall be
exempted from all taxes, and shall not be considered a gratuity."
Section 10. Section twelve of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
fifteen.
Section 11. Section thirteen of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
sixteen and is amended to read as follows:
"Section 16.
Administration of the System. — The System shall be a non-stock
corporation, with its principal place of business in Manila,
Philippines. It shall be managed by a Board of Trustees to consist of
five members to be appointed by the President of the Philippines with
the consent of the Commission on Appointments. The trustees shall elect
from among themselves a chairman and a vice-chairman. Each trustee
shall hold office for three years or until his successor is duly
qualified, except that of the Board first appointed, one shall hold
office for one year, two for two years, and two for three years. At the
expiration of their respective terms, a successors shall be appointed
for the term of three years from the date of such expiration. All
vacancies, except through the expiration of the terms, shall be filled
for the unexpired term only. The trustees shall be entitled to a per
diem of twenty-five pesos for each day of actual attendance in
session."
Section 12. Section fourteen of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
seventeen and is amended to read as follows:
"Section 17.
General powers of the Board. — The Board shall have the powers
specified in this Act and the usual general corporate powers. Among
others, it shall have the following exclusive powers and authority: (a)
to adopt by-laws, rules and regulations for the administration of the
System and the transaction of its business; (b) to adopt from time to
time a budget of expenditures, including salaries of personnel, and
appropriate therefor the necessary amounts; (c) to set up its
accounting unit and provide the necessary personnel therefor; (d) to
invest its funds directly or indirectly; to discount pensions
guaranteed under this act at such rate of discount it may prescribe;
(e) to establish branches of the System whenever and wherever it may be
expedient or necessary, fix their domiciles and in general prescribe
the other complementary rules of organization which this Act imposes;
(f) to lease, purchase, construct or otherwise acquire real property
and/or buildings and such facilities which may be necessary or
expedient to the effective execution of the purposes of this Act; (g)
to prescribe the forms of life insurance and annuity contracts to be
issued and the benefits thereof including accident benefits; (h) to fix
the premium rates, conditions and terms thereof, taking into
consideration the kind of insurance, age, health, and other factors
affecting the insurability of the employee or member, and to authorize
the issuance thereof when so determined; (i) to construct, establish
and/or operate hospitals and sanatoriums when possible and expedient or
necessary to the employees' welfare; (j) to enter into agreements or
contracts with Government and private hospitals or health institutions
and with medical associations or duly licensed physicians, nurses, or
other competent persons who may be needed in connection with medical
and obstetrical services for members of the System and their
dependents, paying them, and authorizing them to accept, reasonable
necessary compensation therefor, notwithstanding any provision of law
to the contrary; (k) except as otherwise provided in this Act, to
extend, when possible and expedient, directly or through other
agencies, and under such rules, regulations, and conditions it may
prescribe, medical and obstetrical services to other members of the
System and their dependents, and, in general, promote the health of the
members of the System and appropriate necessary sums therefor from the
surplus of the System; (l) having regard to any periodic audit and
valuation of the retirement insurance fund, to make such immediate
readjustments or modifications in any of the rates or periods of
benefits granted under this Act and prescribe rules and conditions
therefor, notwithstanding any provision of this Act to the contrary, as
appear necessary in order to make said fund sufficient or no more than
reasonably sufficient to discharge its liabilities: Provided, That no
person may allege vested rights for reason of these readjustments or
modifications; (m) to have the power of succession; (n) to sue and be
sued; and (o) to exercise such other powers as may be necessary to
carry on the business for which the System has been
created.
Section 13. Section fifteen of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
eighteen and is amended to read as follows:
"Section 18.
Personnel. — The Board shall have the power to appoint a general
manager, or a general manager and actuary, who shall be a person of
recognized experience and capacity in the subject of life and social
insurance, and who shall be the chief executive officer of the System,
one or more assistant general managers, one or more managers, a medical
director, and an actuary, and fix their compensation. The general
manager shall, subject to the approval of the Board, appoint additional
personnel whenever and wherever they may be necessary to the effective
execution of the provisions of this Act and fix their compensation. He
shall have the power to prescribe their duties, grant leave, prescribe
certain qualifications to the end that only competent persons may be
employed, and appoint committees: Provided, however, That said
additional personnel shall be selected from civil service eligibles
certified by the Commissioner of Civil Service and shall be subject to
civil service rules and regulations except as herein otherwise
provided.
"The Auditor General shall appoint a representative who shall be the
auditor of the corporation, and the necessary personnel to assist said
representative in the performance of his duties. The number and
salaries of the auditor and said personnel shall be determined by the
Auditor General, subject to appropriation by the Board of Directors; in
case of disagreement, the matter should 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."
Section 14. Section sixteen of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
nineteen and is amended to read as follows:
"Section 19.
Records and reports. — The Board shall cause to be kept records as may
be required for the purpose of making actuarial valuations of the
System including such data necessary in the computation of rates of
disability, mortality, and withdrawal among the members and any other
information that may be useful for the adjustment of the benefits for
the members of the System. Separate and distinct records of operation
of each fund of the System and of disbursements for the same and all
accounts of payments made out of each fund shall, likewise, be made and
kept by the System.
"Within four months after the end of each fiscal year, the Board shall
submit to the President of the Philippines who shall furnish a copy
thereof to the Congress of the Philippines, a report of operations of
the preceding year under the provisions of this Act."
Section 15. Section seventeen of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
twenty.
Section 16. Section eighteen of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
twenty-one.
Section 17. Section nineteen of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
twenty-two.
Section 18. Section twenty of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
twenty-three.
Section 19. Section twenty-one of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
twenty-four and is amended to read as follows:
"Sec. 24.
Accounts to be maintained. — The System shall keep separate and
distinct from one another the following funds:
"(a) Life insurance fund. — This shall consist of all
premiums for life insurance benefit and/or earnings and savings
therefrom. It shall meet death claims as they may arise or such
equities as any member may be entitled to, under the conditions of his
policy, and shall maintain the required reserves to the end of
guaranteeing the fulfillment of the life insurance contracts issued by
the System. Said reserves shall be computed yearly in accordance with
approved valuation standards and with an interest rate of not higher
than four per centum per annum.
"(b) Retirement insurance fund. — This shall consist
of all contributions for retirement insurance benefit and of earnings
and savings therefrom. It shall meet annuity payments and establish the
required reserves to the end of guaranteeing the fulfillment of the
contracts issued by the System. Said reserves shall be determined
yearly on such annuity tables, with an interest rate of not higher than
three per centum per annum, as shall be adopted by the Board.
"(c) Contingency reserve fund. — This shall consist
of such portion of the surplus of each fund mentioned above as may be
set aside each year by the Board pursuant to section twenty-five
hereof: Provided, That it shall not exceed ten per centum of the
required reserves of the System.
"(d) General fund. — This shall consist of such
amounts as may be set aside by the Board from each fund, to meet the
expenses incidental to the enforcement of the provisions of this Act.
"The Government of the Republic of the Philippines hereby guarantees
the fulfillment of the obligations of the Government Service Insurance
System to the members thereof when and as they shall become due."
Sec. 20. Section twenty-two of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
twenty-five and is amended to read as follows:
"Sec. 25.
Disposable surplus. — Any disposable surplus that may result from the
operations of the life insurance fund shall be apportioned among the
members whose policies are in force for at least one year, when and if
the Board deems it expedient, in accordance with the schedule prepared
by the Actuary and approved by the Board. The disposable surplus shall
be that amount left after the mean reserves of the policies,
contingency reserves, the expenses incidental to the operation of said
fund, the expenses incurred in promoting the health of the members, and
other liabilities of the fund have been determined and set aside or
satisfied."
Sec. 21. Section twenty-three of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
twenty-six and is amended to read as follows:
"Sec. 26.
Exemptions from legal process and liens. — No policy of life insurance
issued under this Act, or the proceeds thereof, when paid to any member
thereunder, nor any other benefit granted under this Act, shall be
liable to attachment, garnishment, or other process, or to be seized,
taken, appropriated, or applied by any legal or equitable process or
operation of law to pay any debt or liability of such member, or his
beneficiary, or any other person who may have a right thereunder,
either before or after payment; nor shall the proceeds thereof, when
not made payable to a named beneficiary, constitute a part of the
estate of the member for payment of his debt: Provided, however, that
this section shall not apply when obligations or indebtedness to the
employer are concerned."
Sec. 22. Section twenty-four of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
twenty-seven and is amended to read as follows:
"Sec. 27.
Appropriations. — There is hereby appropriated for the current fiscal
year, and annually thereafter, out of any fund in the Philippines
Treasury or other depository not otherwise appropriated, including
special and corporate funds, such sums as may be necessary to pay the
contributions or premiums payable by each employer under this Act."
Sec. 23. Section twenty-five of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
twenty-eight and is amended to read as follows:
"Sec. 28.
Miscellaneous provisions. — (a) Act Numbered Two thousand five hundred
and eighty-nine, as amended, and all other retirement or pension plans
heretofore in force in any chartered city or corporation owned or
controlled by the Government are hereby declared inoperative or
abolished, and Act Numbered Four thousand one hundred and eighty-three
shall cease to be applicable to employees of any local government that
may be admitted to the System, and hereafter no insurance or retirement
plan for employees shall be created by any employer without the prior
approval of the System: Provided, That the rights of those already
retired shall not be affected: Provided, further, That as of the date
of approval of this Act the present value of the benefit as may be
computed by the actuary of the System or the gratuity payable to any
member who has established his right before the approval of this Act to
retire under either Act Numbered Four thousand one hundred and
eighty-nine or Act Numbered Four thousand one hundred and eighty-three
or under any retirement or pension plan mentioned above shall be
credited and paid by the employer concerned to the retirement insurance
fund of the System in installments to be determined by the System and
approved by the President and shall be included in the computation of
the additional premiums or amounts required in section seven hereof for
the service annuity described in subsection (a) of section eleven
hereof: And provided, finally, That such a member shall be entitled to
the retirement benefit described in this Act only if he so notifies the
System within six months from the approval of this Act, otherwise it
shall be deemed that he does not desire to be retired under this Act
and accordingly the gratuity or benefit payable to him under either
aforementioned Act shall be exclusively reserved for him by the System.
If such member elects the retirement benefit of this Act, but his
position is abolished or he dies or becomes disable before becoming
eligible to said benefit, his legal heirs may be paid the retirement
benefit to which he has established his right prior to the approval of
this Act and his contributions under this Act shall be refunded as
provided in section 11 (d) hereof.
"(b) Except as herein otherwise provided, the
Government Service Insurance System including all its forms or
documents required of its members, shall be exempt from all types of
taxes, documentary stamps, duties and contributions, fiscal or
municipal, direct or indirect, established or to be established; and
more specially, it shall not be subject to the provisions of Act
Numbered Twenty-four hundred and twenty-seven, as amended, and
Commonwealth Act Numbered Four hundred and sixty-six, as amended, and
no law hereafter enacted shall apply to said System unless it is
provided therein that the same is applicable to the System by expressly
stating the name of said entity.
"(c) Any
provision of law inconsistent with the provisions of this Act is hereby
repealed."
Sec. 24. Section twenty-nine to read as follows is
hereby added to Commonwealth Act Numbered One hundred and eighty-six:
"Sec. 29.
Penalty. — Any person found to have participated, directly or
indirectly, in the commission of fraud, collusion, falsification,
misrepresentation of facts, or any other kind of anomaly in the
issuance of any certificate or document for any purpose connected with
this Act, or in obtaining any benefit or payment under this Act,
whether for him or some other person, shall be punished by a fine not
exceeding one thousand pesos or imprisonment not exceeding one year, or
by both such fine and imprisonment at the discretion of the court,
besides disqualification from holding public office and from practicing
any profession or calling licensed by the Government."
Sec. 25. Section twenty-six of Commonwealth Act
Numbered One hundred and eighty-six is hereby changed to section
thirty.
Sec. 26. Notwithstanding the provisions of this
Act to the contrary, any officer or employee who died in the service
within three years before said Act went into effect and who had
rendered at least thirty-five years of service and who was entitled to
or who could have established his right to the retirement gratuity
provided for in Act Numbered Twenty-five hundred and eighty-nine, as
amended, or to any other retirement benefits from any pension fund
created by law shall be considered retired under the provisions of this
Act if his wife, or in her default, his other legal heirs shall so
elect and notify the System to that effect. Upon making such election,
the wife or legal heirs of the deceased officer or employee shall be
paid the monthly annuity for five consecutive years or such other
benefit as provided in said Act, in lieu of the retirement gratuity or
retirement benefits to which the deceased was entitled at the time of
his death; and any portion of such gratuity or retirement benefits
already paid to his wife or other legal heirs shall be refunded to the
System: Provided, That contributions corresponding to his last five
years of service shall be deducted monthly from his life annuity.
Notwithstanding any provisions of this Act to the contrary, any officer
or employee whose position was abolished or who was separated from the
service as a consequence of the reorganization provided for in the
Republic Act Numbered Four hundred and twenty-two may be retired under
the provisions of this Act if qualified: Provided, That any gratuity or
retirement benefit already received by him shall be refunded to the
System: Provided, further, That, contributions corresponding to his
last five years of service shall be paid as provided in section twelve
of this Act. This provision shall also apply to any member of the
judiciary who, prior to the approval of this Act, was separated from
the service after reaching seventy years of age and rendering at least
thirty years of service and who is not entitled to retirement benefit
under any law.
Notwithstanding any provisions of this Act to the contrary, any officer
or employee, who has not established his right to retire under Act
Numbered Twenty-five hundred and eighty-nine or under Act Numbered
Forty-one hundred and eighty-three, both as amended, but who has
rendered not less than twenty-five years of service and has attained
the age of fifty-seven years may elect to retire under either of said
Acts if he shall establish such right within one year from the date of
the approval of this Act, or under this Act if otherwise qualified.
Sec. 27. This Act shall take effect upon its
approval: Provided, That if the financial condition of an employer does
not permit payment of its contributions for retirement insurance herein
required, such payment may be deferred under such conditions as the
System may prescribe.
Approved:
June 16, 1951.
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