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[A.M. No. 99-8-05-SC.February 29, 2000]

RE: EXCLUSION OF PERA & ADCOM, et al.

EN BANC

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated FEB 29 2000 .

A.M. No. 99-8-05-SC(Re: Exclusion of PERA and ADCOM from the Computation of Retirement Gratuity and Terminal leave Benefits of Justices and Judges.)

On July 5, 1999, Mrs. Antonina A. Soria, OIC-Financial Management Office, Office of the Court Administrator, addressed a memorandum to Chief Justice Hilario G. Davide, Jr., seeking clarification as to whether or not the additional compensation (ADCOM) of P500.00 granted to all government officials and employees under Section 49, Republic Act No. 8745, ¹ General Appropriations Act for CY 1999.may be included in the computation of terminal leave and retirement gratuity benefits of judges upon their retirement.

����������� On July 14, 1999, Chief Justice Davide referred the matter to Court Administrator Alfredo L. Benipayo for recommendation.

On August 5, 1999, Justice Benipayo addressed a memorandum for Chief Justice Davide recommending that the ADCOM of P500.00, as well as the Personnel Emergency Relief Allowance (PERA) of P500.00, be excluded from the computation of retirement gratuity and terminal leave benefits of justices and judges.In the case of justices and judges, Republic Act No. 910, ² Effective June 20, 1953.as amended by Republic Act 5095 ³ Effective June 17, 1967.and Presidential Decree No. 1438, ⁴ Effective June 10, 1978.provides that the basis in computing the retirement gratuity is the highest monthly salary plus the highest monthly aggregate transportation, living and representation allowance.He stressed, however, that the computation should not include benefits not yet in existence, such as PERA ⁵ Republic Act 8250 (GAA for CY 1997) granted an additional P500.00 a month known as Personnel Emergency Relief Allowance (PERA) to government personnel and officials.and ADCOM, ⁶ Republic Act 8745 (GAA for CY 1999) granted a monthly additional compensation (ADCOM) of P500.00 to all government employees.when the law was enacted.Justice Benipayo contended that there is no law or decision of the Supreme Court which allows the inclusion of PERA and other allowances in the computation of retirement gratuity and terminal leave of justices and judges.However, it has been the prevailing practice of the Court to include PERA in the computation of retirement gratuity and terminal leave benefits of retiring justices and judges because PERA is embraced within the "living" allowance mentioned in the cited laws.

On November 22, 1999, the Court referred the matter to Atty. Adelaida C. Baumann, Chief, Office of the Administrative Services, for comment and recommendation.

On December 28, 1999, Atty. Baumann submitted a memorandum to Chief Justice Davide recommending that the ADCOM be included in the computation of retirement pay and terminal leave of justices and judges.

We agree with Atty. Baumann.Both PERA and ADCOM must be eluded in the computation of retirement benefits of justices and judges.

In Borromeo v. Civil Service Commission, ⁷ 199 SCRA 911 (1991).we ruled that COLA (Cost of Living Allowance) and RATA (representation and transportation allowance) were included in computing the terminal leave pay and retirement pay of qualified members of the Judiciary and Constitutional Commissions.It must be noted that later, Republic Act 6758, known as the Compensation and Position Classification Act of 1989, mandated the addition or integration of COLA to the basic salary of government employees.Hence, COLA was automatically included in the computation of retirement benefits.

Republic Act 8250 (GAA for CY 1997) granted PERA to all government employees and officials as, a replacement of the COLA. Effective January 1, 1999, ADCOM was granted pursuant to RA 8745.Both PERA and ADCOM are financial benefits given to augment the take-home pay of government employees in view of the increasing cost of living.Both financial benefits are part of compensation embraced in the term "living" allowance provided under Republic Act No. 910, as amended.In the Borromeo case, we included COLA in the computation of retirement benefits because COLA was part of the basic salary, thereby recognizing that COLA must be part of the retirement package.Both PERA and ADCOM are part of the compensation of government employees, including members of the judiciary. "Retirement benefits are liberally construed and administered in favor of the persons intended to be benefited.All doubts as to the intent of the law should be resolved in favor of the retiree to achieve its humanitarian purpose." ⁸ Borromeo v. Civil Service Commission, supra .

WHEREFORE , we rule that both PERA and ADCOM must be included in the computation of retirement benefits and terminal leave pay of justices and judges.

Very truly yours,

LUZVIMINDA D. PUNO

Clerk of Court

(Sgd.) MA. LUISA D. VILLARAMA

Asst. Clerk of Court

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