Republic of the Philippines appointive members shall be three (3) years: Provided, That the terms of
Congress of the Philippines the first six (6) appointive members shall be one (1), two (2) and three (3)
Metro Manila
Tenth Congress
Republic Act No. 8282 May 01, 1997
AN ACT FURTHER STRENGTHENING THE SOCIAL SECURITY
SYSTEM THEREBY AMENDING FOR THIS PURPOSE, REPUBLIC ACT
NO. 1161, AS AMENDED, OTHERWISE KNOWN AS THE SOCIAL
SECURITY LAW
Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled::
Section 1. Republic Act No. 1161, as amended, otherwise known as the "Social
Security Law", is herebyfurther amended to read as follows:
"SECTION 1. Short Title. - This Act shall be known as the "AN
ACT FURTHER STRENGTHENING THE SOCIAL SECURITY
SYSTEM THEREBY AMENDING FOR THIS PURPOSE,
REPUBLIC ACT NO. 1161, AS AMENDED, OTHERWISE KNOWN
AS THE SOCIAL SECURITY LAW."
"SEC. 2. Declaration of Policy. - It is the policy of the Republic of the
Philippines to establish, develop, promote and perfect a sound and viable
tax-exempt social security service suitable to the needs of the people
throughout the Philippines which shall promote social justice and provide
meaningful protection to members and their beneficiaries against the
hazards of disability, sickness, maternity, old age, death, and other
contingencies resulting in loss of income or financial burden. Towards
this end, the State shall endeavor to extend social security protection to
workers and their beneficiaries.
"SEC. 3. Social Security System. - (a) To carry out the purposes of this
Act, the Social Security System, hereinafter referred to as 'SSS', a
corporate body, with principal place of business in Metro Manila,
Philippines is hereby created. The SSS shall be directed and controlled by
a Social Security Commission, hereinafter referred to as 'Commission',
composed of the Secretary of Labor and Employment or his duly
designated undersecretary, the SSS president and seven (7) appointive
members, three (3) of whom shall represent the workers' group, at least
one of whom shall be a woman; three (3), the employers' group, at least
one (1) of whom shall be a woman; and one (1), the general public whose
representative shall have adequate knowledge and experience regarding
social security, to be appointed by the President of the Philippines. The
six (6) members representing workers and employers shall be chosen
from among the nominees of workers' and employers' organizations,
respectively. The Chairman of the Commission shall be designated by the
President of the Philippines from among its members. The term of the
1
years for every two members, respectively: Provided, further, That they
shall continue to hold office until their successors shall have been
appointed and duly qualified. All vacancies, prior to the expiration of the
term, shall be filled for the unexpired term only. The appointive members
of the Commission shall receive at least two thousand five hundred pesos
(P2,500.00) per diem for each meeting actually attended by them but not
to exceed Ten thousand pesos (P10,000.00) a month::Provided, That
members of the Commission shall also receive a per diem of at least Two
thousand five hundred pesos (P2,500.00) but not to exceed Fifteen
thousand pesos (P15,000.00) a month: Provided ,further, That said
members of the Commission shall also receive reasonable transportation
and representation allowances as may be fixed by the Commission, but
not to exceed Ten thousand pesos (P10,000.00) a month.
"(b) The general conduct of the operations and management functions of
the SSS shall be vested in the SSS President who shall serve as the chief
executive officer immediately responsible for carrying out the program of
the SSS and the policies of the Commission. The SSS President shall be a
person who has had previous experience in the technical and
administrative fields related to the purposes of this Act. He shall be
appointed by the President of the Philippines and shall receive salary to
be fixed by the Commission with the approval of the President of the
Philippines, payable from the funds of the SSS.
"(c) The Commission, upon the recommendation of the SSS President,
shall appoint an actuary, and such other personnel as may be deemed
necessary, fix their reasonable compensation, allowances and other
benefits, prescribe their duties and establish such methods and
procedures as may be necessary to insure the efficient, honest and
economical administration of the provisions and purposes of this
Act:Provided, however, That the personnel of the SSS below the rank of
Vice-President shall be appointed by the SSS
President: Provided, further, That the personnel appointed by the SSS
President, except those below the rank of assistant manager, shall be
subject to the confirmation by the Commission: Provided,further, That
the personnel of the SSS shall be selected only from civil service eligibles
and be subject to civil service rules and regulations: Provided, finally,
That the SSS shall be exempt from the provisions ofRepublic Act No.
6758 and Republic Act No. 7430.
"SEC. 4. Powers and Duties of the Commission and SSS. - (a) The
Commission. - For the attainment of its main objectives as set forth in
Section 2 hereof, the Commission shall have the following powers and
duties:
 "(1) To adopt, amend and rescind, subject to the approval of the may be necessary, to undertake the necessary actuarial studies
President of the Philippines, such rules and regulations as may and calculations concerning increases in benefits taking into
be necessary to carry out the provisions and purposes of this Act; account inflation and the financial stability of the SSS, and to
provide for feasible increases in benefits every four (4) years,
"(2) To establish a provident fund for the members which will
including the addition of new ones, under such rules and
consist of voluntary contributions of employers and/or employees,
regulations as the Commission may adopt, subject to the
self-employed and voluntary members and their earnings, for the
approval of the President of the Philippines: Provided, That the
payment of benefits to such members or their beneficiaries,
actuarial soundness of the reserve fund shall be
subject to such rules and regulations as it may promulgate and
guaranteed: Provided, further, That such increases in benefits
approved by the President of the Philippines;
shall not require any increase in the rate of contribution;
"(3) To maintain a provident fund which consists of contributions
"(3) To establish offices of the SSS to cover as many provinces,
made by both the SSS and its officials and employees and their
cities and congressional districts, whenever and wherever it may
earnings, for the payment of benefits to such officials and
be expedient, necessary and feasible, and to inspect or cause to
employees or their heirs under such terms and conditions as it
be inspected periodically such offices;
may prescribe;
"(4) To enter into agreements or contracts for such service and
"(4) To approve restructuring proposals for the payment of due
aid, as may be needed for the proper, efficient and stable
but unremitted contributions and unpaid loan amortizations
administration of the SSS;
under such terms and conditions as it may prescribe;
"(5) To adopt, from time to time, a budget of expenditures
"(5) To authorize cooperatives registered with the cooperative
including salaries of personnel, against all funds available to the
development authority or associations registered with the
SSS under this Act;
appropriate government agency to act as collecting agents of the
SSS with respect to their members: Provided, That the SSS shall "(6) To set up its accounting system and provide the necessary
accredit the cooperative or association:Provided, further, That personnel therefor;
the persons authorized to collect are bonded;
"(7) To require reports, compilations and analyses of statistical
"(6) To compromise or release, in whole or in part, any interest, and economic data and to make investigation as may be needed
penalty or any civil liability to SSS in connection with the for the proper administration and development of the SSS;
investments authorized under Section 26 hereof, under such
"(8) To acquire and dispose of property, real or personal, which
terms and conditions as it may prescribe and approved by the
may be necessary or expedient for the attainment of the purposes
President of the Philippines; and
of this Act;
"(7) To approve, confirm, pass upon or review any and all actions
"(9) To acquire, receive, or hold, by way of purchase,
of the SSS in the proper and necessary exercise of its powers and
expropriation or otherwise, public or private property for the
duties hereinafter enumerated.
purpose of undertaking housing projects preferably for the
"(b) The Social Security System. - Subject to the provision of Section four benefit of low-income members and for the maintenance of
(4), paragraph seven (7) hereof, the SSS shall have the following powers hospitals and institutions for the sick, aged and disabled, as well
and duties: as schools for the members and their immediate families;
"(1) To submit annually not later than April 30, a public report to "(10) To sue and be sued in court; and
the President of the Philippines and to the Congress of the
"(11) To perform such other corporate acts as it may deem
Philippines covering its activities in the administration and
appropriate for the proper enforcement of this Act.
enforcement of this Act during the preceding year including
information and recommendations on broad policies for the "SEC. 5. Settlement of Disputes. - (a) Any dispute arising under this Act
development and perfection of the program of the SSS; with respect to coverage, benefits, contributions and penalties thereon or
any other matter related thereto, shall be cognizable by the Commission,
"(2) To require the actuary to submit a valuation report on the
and any case filed with respect thereto shall be heard by the Commission,
SSS benefit program every four (4) years, or more frequently as
or any of its members, or by hearing officers duly authorized by the
2
Commission and decided within twenty (20) days after the submission of
the evidence. The filing, determination and settlement of disputes shall
be governed by the rules and regulations promulgated by the
Commission.
"(b) Appeal to Courts. - Any decision of the Commission, in the absence of
an appeal therefrom as hereinProvided, shall become final and executory
fifteen (15) days after the date of notification, and judicial review thereof
shall be permitted only after any party claiming to be aggrieved thereby
has exhausted his remedies before the Commission. The Commission
shall be deemed to be a party to any judicial action involving any such
decision, and may be represented by an attorney employed by the
Commission, or when requested by the Commission, by the Solicitor
General or any public prosecutors.
"(c) Court Review. - The decision of the Commission upon any disputed
matter may be reviewed both upon the law and the facts by the Court of
Appeals. For the purpose of such review, the procedure concerning
appeals from the Regional Trial Court shall be followed as far as
practicable and consistent with the purposes of this Act. Appeal from a
decision of the Commission must be taken within fifteen (15) days from
notification of such decision. If the decision of the Commission involves
only questions of law, the same shall be reviewed by the Supreme Court.
No appeal bond shall be required. The case shall be heard in a summary
manner, and shall take precedence over all cases, except that in the
Supreme Court, criminal cases wherein life imprisonment or death has
been imposed by the trial court shall take precedence. No appeal shall act
as a supersedeas or a stay of the order of the Commission unless the
Commission itself, or the Court of Appeals or the Supreme Court, shall so
order.
"(d) Execution of Decisions. - The Commission may, motu proprio or on
motion of any interested party, issue a writ of execution to enforce any of
its decisions or awards, after it has become final and executory, in the
same manner as the decision of the Regional Trial Court by directing the
city or provincial sheriff or the sheriff whom it may appoint to enforce
such final decision or execute such writ; and any person who shall fail or
refuse to comply with such decision, award or writ, after being required
to do so shall, upon application by the Commission pursuant to Rule 71 of
the Rules of Court, be punished for contempt.
"SEC. 6. Auditor and Counsel. - (a) The Chairman of the Commission on
Audit shall be the ex-officio Auditor of the SSS. He or his representative
shall check and audit all the accounts, funds and properties of the SSS in
the same manner and as frequently as the accounts, funds and properties
of the government are checked and audited under existing laws, and he
shall have, as far as practicable, the same powers and duties as he has
with respect to the checking and auditing of public accounts, funds and
properties in general.
3
"(b) The Secretary of Justice shall be the ex-officio counsel of the SSS. He
or his representative shall act as legal adviser and counsel thereof.
"SEC. 7. Oaths, Witnesses, and Production of Records. - When authorized
by the Commission, an official or employee thereof shall have the power
to administer oath and affirmation, take depositions, certify to official
acts, and issue subpoena and subpoena duces tecum to compel the
attendance of witnesses and the production of books, papers,
correspondence and other records deemed necessary as evidence in
connection with any question arising under this Act. Any case of
contumacy shall be dealt with by the Commission in accordance with law.
"SEC. 8. Terms Defined. - For purposes of this Act, the following terms
shall, unless the context indicates otherwise, have the following
meanings:
"(a) SSS - The Social Security System created by this Act.
"(b) Commission - The Social Security Commission as herein created.
"(c) Employer- Any person, natural or juridical, domestic or foreign, who
carries on in the Philippines any trade, business, industry, undertaking,
or activity of any kind and uses the services of another person who is
under his orders as regards the employment, except the Government and
any of its political subdivisions, branches or instrumentalities, including
corporations owned or controlled by the Government:Provided, That a
self-employed person shall be both employee and employer at the same
time.
"(d) Employee - Any person who performs services for an employer in
which either or both mental or physical efforts are used and who receives
compensation for such services, where there is an employer-employee
relationship: Provided, That a self-employed person shall be both
employee and employer at the same time.
"(e) Dependents - The dependents shall be the following:
"(1) The legal spouse entitled by law to receive support from the
member;
"(2) The legitimate, legitimated or legally adopted, and
illegitimate child who is unmarried, not gainfully employed, and
has not reached twenty-one (21) years of age, or if over twenty-
one (21) years of age, he is congenitally or while still a minor has
been permanently incapacitated and incapable of self-support,
physically or mentally; and
"(3) The parent who is receiving regular support from the
member.
"(f) Compensation - All actual remuneration for employment, including
the mandated cost-of-living allowance, as well as the cash value of any
remuneration paid in any medium other than cash except that part of the
remuneration in excess of the maximum salary credit as Provided under
Section Eighteen of this Act.
"(g) Monthly salary credit - The compensation base for contributions and
benefits as indicated in the schedule in Section Eighteen of this Act.
"(h) Monthly - The period from one end of the last payroll period of the
preceding month to the end of the last payroll period of the current
month if compensation is on hourly, daily or weekly basis; if on any other
basis, 'monthly' shall mean a period of one (1) month.
"(i) Contribution - The amount paid to the SSS by and on behalf of the
members in accordance with Section Eighteen of this Act.
"(j) Employment - Any service performed by an employee for his employer
except:
"(1) Employment purely casual and not for the purpose of
occupation or business of the employer;
"(2) Service performed on or in connection with an alien vessel by
an employee if he is employed when such vessel is outside the
Philippines;
"(3) Service performed in the employ of the Philippine
Government or instrumentality or agency thereof;
"(4) Service performed in the employ of a foreign government or
international organization, or their wholly-owned
instrumentality: Provided, however, That this exemption
notwithstanding, any foreign government, international
organization or their wholly-owned instrumentality employing
workers in the Philippines or employing Filipinos outside of the
Philippines, may enter into an agreement with the Philippine
Government for the inclusion of such employees in the SSS
except those already covered by their respective civil service
retirement systems: Provided, further, That the terms of such
agreement shall conform with the provisions of this Act on
coverage and amount of payment of contributions and
benefits: Provided, finally, That the provisions of this Act shall
be supplementary to any such agreement; and
"(5) Such other services performed by temporary and other
employees which may be excluded by regulation of the
Commission. Employees of bona fide independent contractors
shall not be deemed employees of the employer engaging the
service of said contractors.
"(k) Beneficiaries - The dependent spouse until he or she remarries, the
dependent legitimate, legitimated or legally adopted, and illegitimate
children, who shall be the primary beneficiaries of the member:Provided,
4
That the dependent illegitimate children shall be entitled to fifty percent
(50%) of the share of the legitimate, legitimated or legally adopted
children: Provided, further, That in the absence of the dependent
legitimate, legitimated children of the member, his/her dependent
illegitimate children shall be entitled to one hundred percent (100%) of
the benefits. In their absence, the dependent parents who shall be the
secondary beneficiaries of the member. In the absence of all the
foregoing, any other person designated by the member as his/her
secondary beneficiary.
"(l) Contingency - The retirement, death, disability, injury or sickness
and maternity of the member.
"(m) Average monthly salary credit - The result obtained by dividing the
sum of the last sixty (60) monthly salary credits immediately preceding
the semester of contingency by sixty (60), or the result obtained by
dividing the sum of all the monthly salary credits paid prior to the
semester of contingency by the number of monthly contributions paid in
the same period, whichever is greater: Provided, That the injury or
sickness which caused the disability shall be deemed as the permanent
disability for the purpose of computing the average monthly salary credit.
"(n) Average daily salary credit- The result obtained by dividing the sum
of the six (6) highest monthly salary credits in the twelve-month period
immediately preceding the semester of contingency by one hundred
eighty (180).
"(o) Semester - A period of two (2) consecutive quarters ending in the
quarter of contingency.
"(p) Quarter - A period of three (3) consecutive calendar months ending
on the last day of March, June, September and December.
"(q) Credited years of service - For a member covered prior to January
nineteen hundred and eighty five (1985) minus the calendar year of
coverage plus the number of calendar years in which six (6) or more
contributions have been paid from January nineteen hundred and eighty
five (1985) up to the calendar year containing the semester prior to the
contingency. For a member covered in or after January nineteen hundred
and eighty five (1985), the number of calendar years in which six (6) or
more contributions have been paid from the year of coverage up to the
calendar year containing the semester prior to the contingency: Provided,
That the Commission may provide for a different number of contributions
in a calendar year for it to be considered as a credited year of service.
"(r) Member - The worker who is covered under Section Nine and Section
Nine-A of this Act.
"(s) Self-employed - Any person whose income is not derived from
employment, as defined under this Act, as well as those workers
enumerated in Section Nine-A hereof.
"(t) Net earnings - Net income before income taxes plus non-cash charges
such as depreciation and depletion appearing in the regular financial
statement of the issuing or assuming institution.
"(u) Fixed charges - Recurring expense such as amortization of debt
discount or rentals for leased properties, including interest on funded and
unfunded debt.
"SEC. 9. Coverage. - (a) Coverage in the SSS shall be compulsory upon all
employees not over sixty (60) years of age and their employers: Provided,
That in the case of domestic helpers, their monthly income shall not be
less than One thousand pesos (P1,000.00) a month: Provided, further,
That any benefit already earned by the employees under private benefit
plans existing at the time of the approval of this Act shall not be
discontinued, reduced or otherwise impaired: Provided, further, That
private plans which are existing and in force at the time of compulsory
coverage shall be integrated with the plan of the SSS in such a way
where the employer's contribution to his private plan is more than that
required of him in this Act, he shall pay to the SSS only the contribution
required of him and he shall continue his contribution to such private
plan less his contribution to the SSS so that the employer's total
contribution to his benefit plan and to the SSS shall be the same as his
contribution to his private benefit plan before the compulsory
coverage: Provided, further, That any changes, adjustments,
modifications, eliminations or improvements in the benefits to be
available under the remaining private plan, which may be necessary to
adopt by reason of the reduced contributions thereto as a result of the
integration, shall be subject to agreements between the employers and
employees concerned: Provided, further, That the private benefit plan
which the employer shall continue for his employees shall remain under
the employer's management and control unless there is an existing
agreement to the contrary: Provided, finally, That nothing in this Act
shall be construed as a limitation on the right of employers and
employees to agree on and adopt benefits which are over and above
those Provided under this Act.
"(b) Spouses who devote full time to managing the household and family
affairs, unless they are also engaged in other vocation or employment
which is subject to mandatory coverage, may be covered by the SSS on a
voluntary basis.
"(c) Filipinos recruited by foreign-based employers for employment
abroad may be covered by the SSS on a voluntary basis.
"SEC. 9-A. Compulsory Coverage of the Self-Employed. - Coverage in the
SSS shall also be compulsory upon such self-employed persons as may be
determined by the Commission under such rules and regulations as it
may prescribe, including but not limited to the following:
"1. All self-employed professionals;
5
"2. Partners and single proprietors of businesses;
"3. Actors and actresses, directors, scriptwriters and news
correspondents who do not fall within the definition of the term
"employee" in Section 8 (d) of this Act;
"4. Professional athletes, coaches, trainers and jockeys; and
"5. Individual farmers and fishermen.
"Unless otherwise specified herein, all provisions of this Act applicable to
covered employees shall also be applicable to the covered self-employed
persons.
"SEC. 10. Effective Date of Coverage. - Compulsory coverage of the
employer shall take effect on the first day of his operation and that of the
employee on the day of his employment: Provided, That the compulsory
coverage of the self-employed person shall take effect upon his
registration with the SSS.
"SEC. 11. Effect of Separation from Employment. - When an employee
under compulsory coverage is separated from employment, his employer's
contribution on his account and his obligation to pay contributions
arising from that employment shall cease at the end of the month of
separation, but said employee shall be credited with all contributions
paid on his behalf and entitled to benefits according to the provisions of
this Act. He may, however, continue to pay the total contributions to
maintain his right to full benefit.
"SEC. 11-A. Effect of Interruption of Business or Professional Income. - If
the self-employed realizes no income in any given month, he shall not be
required to pay contributions for that month. He may, however, be
allowed to continue paying contributions under the same rules and
regulations applicable to a separated employee member: Provided, That
no retroactive payment of contributions shall be allowed other than as
prescribed under Section Twenty-two-A hereof.
"SEC. 12. Monthly Pension. - (a) The monthly pension shall be the
highest of the following amounts:
"(1) The sum of the following:
"(i) Three hundred pesos (P300.00; plus
"(ii) Twenty percent (20%) of the average monthly salary
credit; plus
"(iii) Two percent (2%) of the average monthly salary
credit for each credited year of service in excess of ten
(10) years; or
"(2) Forth percent (40%) of the average monthly salary credit; or
 "(3) One thousand pesos (P1,000.00): Provided, That the monthly or (2) the monthly pension computed at the time when he actually
pension shall in no case be paid for an aggregate amount of less retires.
than sixty (60) months.
"SEC. 13. Death Benefits. - Upon the death of a member who has paid at
"(b) Notwithstanding the preceding paragraph, the minimum pension least thirty-six (36) monthly contributions prior to the semester of death,
shall be One thousand two hundred pesos (P1,200.00) for members with his primary beneficiaries shall be entitled to the monthly
at least ten (10) credited years of service and Two thousand four hundred pension: Provided, That if he has no primary beneficiaries, his secondary
pesos (P2,400.00) for those with twenty (20) credited years of service. beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-
six (36) times the monthly pension. If he has not paid the required thirty-
"SEC. 12-A. Dependents' Pension. - Where monthly pension is payable on
six (36) monthly contributions, his primary or secondary beneficiaries
account of death, permanent total disability or retirement, dependents'
shall be entitled to a lump sum benefit equivalent to the monthly pension
pension equivalent to ten percent (10%) of the monthly pension or Two
times the number of monthly contributions paid to the SSS or twelve (12)
hundred fifty pesos (P250.00), whichever is higher, shall also be paid for
times the monthly pension, whichever is higher.
each dependent child conceived on or before the date of the contingency
but not exceeding five (5), beginning with the youngest and without "SEC. 13-A. Permanent Disability Benefits. - (a) Upon the permanent
substitution: Provided, That where there are legitimate or illegitimate total disability of a member who has paid at least thirty-six (36) monthly
children, the former shall be preferred. contributions prior to the semester of disability, he shall be entitled to
the monthly pension: Provided, That if he has not paid the required
SEC. 12-B. Retirement Benefits. - (a) A member who has paid at least one
thirty-six (36) monthly contributions, he shall be entitled to a lump sum
hundred twenty (120) monthly contributions prior to the semester of
benefit equivalent to the monthly pension times the number of monthly
retirement and who: (1) has reached the age of sixty (60) years and is
contributions paid to the SSS or twelve (12) times the monthly pension,
already separated from employment or has ceased to be self-employed; or
whichever is higher. A member who (1) has received a lump sum benefit;
(2) has reached the age of sixty-five (65) years, shall be entitled for as
and (2) is reemployed or has resumed self-employment not earlier than
long as he lives to the monthly pension: Provided, That he shall have the
one (1) year from the date of his disability shall again be subject to
option to receive his first eighteen (18) monthly pensions in lump sum
compulsory coverage and shall be considered a new member.
discounted at a preferential rate of interest to be determined by the SSS.
"(b) The monthly pension and dependents' pension shall be suspended
"(b) A covered member who is sixty (60) years old at retirement and who
upon the reemployment or resumption of self-employment or the recovery
does not qualify for pension benefits under paragraph (a) above, shall be
of the disabled member from his permanent total disability or his failure
entitled to a lump sum benefit equal to the total contributions paid by
to present himself for examination at least once a year upon notice by the
him and on his behalf: Provided, That he is separated from employment
SSS.
and is not continuing payment of contributions to the SSS on his own.
"(c) Upon the death of the permanent total disability pensioner, his
"(c) The monthly pension shall be suspended upon the reemployment or
primary beneficiaries as of the date of disability shall be entitled to
resumption of self-employment of a retired member who is less than
receive the monthly pension: Provided, That if he has no primary
sixty-five (65) years old. He shall again be subject to Section Eighteen
beneficiaries and he dies within sixty (60) months from the start of his
and his employer to Section Nineteen of this Act.
monthly pension, his secondary beneficiaries shall be entitled to a lump
"(d) Upon the death of the retired member, his primary beneficiaries as of sum benefit equivalent to the total monthly pensions corresponding to
the date of his retirement shall be entitled to receive the monthly the balance of the five-year guaranteed period excluding the dependents'
pension: Provided, That if he has no primary beneficiaries and he dies pension.
within sixty (60) months from the start of his monthly pension, his
"(d) The following disabilities shall be deemed permanent total:
secondary beneficiaries shall be entitled to a lump sum benefit equivalent
to the total monthly pensions corresponding to the balance of the five- "1. Complete loss of sight of both eyes;
year guaranteed period, excluding the dependents' pension.
"2. Loss of two limbs at or above the ankle or wrists;
"(e) The monthly pension of a member who retires after reaching age
"3. Permanent complete paralysis of two limbs;
sixty (60) shall be the higher of either: (1) the monthly pension computed
at the earliest time he could have retired had he been separated from "4. Brain injury resulting to incurable imbecility or insanity; and
employment or ceased to be self-employed plus all adjustments thereto;
"5. Such cases as determined and approved by the SSS.
6
"(e) If the disability is permanent partial, and such disability occurs shall be additive for deteriorating and related permanent partial
before thirty-six (36) monthly contributions have been paid prior to the disabilities to a maximum of one hundred percent (100%), in which case,
semester of disability, the benefit shall be such percentage of the lump the member shall be deemed as permanently totally disabled.
sum benefit described in the preceding paragraph with due regard to the
"(h) In case of permanent partial disability, the monthly pension benefit
degree of disability as the Commission may determine.
shall be given in lump sum if it is payable for less than twelve (12)
"(f) If the disability is permanent total and such disability occurs after months.
thirty-six (36) monthly contributions have been paid prior to the semester
"(i) For the purpose of adjudicating retirement, death and permanent
of disability, the benefit shall be the monthly pension for permanent total
total disability pension benefits, contributions shall be deemed paid for
disability payable not longer than the period designated in the following
the months during which the member received partial disability
schedule:
pension: Provided, That such contributions shall be based on his last
Complete and permanent Number of contribution prior to his disability.
loss of use of Months "(j) Should a member who is on partial disability pension retire or die, his
disability pension shall cease upon his retirement or death.
One thumb 10
"SEC. 13-B. Funeral Benefit. - A funeral grant equivalent to Twelve
One index finger 8 thousand pesos (P12,000.00) shall be paid, in cash or in kind, to help
defray the cost of funeral expenses upon the death of a member,
One middle finger 6 including permanently totally disabled member or retiree.

One right finger 5 "SEC. 14. Sickness Benefit. - (a) A member who has paid at least three (3)
monthly contributions in the twelve-month period immediately preceding
One little finger 3 the semester of sickness or injury and is confined therefor for more than
three (3) days in a hospital or elsewhere with the approval of the SSS,
One big toe 6 shall, for each day of compensable confinement or a fraction thereof, be
paid by his employer, or the SSS, if such person is unemployed or self-
One hand 39 employed, a daily sickness benefit equivalent to ninety percent (90%) of
his average daily salary credit, subject to the following conditions:
One arm 50
"(1) In no case shall the daily sickness benefit be paid longer than one
One foot 31 hundred twenty (120) days in one (1) calendar year, nor shall any unused
portion of the one hundred twenty (120) days of sickness benefit granted
One leg 46 under this section be carried forward and added to the total number of
compensable days allowable in the subsequent year;
One ear 10 "(2) The daily sickness benefit shall not be paid for more than two
hundred forty (240) days on account of the same confinement; and
Both ears 20
"(3) The employee member shall notify his employer of the fact of his
Hearing of one ear 10 sickness or injury within five (5) calendar days after the start of his
confinement unless such confinement is in a hospital or the employee
Hearing of both ears 50 became sick or was injured while working or within the premises of the
employer in which case, notification to the employer is
Sight of one eye 25 necessary: Provided, That if the member is unemployed or self-employed,
he shall directly notify the SSS of his confinement within five (5)
"(g) The percentage degree of disability which is equivalent to the ratio
calendar days after the start thereof unless such confinement is in a
that the designated number of months of compensability bears to
hospital in which case notification is also not necessary: Provided,further,
seventy-five (75), rounded to the next higher integer, shall not be additive
That in cases where notification is necessary, the confinement shall be
for distinct, separate and unrelated permanent partial disabilities, but

7
deemed to have started not earlier than the fifth day immediately
preceding the date of notification.
"(b) The compensable confinement shall begin on the first day of sickness,
and the payment of such allowances shall be promptly made by the
employer every regular payday or on the fifteenth and last day of each
month, and similarly in the case of direct payment by the SSS, for as long
as such allowances are due and payable: Provided, That such allowance
shall begin only after all sick leaves of absence with full pay to the credit
of the employee member shall have been exhausted.
"(c) One hundred percent (100%) of the daily benefits Provided in the
preceding paragraph shall be reimbursed by the SSS to said employer
upon receipt of satisfactory proof of such payment and legality
thereof: Provided, That the employer has notified the SSS of the
confinement within five (5) calendar days after receipt of the notification
from the employee member: Provided, further, That if the notification to
the SSS is made by the employer beyond five (5) calendar days after
receipt of the notification from the employee member, said employer shall
be reimbursed only for each day of confinement starting from the tenth
calendar day immediately preceding the date of notification to the
SSS: Provided, finally, That the SSS shall reimburse the employer or pay
the unemployed member only for confinement within the one-year period
immediately preceding the date the claim for benefit or reimbursement is
received by the SSS, except confinement in a hospital in which case the
claim for benefit or reimbursement must be filed within one (1) year from
the last day of confinement.
"(d) Where the employee member has given the required notification but
the employer fails to notify the SSS of the confinement or to file the claim
for reimbursement within the period prescribed in this section resulting
in the reduction of the benefit or denial of the claim, such employer shall
have no right to recover the corresponding daily allowance he advanced
to the employee member as required in this section.
"(e)The claim of reimbursement shall be adjudicated by the SSS within a
period of two (2) months from receipt thereof: Provided, That should no
payment be received by the employer within one (1) month after the
period prescribed herein for adjudication, the reimbursement shall
thereafter earn simple interest of one percent (1%) per month until paid.
"(f) The provisions regarding the notification required of the member and
the employer as well as the period within which the claim for benefit or
reimbursement may be filed shall apply to all claims filed with the SSS.
"SEC. 14-A. Maternity Leave Benefit. - A female member who has paid at
least three (3) monthly contributions in the twelve-month period
immediately preceding the semester of her childbirth or miscarriage shall
be paid a daily maternity benefit equivalent to one hundred percent
(100%) of her average daily salary credit for sixty (60) days or seventy-
8
eight (78) days in case of caesarian delivery, subject to the following
conditions:
"(a) That the employee shall have notified her employer of her pregnancy
and the probable date of her childbirth, which notice shall be transmitted
to the SSS in accordance with the rules and regulations it may provide;
"(b) The full payment shall be advanced by the employer within thirty
(30) days from the filing of the maternity leave application;
"(c) That payment of daily maternity benefits shall be a bar to the
recovery of sickness benefits Providedby this Act for the same period for
which daily maternity benefits have been received;
"(d) That the maternity benefits Provided under this section shall be paid
only for the first four (4) deliveries or miscarriages;
"(e) That the SSS shall immediately reimburse the employer of one
hundred percent (100%) of the amount of maternity benefits advanced to
the employee by the employer upon receipt of satisfactory proof of such
payment and legality thereof; and
"(f) That if an employee member should give birth or suffer miscarriage
without the required contributions having been remitted for her by her
employer to the SSS, or without the latter having been previously
notified by the employer of the time of the pregnancy, the employer shall
pay to the SSS damages equivalent to the benefits which said employee
member would otherwise have been entitled to.
"SEC. 15. Non-Transferability of Benefits. - The SSS shall promptly pay
the benefits Provided in this Act to such persons as may be entitled
thereto in accordance with the provisions of this Act: Provided, That the
SSS shall pay the retirement benefits on the day of contingency to
qualified members who have submitted the necessary documents at least
six (6) months before: Provided, further, That the beneficiary who is a
national of a foreign country which does not extend benefits to a Filipino
beneficiary residing in the Philippines, or which is not recognized by the
Philippines, shall not be entitled to receive any benefit under this
Act: Provided, further, That notwithstanding the foregoing, where the
best interest of the SSS will be served, the Commission may direct
payments without regard to nationality or country of
residence:Provided, further, That if the recipient is a minor or a person
incapable of administering his own affairs, the Commission shall appoint
a representative under such terms and conditions as it may deem
proper:Provided, further, That such appointment shall not be necessary
in case the recipient is under the custody of or living with the parents or
spouse of the member in which case the benefits shall be paid to such
parents or spouse, as representative payee of the recipient. Such benefits
are not transferable and no power of attorney or other document executed
by those entitled thereto in favor of any agent, attorney or any other
person for the collection thereof on their behalf shall be recognized, SALARY RANGE OF MONTHLY MONTHLY CONTRIBUTION
except when they are physically unable to collect personally such BRACKET COMPENSATION SALARY
benefits: Provided, further, That in case of death benefits, if no CREDIT EMPLOYER EMPLOYEE TOTAL
beneficiary qualifies under this Act, said benefits shall be paid to the
legal heirs in accordance with the law of succession. I 1,000.00 - 1,249.99 1000 50.70 33.30 84.00
"SEC. 16. Exemption from Tax, Legal Process and Lien. -- All laws to the II 1,250.00 - 1,749.99 1500 76.00 50.00 126.00
contrary notwithstanding, the SSS and all its assets and properties, all
contributions collected and all accruals thereto and income or investment III 1,750.00 - 2,249.99 2000 101.30 66.70 168.00
earnings therefrom as well as all supplies, equipment, papers or
documents shall be exempt from any tax, assessment, fee, charge, or IV 2,250.00 - 2,749.99 2500 126.70 83.30 210.00
customs or import duty; and all benefit payments made by the SSS shall
V 2,750.00 - 3,249.99 3000 152.00 100.00 252.00
likewise be exempt from all kinds of taxes, fees or charges, and shall not
liable to attachments, garnishments, levy or seizure by or under any legal VI 3,250.00 - 3,749.99 3500 177.30 116.70 294.00
or equitable process whatsoever, either before or after receipt by the
person or persons entitled thereto, except to pay any debt of the member VII 3,750.00 - 4,249.99 4000 202.70 133.30 336.00
to the SSS. No tax measure of whatever nature enacted shall apply to the
SSS, unless it expressly revokes the declared policy of the State in VIII 4,250.00 - 4,749.99 4500 228.00 150.00 378.00
Section 2 hereof granting tax-exemption to the SSS. Any tax assessment
imposed against the SSS shall be null and void. (As amended by Sec. IX 4,750.00 - 5,249.99 5000 253.30 166.70 420.00
9, P.D. No. 24, S. 1972; and Sec. 14, P. D. No. 735, S. 1975).
X 5,250.00 - 5,749.99 5500 278.70 183.70 462.40
"SEC. 17. Fee of Agents, Attorneys, Etc. - No agent, attorney or other
person in charge of the preparation, filing or pursuing any claim for XI 5,750.00 - 6,249.99 6000 304.00 200.00 504.00
benefit under this Act shall demand or charge for his services any fee,
XII 6,250.00 - 6,749.99 6500 329.30 216.78 546.00
and any stipulation to the contrary shall be null and void. The retention
or deduction of any amount from any benefit granted under this Act for XIII 6,750.00 - 7,249.99 7000 354.70 233.30 588.00
the payment of fees for such services is prohibited:Provided, however,
That any member of the Philippine Bar who appears as counsel in any XIV 7,250.00 - 7,749.99 7500 380.00 250.00 630.00
case heard by the Commission shall be entitled to attorneys' fees not
exceeding ten percent (10%) of the benefits awarded by the Commission, XV 7,750.00 - 8.249.99 8000 403.30 266.70 672.00
which fees shall not be payable before the actual payment of the benefits,
and any stipulation to the contrary shall be null and void. XVI 8,250.00 - 8,749.99 8500 430.70 283.30 714.00

"Any violation of the provisions of this Section shall be punished by a fine XVII 8,750.00 - OVER 9000 456.00 300.00 756.00
of not less than Five hundred pesos (P500.00) nor more than Five
thousand pesos (P5,000.00), or imprisonment for not less than six (6) "The foregoing schedule of contribution shall also apply to self-employed
months nor more than one (1) year, or both, at the discretion of the court. and voluntary members.

"SEC. 18. Employee's Contributions. - (a) Beginning as of the last day of
the calendar month when an employee's compulsory coverage takes effect
and every month thereafter during his employment, the employer shall
deduct and withhold from such employee's monthly salary, wage,
compensation or earnings, the employee's contribution in an amount
corresponding to his salary, wage, compensation or earnings during the
month in accordance with the following schedule:
"The maximum monthly salary credit shall be Nine thousand pesos
(P9,000.00) effective January Nineteen hundred and ninety six
(1996); Provided, That it shall be increased by One thousand pesos
(P1,000.00) every year thereafter until it shall have reached Twelve
thousand pesos (P12,000.00) by Nineteen hundred and ninety nine
(1999): Provided, further, That the minimum and maximum monthly
salary credits as well as the rate of contributions may be fixed from time
to time by the Commission through rules and regulations taking into
consideration actuarial calculations and rate of benefits, subject to the
approval of the President of the Philippines.

9
"SEC. 19. Employer's Contributions. - (a) Beginning as of the last day of
the month when an employee's compulsory coverage takes effect and
every month thereafter during his employment, his employer shall pay,
with respect to such covered employee, the employer's contribution in
accordance with the schedule indicated in Section Eighteen of this Act.
Notwithstanding any contract to the contrary, an employer shall not
deduct, directly or indirectly, from the compensation of his employees
covered by the SSS or otherwise recover from them the employer's
contributions with respect to such employees.
"(b) The remittance of such contributions by the employer shall be
supported by a quarterly collection list to be submitted to the SSS at the
end of each calendar quarter indicating the correct ID number of the
employer, the correct names and the SSS numbers of the employees and
the total contributions paid for their account during the quarter.
"SEC. 19-A. Contributions of the Self-Employed Member. - The
contributions to the SSS of the self-employed member shall be
determined in accordance with Section Eighteen of this Act: Provided,
That the monthly earnings declared by the self-employed member at the
time of his registration with the SSS shall be considered as his monthly
compensation and he shall pay both the employer and the employee
contributions: Provided, further, That the contributions of self-employed
persons earning One thousand pesos (P1,000.00) monthly or below may
be reduced by the Commission.
"The monthly earnings declared by the self-employed member at the time
of his registration shall remain the basis of his monthly salary credit,
unless he makes another declaration of his monthly earnings, in which
case such latest declaration becomes the new basis of his monthly salary
credit.
"SEC. 20. Government Contribution. - As the contribution of the
Government to the operation of the SSS, Congress shall annually
appropriate out of any funds in the National Treasury not otherwise
appropriated, the necessary sum or sums to meet the estimated expenses
of the SSS for each ensuing year. In addition to this contribution,
Congress shall appropriate from time to time such sum or sums as may
be needed to assure the maintenance of an adequate working balance of
the funds of the SSS as disclosed by suitable periodic actuarial studies to
be made of the operations of the SSS.
"SEC. 21. Government Guarantee. -- The benefits prescribed in this Act
shall not be diminished and to guarantee said benefits the Government of
the Republic of the Philippines accepts general responsibility for the
solvency of the SSS.
"SEC. 22. Remittance of Contributions. -- (a) The contributions imposed
in the preceding Section shall be remitted to the SSS within the first ten
(10) days of each calendar month following the month for which they are
10
applicable or within such time as the Commission may prescribe. Every
employer required to deduct and to remit such contributions shall be
liable for their payment and if any contribution is not paid to the SSS as
herein prescribed, he shall pay besides the contribution a penalty thereon
of three percent (3%) per month from the date the contribution falls due
until paid. If deemed expedient and advisable by the Commission, the
collection and remittance of contributions shall be made quarterly or
semi-annually in advance, the contributions payable by the employees to
be advanced by their respective employers:Provided, That upon
separation of an employee, any contribution so paid in advance but not
due shall be credited or refunded to his employer.
"(b) The contributions payable under this Act in cases where an employer
refuses or neglects to pay the same shall be collected by the SSS in the
same manner as taxes are made collectible under the National Internal
Revenue Code, as amended. Failure or refusal of the employer to pay or
remit the contributions herein prescribed shall not prejudice the right of
the covered employee to the benefits of the coverage.
"The right to institute the necessary action against the employer may be
commenced within twenty (20) years from the time the delinquency is
known or the assessment is made by the SSS, or from the time the
benefit accrues, as the case may be.
"(c) Should any person, natural or juridical, default in any payment of
contributions, the Commission may also collect the same in either of the
following ways:
"1. By an action in court, which shall hear and dispose of the case
in preference to any other civil action; or
"2. By issuing a warrant to the Sheriff of any province or city
commanding him to levy upon and sell any real and personal
property of the debtor. The Sheriff's sale by virtue of said
warrant shall be governed by the same procedure prescribed for
executions against property upon judgments by a court of record.
"(d) The last complete record of monthly contributions paid by the
employer or the average of the monthly contributions paid during the
past three (3) years as of the date of filing of the action for collection shall
be presumed to be the monthly contributions payable by and due from
the employer to the SSS for each of the unpaid month, unless
contradicted and overcome by other evidence: Provided, That the SSS
shall not be barred from determining and collecting the true and correct
contributions due the SSS even after full payment pursuant to this
paragraph, nor shall the employer be relieved of his liability under
Section Twenty-eight of this Act.
"SEC. 22-A. Remittance of Contributions of Self-Employed Member. - Self-
employed members shall remit their monthly contributions quarterly on
such dates and schedules as the Commission may specify through rules
and regulations: Provided, That no retroactive payment of contributions
shall be allowed, except as Provided in this Section.
"SEC. 23. Method of Collection and Payment. - The SSS shall require a
complete and proper collection and payment of contributions and proper
identification of the employer and the employee. Payment may be made
in cash, checks, stamps, coupons, tickets, or other reasonable devices that
the Commission may adopt.
"SEC. 24. Employment Records and Reports. - (a) Each employer shall
immediately report to the SSS the names, ages, civil status, occupations,
salaries and dependents of all his employees who are subject to
compulsory coverage: Provided, That if an employee subject to
compulsory coverage should die or become sick or disabled or reach the
age of sixty (60) without the SSS having previously received any report or
written communication about him from his employer, the said employer
shall pay to the SSS damages equivalent to the benefits to which said
employee member would have been entitled had his name been reported
on time by the employer to the SSS, except that in case of pension
benefits, the employer shall be liable to pay the SSS damages equivalent
to the accumulated pension due as of the date of settlement of the claim
or to the five (5) years' pension, including dependents'
pension: Provided,further, That if the contingency occurs within thirty
(30) days from the date of employment, the employer shall be relieved of
his liability for damages: Provided, further, That any person or entity
engaging the services of an independent contractor shall be subsidiarily
liable with such contractor for any civil liability incurred by the latter
under this Act: Provided, finally, That the same person or entity
engaging the services of an independent contractor shall require such
contractor to post a surety bond to guarantee the payment of the worker's
benefits.
"(b) Should the employer misrepresent the true date of employment of the
employee member or remit to the SSS contributions which are less than
those required in this Act or fail to remit any contribution due prior to
the date of contingency, resulting in a reduction of benefits, the employer
shall pay to the SSS damages equivalent to the difference between the
amount of benefit to which the employee member or his beneficiary is
entitled had the proper contributions been remitted to the SSS and the
amount payable on the basis of contributions actually remitted: Provided,
That if the employee member or his beneficiary is entitled to pension
benefits, damages shall be equivalent to the accumulated pension due as
of the date of settlement of the claim or to the five (5) years' pension,
whichever is higher, including dependents' pension.
"In addition to the liability mentioned in the preceding paragraphs (a)
and (b) hereof, the employer shall also be liable for the corresponding
unremitted contributions and penalties thereon.
11
"(c) The records and reports duly accomplished and submitted to the SSS
by the employer or the member, as the case may be, shall be kept
confidential by the SSS except in compliance with a subpoena duces
tecum issued by the Court, shall not be divulged without the consent of
the SSS President or any official of the SSS duly authorized by him, shall
be presumed correct as to the data and other matters stated therein,
unless the necessary corrections to such records and reports have been
properly made by the parties concerned before the right to the benefit
being claimed accrues, and shall be made the basis for the adjudication of
the claim. If as a result of such adjudication the SSS in good faith pays a
monthly pension to a beneficiary who is inferior in right to another
beneficiary or with whom another beneficiary is entitled to share, such
payments shall discharge the SSS from liability unless and until such
other beneficiary notifies the SSS of his claim prior to the payments.
"(d) Every employer shall keep true and accurate work records for such
period and containing such information as the Commission may
prescribe, in addition to an "Annual Register of New and Separated
Employees" which shall be secured from the SSS wherein the employer
shall enter on the first day of employment or on the effective date of
separation, the names of the persons employed or separated from
employment, their SSS numbers, and such other data that the
Commission may require and said annual register shall be submitted to
the SSS in the month of January of each year. Such records shall be open
for inspection by the SSS or its authorized representatives quarterly or
as often as the SSS may require.
"The SSS may also require each employer to submit, with respect to the
persons in his employ, reports needed for the effective administration of
this Act.
"(e) Each employer shall require, as a condition to employment, the
presentation of a registration number secured by the prospective
employee from the SSS in accordance with such procedure as the SSS
may adopt: Provided, That in case of employees who have been assigned
registration numbers by virtue of a previous employment, such numbers
originally assigned to them should be used for purposes of this
Section: Provided, further, That the issuance of such registration
numbers by the SSS shall not exempt the employer from complying with
the provisions of paragraph (a) of this Section.
"(f) Notwithstanding any law to the contrary, microfilm, or non-erasable
optical disk and other similar archival media copies of original SSS
records and reports, duly certified by the official custodian thereof, shall
have the same evidentiary value as the originals and be admissible as
evidence in all legal proceedings.
"(g) Notwithstanding any law to the contrary, local government units
shall, prior to issuing any annual business license or permit, require
submission of certificate of SSS coverage and compliance with the
provisions of this Act: Provided, That the certification or clearance shall
be issued by the SSS within five (5) working days from receipt of the
request.
"SEC. 24-A. Report and Registration of the Self-Employed Member. - Each
covered self-employed person shall, within thirty (30) days from the first
day he started the practice of his profession or business operations
register and report to the SSS his name, age, civil status, and occupation,
average monthly net income and his dependents.
"SEC. 25. Deposits and Disbursements. - All money paid to or collected by
the SSS every year under this Act, and all accruals thereto shall be
deposited, administered and disbursed in the same manner and under
the same conditions and requirements as Provided by law for other public
special funds: Provided, That not more than twelve percent (12%) of the
total yearly contributions plus three percent (3%) of other revenues shall
be disbursed for operational expenses such as salaries and wages,
supplies and materials, depreciation and the maintenance of offices of the
SSS: Provided, further, That if the expenses in any year are less than the
maximum amount permissible, the difference shall not be availed of as
additional expenses in the following years.
"SEC. 26. Investment of Reserve Funds. - All revenues of the SSS that are
not needed to meet the current administrative and operational expenses
incidental to the carrying out of this Act shall be accumulated in a fund
to be known as the "Reserve Fund." Such portions of the Reserve Fund as
are not needed to meet the current benefit obligations thereof shall be
known as the "Investment Reserve Fund" which the Commission shall
manage and invest with the skill, care, prudence and diligence necessary
under the circumstances then prevailing that a prudent man acting in
like capacity and familiar with such matters would exercise in the
conduct of an enterprise of a like character and with similar aims.
Pursuant thereto, and in line with the basic principles of safety, good
yield and liquidity, the Commission shall invest the funds to earn an
annual income not less than the average rates of treasury bills or any
other acceptable market yield indicator in any or in all of the following:
"(a) In bonds, securities, promissory notes or other evidence of
indebtedness of the Government of the Philippines, or in bonds,
securities, promissory notes or other evidence of indebtedness to which
the full faith, credit and unconditional guarantee of the Government of
the Philippines is pledged;
"(b) In bonds, securities, promissory notes or other evidence of
indebtedness of the Government of the Philippines, or any agencies or
instrumentalities to finance domestic infrastructure projects such as
roads, bridges, ports, telecommunications, and other similar
projects: Provided, That the instruments issued by an agency or
12
instrumentality of the government shall be guaranteed by the
Government of the Philippines or any government financial institution or
acceptable multilateral agency: Provided, further, That the SSS shall
have priority over the revenues of the projects: Provided, finally, That
such investments shall not exceed thirty percent (30%) of the Investment
Reserve Fund;
"(c) In bonds, securities, promissory notes or other evidence of
indebtedness of government financial institutions or government
corporations with acceptable credit or guarantee: Provided, That such
investments shall not exceed thirty percent (30%) of the Investment
Reserve Fund;
"(d) In bonds, securities, promissory notes or other evidence of
indebtedness of any bank doing business in the Philippines and in good
standing with the Bangko Sentral ng Pilipinas to finance loans to private
corporations doing business in the Philippines, including schools,
hospitals, small-and-medium scale industries, cooperatives and non-
governmental organizations, in which case the collaterals or securities
shall be assigned to the SSS under such terms and conditions as the
Commission may prescribe:Provided, That in the case of bank deposits,
they shall not exceed at any time the unimpaired capital and surplus or
total private deposits of the depository bank, whichever is
smaller: Provided, further, That said bank shall first have been
designated as a depository for this purpose by the Monetary Board of the
Bangko Sentral ng Pilipinas: Provided, finally, That such investments
shall not exceed forty percent (40%) of the Investment Reserve Fund;
"(e) In bonds, securities, promissory notes or other evidence of
indebtedness of shelter agencies of the National Government or financial
intermediaries to finance housing loans of members; and in long-term
direct individual or group housing loans giving priority to the low-income
groups, up to a maximum of ninety percent (90%) of the appraised value
of the properties to be mortgaged by the borrowers; and
"In short and medium term loans to members such as salary,
educational, livelihood, marital, calamity and emergency loans: Provided,
That not more than thirty five percent (35%) of the Investment Reserve
Fund at any time shall be invested for housing
purposes: Provided, further, That not more than ten percent (10%) of the
Investment Reserve Fund shall be invested in short and medium term
loans;
"(f) In bonds, securities, promissory notes or other evidence of
indebtedness of educational or medical institutions to finance the
construction, improvement and maintenance of schools and hospitals and
their equipment and facilities: Provided, That such investments shall not
exceed ten percent (10%) of the Investment Reserve Fund;
"(g) In real estate property, including shares of stocks involving real
estate property, and investment secured by first mortgages on real estate
or other collaterals acceptable to the SSS: Provided, That such projects
and investments shall, in the determination of the Commission, redound
to the benefit of the SSS, its members, as well as the general
public: Provided, further, That investment in real estate property,
including shares of stocks involving real estate property shall not exceed
five percent (5%) of the Investment Reserve Fund: Provided, finally, That
investments in other income earning projects and investments secured by
first mortgages or other collaterals shall not exceed twenty five percent
(25%) of the Investment Reserve Fund;
"(h) In bonds, debentures, securities, promissory notes or other evidence
of indebtedness of any prime corporation or multilateral institutions to
finance domestic projects: Provided, That the issuing or assuming entity
or its predecessors shall not have defaulted in the payment of interest on
any of its securities and that during each of any three (3) including the
last two (2) of the five (5) fiscal years next preceding the date of
acquisition by the SSS of such bonds, debentures or other evidence of
indebtedness, the net earnings of the issuing or assuming institution
available for its fixed charges, as defined in this Act, shall have been not
less than one and one-quarter times the total of its fixed charges for such
year: Provided, further, That such investments shall not exceed thirty
percent (30%) of the Investment Reserve Fund;
"(i) In preferred or common shares of stocks listed or about to be listed in
the stock exchange or options or warrants to such stocks or, subject to
prior approval of the Bangko Sentral ng Pilipinas, such other risk
management instruments of any prime or solvent corporation or financial
institution created or existing under the laws of the Philippines with
proven track record of profitability over the last three (3) years and
payment of dividends at least once over the same period: Provided, That
such investments shall not exceed thirty percent (30%) of the Investment
Reserve Fund;
"(j) In domestic or foreign mutual funds in existence for at least three (3)
years; Provided, That such investments shall not exceed twenty percent
(20%) of the Investment Reserve Fund: Provided, further, That
investments in foreign mutual funds shall not exceed one percent (1%) of
the Investment Reserve Fund in the first year which shall be increased
by one percent (1%) for each succeeding year, but in no case shall it
exceed seven and one-half percent (7.5%) of the Investment Reserve
Fund;
"(k) In foreign currency deposits or triple "A" foreign currency
denominated debts, prime and non-speculative equities, and other
Bangko Sentral ng Pilipinas approved financial instruments or other
assets issued in accordance with the existing laws of the countries where
such financial instruments are issued:Provided, That these instruments
13
or assets are listed in bourses of the respective countries where these
instruments or assets are issued: Provided, further, That the issuing
company has proven track of record of profitability over the last three (3)
years and a record of regular dividend pay-out over the same
period:Provided, finally, That such investments shall not exceed one
percent (1%) of the Investment Reserve Fund in the first year which shall
be increased by one percent (1%) for each succeeding year, but in no case
shall it exceed seven and one-half percent (7.5%) of the Investment
Reserve Fund;
"(l) In loans secured by such collaterals like cash, government securities
or guarantees of multilateral institutions: Provided, That such
investments shall not exceed thirty percent (30%) of the Investment
Reserve Fund; and
"(m) In other Bangko Sentral ng Pilipinas approved investment
instruments with the same intrinsic quality as those enumerated in
paragraphs (a) to (l) hereof, subject to the policies and guidelines which
the Commission may formulate.
"No portion of the Investment Reserve Fund or income thereof shall
accrue to the general fund of the National Government or to any of its
agencies or instrumentalities, including government-owned or controlled
corporations, except as may be allowed under this Act: Provided, That no
portion of the Investment Reserve Fund shall be invested for any purpose
or in any instrument, institution or industry over and above the
prescribed cumulative ceilings as follows:
40% in private securities
35% in housing
30% in real estate related investments
10% in short and medium-term member loans
30% in government financial institutions and corporations
30% in infrastructure projects
15% in any particular industry
7.5% in foreign-currency denominated investments
"SEC. 26-A. Fund Managers. - As part of its investment operations, the
SSS may appoint local or, in the absence thereof, foreign fund managers
to manage the Investment Reserve Fund, as it may deem appropriate.
"SEC. 26-B. Mortgagor Insurance Account. - (a) As part of its investment
operations, the SSS shall act as insurer of all or part of its interest on
SSS properties mortgaged to the SSS, or lives of mortgagors whose
properties are mortgaged to the SSS. For this purpose, the SSS shall
establish a separate account to be known as the "Mortgagors' Insurance
Account." All amounts received by the SSS in connection with the
aforesaid insurance operations shall be placed in the Mortgagors'
Insurance Account. The assets and liabilities of the Mortgagors'
Insurance Account shall at all times be clearly identifiable and
distinguishable from the assets and liabilities in all other accounts of the
SSS. Notwithstanding any provision of law to the contrary, the assets
held in the Mortgagors' Insurance Account shall not be chargeable with
the liabilities arising out of any other business the SSS may conduct but
shall be held and applied exclusively for the benefit of the owners or
beneficiaries of the insurance contracts issued by the SSS under this
paragraph.
"(b) The SSS may insure any of its interest or part thereof with any
private company or reinsurer. The Insurance Commission or its
authorized representatives shall make an examination into the financial
condition and methods of transacting business of the SSS at least once in
two (2) years, but such examination shall be limited to the insurance
operation of the SSS as authorized under this paragraph and shall not
embrace the other operations of the SSS; and the report of said
examination shall be submitted to the Commission and a copy thereof
shall be furnished the Office of the President of the Philippines within a
reasonable time after the close of the examination: Provided, That for
each examination, the SSS shall pay to the Insurance Commission an
amount equal to the actual expense of the Insurance Commission in the
conduct of examination, including the salaries of the examiners and of
the actuary of the Insurance Commission who have been assigned to
make such examination for the actual time spent in said
examination: Provided, further, That the general law on insurance and
the rules and regulations promulgated thereunder shall have suppletory
application insofar as it is not in conflict with this Act and its rules and
regulations.
"SEC. 27. Records and Reports. - The SSS President shall keep and cause
to keep records of operations of the funds of the SSS and of
disbursements thereof and all accounts of payments made out of said
funds. During the month of January of each year, the SSS President shall
prepare for submission to the President of the Philippines and to
Congress of the Philippines a report of operations of the SSS during the
preceding year, including statistical data on the number of persons
covered and benefited, their occupations and employment status, the
duration and amount of benefits paid, the finances of the SSS at the close
of the said year, and recommendations. He shall also cause to be
published in two (2) newspapers of general circulation in the Philippines
a synopsis of the annual report, showing in particular the status of the
finances of the SSS and the benefits administered.
"SEC. 28. Penal Clause. - (a) Whoever, for the purpose of causing any
payment to be made under this Act, or under an agreement thereunder,
14
where none is authorized to be paid, shall make or cause to be made false
statement or representation as to any compensation paid or received or
whoever makes or causes to be made any false statement of a material
fact in any claim for any benefit payable under this Act, or application for
loan with the SSS, or whoever makes or causes to be made any false
statement, representation, affidavit or document in connection with such
claim or loan, shall suffer the penaltiesProvided for in Article One
hundred seventy-two of the Revised Penal Code.
"(b) Whoever shall obtain or receive any money or check under this Act or
any agreement thereunder, without being entitled thereto with intent to
defraud any member, employer or the SSS, shall be fined not less than
Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos
(P20,000.00) and imprisoned for not less than six (6) years and one (1)
day nor more than twelve (12) years.
"(c) Whoever buys, sells, offers for sale, uses, transfers or takes or gives
in exchange, or pledges or gives in pledge, except as authorized in this
Act or in regulations made pursuant thereto, any stamp, coupon, ticket,
book or other device, prescribed pursuant to Section Twenty-three hereof
by the Commission for the collection or payment of contributions required
herein, shall be fined not less than Five thousand pesos (P5,000.00) nor
more than Twenty thousand pesos (P20,000.00), or imprisoned for not
less than six (6) years and one (1) day nor more than twelve (12) years, or
both, at the discretion of the court.
"(d) Whoever, with intent to defraud, alters, forges, makes or counterfeits
any stamp, coupon, ticket, book or other device prescribed by the
Commission for the collection or payment of any contribution required
herein, or uses, sells, lends, or has in his possession any such altered,
forged or counterfeited materials, or makes, uses, sells or has in his
possession any such altered, forged, material in imitation of the material
used in the manufacture of such stamp, coupon, ticket, book or other
device, shall be fined not less than Five thousand pesos (P5,000.00) non
more than Twenty thousand pesos (P20,000.00) or imprisoned for not less
than six years (6) and one (1) day nor more than twelve (12) years, or
both, at the discretion of the court.
"(e) Whoever fails or refuses to comply with the provisions of this Act or
with the rules and regulations promulgated by the Commission, shall be
punished by a fine of not less than Five thousand pesos (P5,000.00) nor
more than Twenty thousand pesos (P20,000.00), or imprisonment for not
less than six (6) years and one (1) day nor more than twelve (12) years, or
both, at the discretion of the court: Provided, That where the violation
consists in failure or refusal to register employees or himself, in case of
the covered self-employed or to deduct contributions from the employees'
compensation and remit the same to the SSS, the penalty shall be a fine
of not less Five thousand pesos (P5,000.00) nor more than Twenty
thousand pesos (P20,000.00) and imprisonment for not less than six (6) Section 2. Separability Clause. - If any provision of this Act is declared
years and one (1) day nor more than twelve (12) years. invalid, the other provisions not affected thereby shall remain valid.
"(f) If the act or omission penalized by this Act be committed by an Section 3. Repealing Clause. - All laws, proclamations, executive orders, rules
association, partnership, corporation or any other institution, its and regulations or parts thereof inconsistent with this Act are hereby repealed,
managing head, directors or partners shall be liable for the modified or amended accordingly: Provided, That no person shall be deemed to be
penalties Providedin this Act for the offense. vested with any property or other right by virtue of the enactment or operation of
this Act.
"(g) Any employee of the SSS who receives or keeps funds or property
belonging, payable or deliverable to the SSS and who shall appropriate Section 4. Effectivity Clause. - This Act shall take effect fifteen (15) days after
the same, or shall take or misappropriate, or shall consent, or through its complete publication in the Official Gazette or in at least two (2) national
abandonment or negligence, shall permit any other person to take such newspapers of general circulation whichever comes earlier.
property or funds, wholly or partially, or shall otherwise be guilty of
Approved: May 01, 1997
misappropriation of such funds or property, shall suffer the
penalties Provided in Article Two hundred seventeen of the Revised
Penal Code.
"(h) Any employer who, after deducting the monthly contributions or loan
amortizations from his employee's compensation, fails to remit the said
deduction to the SSS within thirty (30) days from the date they became
due, shall be presumed to have misappropriated such contributions or
loan amortizations and shall suffer the penalties Provided in Article
Three hundred fifteen of the Revised Penal Code.
"(i) Criminal action arising from a violation of the provisions of this Act
may be commenced by the SSS or the employee concerned either under
this Act or in appropriate cases under the Revised Penal Code:Provided,
That such criminal action may be filed by the SSS in the city or
municipality where the SSS office is located, if the violation was
committed within its territorial jurisdiction or in Metro Manila, at the
option of the SSS.
"SEC. 29. Government Aid. - The establishment of the SSS shall not
disqualify the members and employers from receiving such government
assistance, financial or otherwise, as may be Provided.
"SEC. 30. Transitory Clause. - Any employer who is delinquent or has not
remitted all contributions due and payable to the SSS may, within six (6)
months from the effectivity of this Act, remit said contributions or submit
a proposal to pay the same in installment within a period of not more
than twelve (12) months from the effectivity of this Act without incurring
the prescribed penalty, subject to the implementing rules and regulations
which the Commission may prescribe: Provided, That the employer
submits the corresponding collection lists together with the remittance or
proposal to pay in installments: Provided,further, That in case the
employer fails to remit contributions within the six-month grace period or
defaults in the payment of any amortization Provided the approved
proposal, the prescribed penalty shall be imposed from the time the
contributions first became due as Provided in Section 22 (a) hereof."

15
 Republic of the Philippines
Congress of the Philippines
Metro Manila
Tenth Congress
Republic Act No. 8291 May 30, 1997
AN ACT AMENDING PRESIDENTIAL DECREE NO. 1146, AS AMENDED,
EXPANDING AND INCREASING THE COVERAGE AND BENEFITS OF
THE GOVERNMENT SERVICE INSURANCE SYSTEM, INSTITUTING
REFORMS THEREIN AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled::
Section 1. Presidential Decree No. 1146, as amended, otherwise known as
the "Revised Government Service Insurance Act of 1977", is hereby further
amended to read as follows:
"SECTION 1. Title. - The title of this Act shall be: "The Government
Service Insurance System Act of 1997."
"A. DEFINITIONS
"SEC. 2. Definition of terms.- Unless the context otherwise indicates, the
following terms shall mean:
"(a) GSIS- The Government Service Insurance System created by
Commonwealth Act No. 186;
"(b) Board- The Board of Trustees of the Government Service Insurance
System;
"(c) Employer- The national government, its political subdivisions,
branches, agencies or instrumentalities, including government-owned or
controlled corporations, and financial institutions with original charters,
the constitutional commissions and the judiciary;
"(d) Employee or Member- Any person receiving compensation while in
the service of an employer as defined herein, whether by election or
appointment, irrespective of status of appointment, including barangay
and Sanggunian officials;
"(e) Active Member- A member who is not separated from the service;
"(f) Dependents- Dependents shall be the following: (a) the legitimate
spouse dependent for support upon the member or pensioner; (b) the
legitimate, legitimated, legally adopted child, including the illegitimate
child, who is unmarried, not gainfully employed, not over the age of
majority, or is over the age of majority but incapacitated and incapable of
16
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;
"(g) Primary beneficiaries- The legal dependent spouse until he/she
remarries and the dependent children;
"(h) Secondary beneficiaries- The dependent parents and, subject to the
restrictions on dependent children, the legitimate descendants;
"(i) Compensation- The basic pay or salary received by an employee,
pursuant to his election/appointment, excluding per diems, bonuses,
overtime pay, honoraria, allowances and any other emoluments received
in addition to the basic pay which are not integrated into the basic pay
under existing laws;
"(j) Contribution- The amount payable to the GSIS by the member and
the employer in accordance with Section 5 of this Act;
"(k) Current Daily Compensation- The actual daily compensation or the
actual monthly compensation divided by the number of working days in
the month of contingency but not to exceed twenty-two (22) days;
"(l) Average Monthly Compensation (AMC)- The quotient arrived at after
dividing the aggregate compensation received by the member during his
last thirty-six (36) months of service preceding his separation/retirement/
disability/death by thirty-six (36), or by the number of months he
received such compensation if he has less than thirty-six (36) months of
service: Provided, That the average monthly compensation shall in no
case exceed the amount and rate as may be respectively set by the Board
under the rules and regulations implementing this Act as determined by
the actuary of the GSIS:Provided, further, That initially the average
monthly compensation shall not exceed Ten thousand pesos (P10,000.00),
and premium shall be nine percent (9%) and twelve percent (12%) for
employee and employer covering the AMC limit and below and two
percent (2%) and twelve percent (12%) for employee and employer
covering the compensation above the AMC limit;
"(m) Revalued average monthly compensation- An amount equal to one
hundred seventy percent (170%) of the first One thousand pesos
(P1,000.00) of the average monthly compensation plus one hundred
percent (100%) of the average monthly compensation in excess of One
thousand pesos (P1,000.00);
"(n) Lump sum- The basic monthly pension multiplied by sixty (60);
"(o) Pensioner- Any person receiving old-age permanent total disability
pension or any person who has received the lump sum excluding one
receiving survivorship pension benefits as defined in Section 20 of this
Act;
"(p) Gainful Occupation- Any productive activity that provided the "Monthly Compensation Percentage of
member with income at least equal to the minimum compensation of MonthlyCompensation Payable by
government employees;
"(q) Disability- Any loss or impairment of the normal functions of the Member Employer
physical and/or mental faculty of a member which reduces or eliminates
I. Maximum Average
his/her capacity to continue with his/her current gainful occupation or
Monthly
engage in any other gainful occupation;
Compensation 9.0% 12.0%
"(r) Total Disability- Complete incapacity to continue with his present (AMC) Limit and
employment or engage in any gainful occupation due to the loss or Below
impairment of the normal functions of the physical and/or mental
faculties of the member; II. Over the Maximum
AMC Limit
"(s) Permanent Total Disability- Accrues or arises when recovery from the
impairment mentioned in Section 2 (Q) is medically remote; -Up to the Maximum 9.0% 12.0%
"(t) Temporary Total Disability- Accrues or arises when the impaired AMC Limit
physical and/or mental faculties can be rehabilitated and/or restored to
their normal functions; -In Excess of the AMC 2.0% 12.0%
Limit
"(u) Permanent Partial Disability- Accrues or arises upon the irrevocable
loss or impairment of certain portion/s of the physical faculties, despite "Members of the judiciary and constitutional commissioners shall pay
which the member is able to pursue a gainful occupation. three percent (3%) of their monthly compensation as personal share and
their employers a corresponding three percent (3%) share for their life
"B. MEMBERSHIP IN THE GSIS insurance coverage.
"SEC. 3. Compulsory Membership. - Membership in the GSIS shall be "(b) The employer shall include in its annual appropriation the necessary
compulsory for all employees receiving compensation who have not amounts for its share of the contributions indicated above, plus any
reached the compulsory retirement age, irrespective of employment additional premiums that may be required on account of the hazards or
status, except members of the Armed Forces of the Philippines and the risks of its employees occupation.
Philippine National Police, subject to the condition that they must settle
first their financial obligation with the GSIS, and contractuals who have "(c) It shall be mandatory and compulsory for all employers to include the
no employer and employee relationship with the agencies they serve. payment of contributions in their annual appropriations. Penal sanctions
shall be imposed upon employers who fail to include the payment of
"Except for the members of the judiciary and constitutional commissions contributions in their annual appropriations or otherwise fail to remit the
who shall have life insurance only, all members of the GSIS shall have accurate/exact amount of contributions on time, or delay the remittance
life insurance, retirement, and all other social security protections such of premium contributions to the GSIS. The heads of offices and agencies
as disability, survivorship, separation, and unemployment benefits. shall be administratively liable for non-remittance or delayed remittance
"SEC. 4. Effect of Separation from the Service. - A member separated of premium contributions to the GSIS.
from the service shall continue to be a member, and shall be entitled to "SEC. 6. Collection and Remittance of Contributions. - (a) The employer
whatever benefits he has qualified to in the event of any contingency shall report to the GSIS the names of all its employees, their
compensable under this Act. corresponding employment status, positions, salaries and such other
"C. SOURCES OF FUNDS pertinent information, including subsequent changes therein, if any, as
may be required by the GSIS; the employer shall deduct each month from
"SEC. 5. Contributions. - (a) It shall be mandatory for the member and the monthly salary or compensation of each employee the contribution
employer to pay the monthly contributions specified in the following payable by him in accordance with the schedule prescribed in the rules
schedule: and regulations implementing this Act.

17
"(b) Each employer shall remit directly to the GSIS the employees and
employers contributions within the first ten (10) days of the calendar
month following the month to which the contributions apply. The
remittance by the employer of the contribution to the GSIS shall take
priority over and above the payment of any and all obligations, except
salaries and wages of its employees.
"SEC. 7. Interest on Delayed Remittances. - Agencies which delay the
remittance of any and all monies due the GSIS shall be charged interests
as may be prescribed by the Board but not less than two percent (2%)
simple interest per month. Such interest shall be paid by the employers
concerned.
"SEC. 8. Government Guarantee. - The government of the Republic of the
Philippines hereby guarantees the fulfillment of the obligations of the
GSIS to its members as and when they fall due.
"D. BENEFITS
"SEC. 9. Computation of the Basic Monthly Pension. - (a) The basic
monthly pension is equal to:
"1) thirty-seven and one-half percent (37.5%) of the revalued average
monthly compensation; plus
"2) two and one-half percent (2.5%) of said revalued average monthly
compensation for each year of service in excess of (15)
years: Provided, That the basic monthly pension shall not exceed ninety
percent (90%) of the average monthly compensation.
"(b) The basic monthly pension may be adjusted upon the
recommendation of the President and General Manager of the GSIS and
approved by the President of the Philippines in accordance with the rules
and regulations prescribed by the GSIS: Provided, however, that the basic
monthly pension shall not be less than One thousand and three hundred
pesos (P1,300.00): Provided, further, that the basic monthly pension for
those who have rendered at least twenty (20) years of service after the
effectivity of this Act shall not be less than Two thousand four hundred
pesos (P2,400.00) a month.
"SEC. 10. Computation of Service. - (a) The computation of service for the
purpose of determining the amount of benefits payable under this Act
shall be from the date of original appointment/election, including periods
of service at different times under one or more employers, those
performed overseas under the authority of the Republic of the
Philippines, and those that may be prescribed by the GSIS in
coordination with the Civil Service Commission.
"(b) All service credited for retirement, resignation or separation for
which corresponding benefits have been awarded under this Act or other
laws shall be excluded in the computation of service in case of
18
reinstatement in the service of an employer and subsequent retirement
or separation which is compensable under this Act.
"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 as
may be prescribed by the GSIS.
"SEPARATION BENEFITS
"SEC. 11. Separation Benefits. - The separation benefits shall consist of:
(a) a cash payment equivalent to one hundred percent (100%) of his
average monthly compensation for each year of service he paid
contributions, but not less than Twelve thousand pesos (P12,000) payable
upon reaching sixty (60) years of age upon separation, whichever comes
later: Provided, that the member resigns or separates from the service
after he has rendered at least three (3) years of service but less than
fifteen (15) years; or
"(b) a cash payment equivalent to eighteen (18) times his basic monthly
pension at the time of resignation or separation, plus an old-age pension
benefit equal to the basic monthly pension payable monthly for life upon
reaching the age of sixty (60): Provided, that the member resigns or
separates from the service after he has rendered at least fifteen (15)
years of service and is below sixty (60) years of age at the time of
resignation or separation.
"SEC. 12. Unemployment or Involuntary Separation Benefits. -
Unemployment benefits in the form of monthly cash payments equivalent
to fifty percent (50%) of the average monthly compensation shall be paid
to a permanent employee who is involuntarily separated from the service
due to the abolition of his office or position usually resulting from
reorganization: Provided, That he has been paying integrated
contributions for at least one (1) year prior to separation. Unemployment
benefits shall be paid in accordance with the following schedules:
"Contributions Made Benefit Duration
1 year but less than 3 years 2 months
3 or more years but less than 6 years 3 months
6 or more years but less than 9 years 4 months
9 or more years but less than 11 years 5 months
11 or more years but less than 15 years 6 months
"The first payment shall be equivalent to two (2) monthly benefits. A
seven-day (7) waiting period shall be imposed on succeeding monthly
payments.
"All accumulated unemployment benefits paid to the employee during his
entire membership with the GSIS shall be deducted from voluntary
separation benefits.
"The GSIS shall prescribe the detailed guidelines in the
operationalization of this section in the rules and regulations
implementing this Act.
"RETIREMENT BENEFITS
"SEC. 13. Retirement Benefits. - (a) Retirement benefits shall be:
"(1) the lump sum payment as defined in this Act payable at the
time of retirement plus an old-age pension benefit equal to the
basic monthly pension payable monthly for life, starting upon
expiration of the five-year (5) guaranteed period covered by the
lump sum; or
"(2) cash payment equivalent to eighteen (18) months of his basic
monthly pension plus monthly pension for life payable
immediately with no five-year (5) guarantee.
"(b) Unless the service is extended by appropriate authorities, retirement
shall be compulsory for an employee of sixty-five (65) years of age with at
least fifteen (15) years of service: Provided, That if he has less than
fifteen (15) years of service, he may be allowed to continue in the service
in accordance with existing civil service rules and regulations.
"SEC. 13-A. Conditions for Entitlement. - A member who retires from the
service shall be entitled to the retirement benefits enumerated in
paragraph (a) of Section 13 hereof: Provided, That:
(1) he has rendered at least fifteen years of service;
(2) he is at least sixty (60) years of age at the time of retirement;
and
(3) he is not receiving a monthly pension benefit from permanent
total disability.
"SEC. 14. Periodic Pension Adjustment. - The monthly pension of all
pensioners including all those receiving survivorship pension benefits
shall be periodically adjusted as may be recommended by the GSIS
actuary and approved by the Board in accordance with the rules and
regulations prescribed by the GSIS.
"PERMANENT DISABILITY BENEFITS
"SEC. 15. General Conditions for Entitlement. - A member who suffers
permanent disability for reasons not due to his grave misconduct,
notorious negligence, habitual intoxication, or willful intention to kill
himself or another, shall be entitled to the benefits provided for under
19
Sections 16 and 17 immediately following, subject to the corresponding
conditions thereof.
"SEC. 16. Permanent Total Disability Benefits. - (a) If the permanent
disability is total, he shall receive a monthly income benefit for life equal
to the basic monthly pension effective from the date of
disability:Provided, That:
(1) he is in the service at the time of disability; or
(2) if separated from the service, he has paid at least thirty-six
(36) monthly contributions within the five (5) year period
immediately preceding disability, or has paid a total of at least
one hundred eighty (180) monthly contributions, prior to his
disability: Provided, further, That if at the time of disability, he
was in the service and has paid a total of at least one hundred
eighty (180) monthly contributions, in addition to the monthly
income benefit, he shall receive a cash payment equivalent to
eighteen (18) times his basic monthly pension: Provided,
finally, That a member cannot enjoy the monthly income benefit
for permanent disability and the old-age retirement
simultaneously.
"(b) If a member who suffers permanent total disability does not satisfy
conditions (1) and (2) in paragraph (a) of this section but has rendered at
least three (3) years of service at the time of his disability, he shall be
advanced the cash payment equivalent to one hundred percent (100%) of
his average monthly compensation for each year of service he paid
contributions, but not less than Twelve thousand pesos (P12,000.00)
which should have been his separation benefit.
"(c) Unless the member has reached the minimum retirement age,
disability benefit shall be suspended when:
"(1) he is reemployed; or
"(2) he recovers from his disability as determined by the GSIS,
whose decision shall be final and binding; or
"(3) he fails to present himself for medical examination when
required by the GSIS.
"(d) The following disabilities shall be deemed total and permanent:
"(1) complete loss of sight of both eyes;
"(2) loss of two (2) limbs at or above the ankle or wrist;
"(3) permanent complete paralysis of two (2) limbs;
"(4) brain injury resulting in incurable imbecility or insanity; and
"(5) such other cases as may be determined by the GSIS.
"SEC. 17. Permanent Partial Disability Benefits. - (a) If the disability is
partial, he shall receive a cash payment in accordance with a schedule of
disabilities to be prescribed by the GSIS: Provided, That he satisfies
either conditions (1) or (2) of Section 16 (a);
"(b) The following disabilities shall be deemed permanent partial:
"(1) complete and permanent loss of the use of:
(i) any finger
(ii) any toe
(iii) one arm
(iv) one hand
(v) one foot
(vi) one leg
(vii) one or both ears
(viii) hearing of one or both ears
(ix) sight of both eyes
"(2) such other cases as my be determined by the GSIS.
"TEMPORARY DISABILITY BENEFITS
"SEC. 18. Temporary Total Disability Benefits. - (a) A member who
suffers temporary total disability for reasons not due to any of the
conditions enumerated in Section 15 hereof shall be entitled to seventy-
five percent (75%) of his current daily compensation for each day or
fraction thereof of temporary disability benefit not exceeding one
hundred twenty (120) days in one calendar year after exhausting all his
sick leave credits and collective bargaining agreement sick leave benefits,
if any, but not earlier than the fourth day of his temporary total
disability: Provided, That:
"(1) he is in the service at the time of his disability; or
"(2) if separated, he has rendered at least three (3) years of
service and has paid at least six (6) monthly contributions in the
twelve-month period immediately preceding his disability.
"Provided, however, That a member cannot enjoy the temporary total
disability benefit and sick leave pay simultaneously: Provided,
further, That if the disability requires more extensive treatment that
lasts beyond one hundred twenty (120) days, the payment of the
temporary total disability benefit may be extended by the GSIS but not to
exceed a total of two hundred forty (240) days.
"(b) The temporary total disability benefit shall in no case be less than
Seventy pesos (P70.00) a day.
20
"(c) The notices required of the member and the employer, the mode of
payment, and the other requirements for entitlement to temporary total
disability benefits shall be provided in the rules and regulations to be
prescribed by the GSIS.
"SEC. 19. Non-scheduled Disability. - For injuries or illnesses resulting in
a disability not listed in the schedule of partial/total disability provided
herein, the GSIS shall determined the nature of the disability and the
corresponding benefits therefor.
"SURVIVORSHIP BENEFITS
"SEC. 20. Survivorship Benefits. - When a member or pensioner dies, the
beneficiaries shall be entitled to survivorship benefits provided in
Sections 21 and 22 hereunder subject to the conditions therein provided
for. The survivorship pension shall consist of:
(1) the basic survivorship pension which is fifty percent (50%) of
the basic monthly pension; and
(2) the dependent childrens pension not exceeding fifty percent
(50%) of the basic monthly pension
"SEC. 21. Death of a Member. - (a) Upon the death of a member, the
primary beneficiaries shall be entitled to:
(1) survivorship pension: Provided, That the deceased:
(i) was in the service at the time of his death; or
(ii) if separated from the service, has at least three (3)
years of service at the time of his death and has paid
thirty-six (36) monthly contributions within the five-year
period immediately preceding his death; or has paid a
total of at least one hundred eighty (180) monthly
contributions prior to his death; or
(2) the survivorship pension plus a cash payment equivalent to
one hundred percent (100%) of his average monthly
compensation for every year of service: Provided, That the
deceased was in the service at the time of his death with at least
three (3) years of service; or
(3) a cash payment equivalent to one hundred percent (100%) of
his average monthly compensation for each year of service he
paid contributions, but not less than Twelve thousand pesos
(P12,000.00): Provided, That the deceased has rendered at least
three (3) years of service prior to his death but does not qualify
for the benefits under item (1) or (2) of this paragraph.
(b) The survivorship pension shall be paid as follows:
 (1) when the dependent spouse is the only survivor, he/she shall
receive the basic survivorship pension for life or until he/she
remarries;
(2) when only dependent children are the survivors, they shall be
entitled to the basic survivorship pension for as long as they are
qualified, plus the dependent childrens pension equivalent to ten
percent (10%) of the basic monthly pension for every dependent
child not exceeding five (5), counted from the youngest and
without substitution;
(3) when the survivors are the dependent spouse and the
dependent children, the dependent spouse shall receive the basic
survivorship pension for life or until he/she remarries, and the
dependent children shall receive the dependent childrens
pension mentioned in the immediately preceding paragraph (2)
hereof.
(c) In the absence of primary beneficiaries, the secondary beneficiaries
shall be entitled to:
(1) the cash payment equivalent to one hundred percent (100%)
of his average monthly compensation for each year of service he
paid contributions, but not less than Twelve thousand pesos
(P12,000.00): Provided, That the member is in the service at the
time of his death and has at least three (3) years of service; or
(2) in the absence of secondary beneficiaries, the benefits under
this paragraph shall be paid to his legal heirs.
(d) For purposes of the survivorship benefits, legitimate children shall
include legally adopted and legitimated children.
"SEC. 22. Death of a Pensioner. - Upon the death of an old-age pensioner
or a member receiving the monthly income benefit for permanent
disability, the qualified beneficiaries shall be entitled to the survivorship
pension defined in Section 20 of this Act, subject to the provisions of
paragraph (b) of Section 21 hereof. 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.
"FUNERAL BENEFITS
"SEC. 23. Funeral Benefits. - The amount of the funeral benefits shall be
determined and specified by the GSIS in the rules and regulations but
shall not be less than Twelve thousand pesos (P12,000.00):Provided, That
it shall be increased to at least Eighteen thousand pesos (P18,000.00)
after five (5) years and shall be paid upon the death of:
(a) an active member as defined under Section 2 (e) of this Act; or
21
(b) a member who has been separated from the service, but who
may be entitled to future benefit pursuant to Section 4 of this
Act; or
(c) a pensioner, as defined in Section 2 (o) of this Act; or
(d) a retiree who at the time of his retirement was of pensionable
age under this Act but who opted to retire under Republic Act
No. 1616.
"LIFE INSURANCE BENEFITS
"SEC. 24. Compulsory Life Insurance. - All employees except for Members
of the Armed Forces of the Philippines (AFP) and the Philippine National
Police (PNP) shall, under such terms and conditions as may be
promulgated by the GSIS, be compulsorily covered with life insurance,
which shall automatically take effect as follows:
(1) for those employed after the effectivity of this Act, their
insurance shall take effect on the date of their employment;
(2) for those whose insurance will mature after the effectivity of
this Act, their insurance shall be deemed renewed on the day
following the maturity or expiry date of their insurance;
(3) for those without any life insurance as of the effectivity of this
Act, their insurance shall take effect following said effectivity.
"SEC. 25. Dividends. - An annual dividend may be granted to all
members of the GSIS whose life insurance is in force for at least one (1)
year in accordance with a dividends allocation formula to be determined
by the GSIS.
"SEC. 26. Optional Insurance. - Subject to the rules and regulations
prescribed by the GSIS, a member may apply for insurance and/or pre-
need coverage embracing life, health, hospitalization, education,
memorial plans, and such other plans as may be designed by the GSIS,
for himself and/or his dependents. Any employer may likewise apply for
group insurance coverage for its employees. The payment of the
premiums/installments for optional insurance and pre-need products may
be made by the insured or his employer and/or any person acceptable to
the GSIS.
"SEC. 27. Reinsurance. - The GSIS may reinsure any of its interests or
part thereof with any private company or reinsurer whether domestic of
foreign: Provided, That the GSIS shall submit an annual report on its
reinsurance operations to the Insurance Commission.
"E. ADJUDICATION OF CLAIMS AND DISPUTES
"SEC. 28. Prescription. - Claims for benefits under this Act except for life
and retirement shall prescribe after four (4) years from the date of
contingency.
"SEC. 29. Facility of Payment. - The GSIS shall prescribe rules and
regulations to facilitate payment of benefits, proceeds, and claims under
this Act and any other laws administered by the GSIS. Payments made
by the GSIS prior to its receipt of an adverse claim, to a beneficiary or
claimant subsequently found not entitled thereto, shall not bar the legal
and eligible recipient to his right to demand the payment of benefits,
proceeds, and claims from the GSIS, who shall, however, have a right to
institute the appropriate action in a court of law against the ineligible
recipient.
"SEC. 30. Settlement of Disputes. - The GSIS shall have original and
exclusive jurisdiction to settle any disputes arising under this Act and
any other laws administered by the GSIS.
The Board may designate any member of the Board, or official of the
GSIS who is a lawyer, to act as hearing officer to receive evidence, make
findings of fact and submit recommendations, together with all
documentary and testimonial evidence to the Board within thirty (30)
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 (30) days from the receipt of the hearing officers findings
and recommendations. The cases heard directly by the Board shall be
decided within thirty (30) working days from the time they are submitted
by the parties for decision.
"SEC. 31. Appeals. - Appeals from any decision or award of the Board
shall be governed by Rules 43 and 45 of the 1997 Rules of Civil Procedure
adopted by the Supreme Court on April 8, 1997 which will take effect on
July 1, 1997: Provided, That pending cases and those filed prior to July 1,
1997 shall be governed by the applicable rules of procedure: Provided,
further, That the appeal shall take precedence over all other cases except
criminal cases when the penalty of life imprisonment or death
or reclusion perpetua is imposable.
The appeal shall not stay the execution of the order or award unless
ordered by the Board, by the Court of Appeals or by the Supreme Court
and the appeal shall be without prejudice to the special civil action of
certiorari when proper.
"SEC. 32. 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 Regional Trial Court.
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
GSIS, be punished for contempt.
22
"SEC. 33. Oaths, Witnesses, and Production of Records. - When
authorized by the Board, an official or employee of the GSIS shall have
the power to administer oath and affirmation, take deposition, certify to
official acts, and issue subpoena ad testificandum and subpoena duces
tecum to compel the attendance of witnesses and the production of books,
papers, correspondences, 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 580 of the Revised Administrative Code.
"F. FUNDS OF THE GSIS
"SEC. 34. Funds. - All contributions payable under Section 5 of this Act
together with the earnings and accruals thereon shall constitute the
GSIS Social Insurance Fund. The said fund shall be used to finance the
benefits administered by the GSIS under this Act. In addition, the GSIS
shall administer the optional insurance fund for the insurance coverage
described in Section 26 hereof, the Employees Compensation Insurance
Fund created under P.D. 626, as amended, General Insurance Fund
created under Act No. 656, as amended, and such other special funds
existing or that may be created for special groups or persons rendering
services to the government. The GSIS shall maintain the required
reserves to guarantee the fulfillment of its obligations under this Act.
The funds of the GSIS shall not be used for purposes other than what are
provided for under this Act. Moreover, no portion of the funds of the GSIS
or income thereof shall accrue to the General Fund of the national
government and its political subdivisions, instrumentalities and other
agencies including government-owned and controlled corporations except
as may be allowed under this Act.
"SEC. 35. Deposits and Disbursements. - All revenues collected and all
accruals thereto shall be deposited, administered and disbursed in
accordance with the law. A maximum expense loading of twelve percent
(12%) 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.
"SEC. 36. Investment of Funds. - The funds of the GSIS which are not
needed to meet the current obligations may be invested under such terms
and conditions and rules and regulations as may be prescribed by the
Board: Provided, That investments shall satisfy the requirements of
liquidity, safety/security and yield in order to ensure the actuarial
solvency of the funds of the GSIS: Provided, further, That the GSIS shall
submit an annual report on all investments made to both Houses of
Congress of the Philippines, to wit:
(a) in interest-bearing bonds or securities or other evidence of
indebtedness of the Government of the Philippines;
(b) in interest-bearing deposits or securities in any domestic bank
doing business in the Philippines:Provided, That in the case of
such deposits, there shall not exceed at any time the unimpaired
capital and surplus or total private deposits of the depository
bank, whichever is smaller: Provided, further, That the said bank
has prior designation as a depository for the purpose by the
Monetary Board of the Central Monetary Authority;
(c) in direct housing loans to members and group housing
projects secured by first mortgage, giving priority to the low
income groups and in short and medium term loans to members
such as salary, policy, educational, emergency stock purchase
plan and other similar loans: Provided, That no less than forty
percent (40%) of the investible fund of the GSIS Social Insurance
Fund shall be invested for these purposes;
(d) in bonds, securities, promissory notes or other evidence of
indebtedness of educational or medical institutions to finance the
construction, improvement and maintenance of schools and
hospitals;
(e) in real estate property including shares of stocks involving
real state property and investments secured by first mortgages
on real estate or other collaterals acceptable to the
GSIS: Provided,That such investment shall, in the determination
of the Board, redound to the benefit of the GSIS, its members as
well as the general public;
(f) in debt instruments and other securities traded in the
secondary markets;
(g) in loans to, or in bonds, debentures, promissory notes or other
evidence of indebtedness of any solvent corporation created or
existing under the laws of the Philippines;
(h) in common and preferred stocks of any solvent corporation or
financial institution created or existing under the laws of the
Philippines listed in the stock exchange with proven track record
of profitability over the last three (3) years and payment of
dividends at least once over the same period;
(i) in domestic mutual funds including investments related to the
operations of mutual funds; and
(j) in foreign mutual funds and in foreign currency deposits or
foreign currency-denominated debts, non-speculative equities
and other financial instruments or other assets issued in
accordance with existing laws of the countries where such
financial instruments are issued: Provided, That these
instruments or assets are listed in bourses of the respective
countries where these instruments or assets are
23
issued: Provided, further, That the issuing company has proven
track record of profitability over the last three (3) years and
payment of dividends at least once over the same period.
"SEC. 37. Records and Reports. - The GSIS 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 GSIS 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. The
GSIS shall maintain appropriate books of accounts to record its assets,
liabilities, income, expenses, receipts and disbursement of funds and
other financial transactions and operations.
"SEC. 38. Examination and Valuation of the Funds. - The GSIS shall
make a periodic actuarial examination and valuation of its funds in
accordance with accepted actuarial principles.
"SEC. 39. 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 GSIS shall be preserved and maintained at all times and
that 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
GSIS and their employers. Taxes imposed on the GSIS tend to impair the
actuarial solvency of its funds and increase the contribution rate
necessary to sustain the benefits of this Act. Accordingly,
notwithstanding any laws to the contrary, the GSIS, its assets, revenues
including all accruals thereto, and benefits paid, shall be exempt from all
taxes, assessments, fees, charges, or duties of all kinds. These
exemptions shall continue unless expressly and specifically revoked and
any assessment against the GSIS as of the approval of this Act are
hereby considered paid. Consequently, all laws, ordinances, regulations,
issuances, opinions or jurisprudence contrary to or in derogation of this
provision are hereby deemed repealed, superseded and rendered
ineffective and without legal force and effect.
"Moreover, these exemptions shall not be affected by subsequent laws to
the contrary unless this section is expressly, specifically and categorically
revoked or repealed by law and a provision is enacted to substitute or
replace the exemption referred to herein as an essential factor to
maintain or protect the solvency of the fund, notwithstanding and
independently of the guaranty of the national government to secure such
solvency or liability.
"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 agencies or administrative
bodies including Commission on Audit (COA) disallowances and from all
financial 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.
"G. ADMINISTRATION
"SEC. 40. Implementing Body. - The Government Service Insurance
System as created under Commonwealth Act No. 186 shall implement
the provisions of this Act.
"SEC. 41. Powers and Functions of the GSIS. - The GSIS shall exercise
the following powers and functions:
(a) to formulate, adopt, amend and/or rescind such rules and
regulations as may be necessary to carry out the provisions and
purposes of this Act, as well as the effective exercise of the
powers and functions, and the discharge of duties and
responsibilities of the GSIS, its officers and employees;
(b) to adopt or approve the annual and supplemental budget of
receipts and expenditures including salaries and allowances of
the GSIS personnel; to authorize such capital and operating
expenditures and disbursements of the GSIS as may be
necessary and proper for the effective management and operation
of the GSIS;
(c) to invest the funds of the GSIS, directly or indirectly, in
accordance with the provisions of this Act;
(d) to acquire, utilize or dispose of, in any manner recognized by
law, real or personal property in the Philippines or elsewhere
necessary to carry out the purposes of this Act;
(e) to conduct continuing actuarial and statistical studies and
valuations to determine the financial condition of the GSIS 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 re-allocation of
the funds to the contingencies covered;
(f) to have the power of succession;
(g) to sue and be sued;
(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;
(i) to carry on any other lawful business whatsoever in pursuance
of, or in connection with the provisions of this Act;
24
(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: Provided, That the
GSIS shall maintain a branch office in every province where
there exists a minimum of fifteen thousand (15,000) membership;
(k) to borrow funds from any source, private or government,
foreign or domestic, only as an incident in the securitization of
housing mortgages of the GSIS and on account of its receivables
from any government or private entity;
(l) to invest, own or otherwise participate in equity in any
establishment, firm or entity;
(m) to approve appointments in the GSIS except appointments to
positions which are policy determining, primarily confidential or
highly technical in nature according to the Civil Service rules
and regulations: Provided, That all positions in the GSIS shall be
governed by the compensation and position classification system
and qualifications standards approved by the GSIS Board of
Trustees based on a comprehensive job analysis and audit of
actual duties and responsibilities:Provided, further, That the
compensation plan shall be comparable with the prevailing
compensation plans in the private sector and shall be subject to
the periodic review by the Board no more than once every four (4)
years without prejudice to yearly merit reviews or increases
based on productivity and profitability;
(n) to design and adopt an Early Retirement Incentives Plan
(ERIP) and/or financial assistance for the purpose of retirement
for its own personnel;
(o) to fix and periodically review and adjust the rates of interest
and other terms and conditions for loans and credits extended to
members or other persons, whether natural or juridical;
(p) to enter into agreement with the Social Security System or
any other entity, enterprise, corporation or partnership for the
benefit of members transferring from one system to another
subject to the provisions of Republic Act No. 7699, otherwise
known as the Portability Law;
(q) to be able to float proper instrument to liquefy long-term
maturity by pooling funds for short-term secondary market;
(r) to submit annually, not later than June 30, a public report to
the President of the Philippines and the Congress of the
Philippines regarding its activities in the administration and
enforcement of this Act during the preceding year including
information and recommendations on board policies for the
development and perfection of the programs of the GSIS;
(s) to maintain a provident fund, which consists of contributions
made by both the GSIS and its officials and employees and their
earnings, for the payments of benefits to such officials and
employees or their heirs under such terms and conditions as it
may prescribe;
(t) to approve and adopt guidelines affecting investments,
insurance coverage of government properties, settlement of
claims, disposition of acquired assets, privatization or expansion
of subsidiaries, development of housing projects, increased
benefit and loan packages to members, and the enforcement of
the provision of this Act;
(u) any provision of law to the contrary notwithstanding, to
authorize the payment of extra remuneration to the officials and
employees directly involved in the collection and/or remittances
of contributions, loan repayments, and other monies due to the
GSIS at such rates and under such conditions as it may
adopt: Provided, That the best interest of the GSIS shall be
observed thereby;
(v) to determine, fix and impose interest upon unpaid premiums
due from employers and employees;
(w) to ensure the collection or recovery of all indebtedness,
liabilities and/or accountabilities, including unpaid premiums or
contributions in favor of the GSIS arising from any cause or
source whatsoever, due from obligors, whether public or private.
The Board shall demand payment or settlement of the
obligations referred to herein within thirty (30) days from the
date the obligation becomes due, and in the event of failure or
refusal of the obligor or debtor to comply with the demand, to
initiate or institute the necessary or proper actions or suits,
criminal, civil or administrative or otherwise, before the courts,
tribunals, commissions, boards, or bodies of proper jurisdiction
within thirty (30) days reckoned from the expiry date of the
period fixed in the demand within which to pay or settle the
account;
(x) to design and implement programs that will promote and
mobilize savings and provide additional resources for social
security expansion and at the same time afford individual
members appropriate returns on their savings/investments. The
programs shall be so designed as to spur socio-economic take-off
and maintain continued growth; and
25
(y) to exercise such powers and perform such other acts as may
be necessary, useful, incidental or auxiliary to carry out the
provisions of this Act, or to attain the purposes and objectives of
this Act.
"SEC. 42. The Board of Trustees; its Composition; Tenure and
Compensation. - The corporate powers and functions of the GSIS shall be
vested in and exercised by the Board of Trustees composed of the
President and General Manager of the GSIS and eight (8) other members
to be appointed by the President of the Philippines, one (1) of whom shall
be either the President of the Philippine Public School Teachers
Association (PPSTA) or the President of the Philippine Association of
School Superintendents (PASS), another two (2) shall represent the
leading organizations or associations of government employees/retirees,
another four (4) from the banking, finance, investment, and insurance
sectors, and one (1) recognized member of the legal profession who at the
time of appointment is also a member of the GSIS. The Trustees shall
elect from among themselves a Chairman while the President and
General Manager of the GSIS shall automatically be the vice-chairman.
The Trustees, except the President and General Manager who shall cease
as trustee upon his separation, shall hold office for six (6) years without
reappointment, 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 Two thousand five hundred pesos (P2,500.00) for each board
meeting actually attended by them, but not to exceed Ten thousand pesos
(P10,000.00) a month and reasonable transportation and representation
allowances as may be fixed by the Board.
"SEC. 43. Powers and Functions of the Board of Trustees. - The Board of
Trustees shall have the following powers and functions:
"(a) to formulate the policies, guidelines and programs to
effectively carry out the purposes of this Act;
"(b) to promulgate such rules and regulations as may be
necessary or proper for the effective exercise of the powers and
functions as well as the discharge of the duties and
responsibilities of the GSIS, its officers and employees;
"(c) upon the recommendation of the President and General
Manager, to approve the annual and supplemental budget of
receipts and expenditures of the GSIS, and to authorize such
operating and capital expenditures and disbursements of the
GSIS as may be necessary or proper for the effective
management, operation and administration of the GSIS;
"(d) upon the recommendation of the President and General
Manager, to approve the GSIS organizational and administrative
 structure and staffing pattern, and to establish, fix, review,
revise and adjust the appropriate compensation packages for the
officers and employees of the GSIS and reasonable allowances,
incentives, bonuses, privileges and other benefits as may be
necessary or proper for the effective management, operation and
administration of the GSIS, which shall be exempt from Republic
Act No. 6758, otherwise known as the Attrition Law;
"(e) to fix and periodically review and adjust the rates of interest
and other terms and conditions for loans and credits extended to
its members or other persons, whether natural or juridical;
"(f) the provision of any law to the contrary notwithstanding, to
compromise or release, in whole or in part, any claim or settle
liability to the GSIS, regardless of the amount involved, under
such terms and conditions as it may impose for the best interest
of the GSIS;
"(g) to approve and adopt guidelines affecting investments,
insurance coverage of government properties, settlement of
claims, disposition of acquired assets, development of housing
projects, increased benefit and loan packages to members, and
the enforcement of the provisions of this Act;
"(h) to determine, fix, and impose interest upon unpaid or
unremitted premiums and/or contributions; and
"(i) to do and perform any and all acts necessary, proper or
incidental to the attainment of the purposes and objectives of
this Act.
"SEC. 44. Appointment, Qualifications, and Compensation of the
President and General Manager and of other Personnel. - The President
and General Manager of the GSIS shall be its Chief Executive Officer
and shall be appointed by the President of the Philippines. He shall be a
person with management and investments expertise necessary for the
effective performance of his duties and functions under this Act.
"The GSIS President and General Manager shall be assisted by one or
more executive vice-presidents, senior vice-presidents and managers in
addition to the usual supervisory and rank-and-file positions who shall be
appointed and removed by the President and General Manager with the
approval of the Board, in accordance with the existing Civil Service rules
and regulations.
"SEC. 45. Powers and Duties of the President and General Manager. - The
President and General Manager of the GSIS shall, among others, execute
and administer the policies and resolutions approved by the Board and
direct and supervise the administration and operations of the GSIS. The
President and General Manager, subject to the approval of the Board,
shall appoint the personnel of the GSIS, remove, suspend or otherwise
26
discipline them for cause, in accordance with the existing Civil Service
rules and regulations, and prescribe their duties and qualifications to the
end that only competent persons may be employed.
"SEC. 46. Auditor. - (a) The Chairman of the Commission on Audit shall
be the ex officio auditor of the GSIS, and the necessary personnel to
assist said representative in the performance of his duties.
"(b) The Chairman of the Commission on Audit or his authorized
representatives, shall submit to the Board soon after the close of each
calendar year, an audited statement showing the financial condition and
progress of the GSIS for the calendar year just ended.
"SEC. 47. Legal Counsel. - The Government Corporate Counsel shall be
the legal adviser and consultant of the GSIS, but the GSIS may assign to
the Office of the Government Corporate Counsel (OGCC) cases for legal
action or trial, issues for legal opinions, preparation and review of
contracts/agreements and others, as the GSIS may decide or determine
from time to time: Provided, however, That the present legal services
group in the GSIS shall serve as its in-house legal counsel.
"The GSIS may, subject to approval by the proper court, deputize any
personnel of the legal service group to act as special sheriff in the
enforcement of writs and processes issued by the court, quasi-judicial
agencies or administrative bodies in cases involving the GSIS.
"SEC. 48. Powers of the Insurance Commission. - The Insurance
Commissioner or his authorized representatives shall make an
examination of financial condition and methods of transacting business of
the GSIS at least once every three (3) years and the report of said
examination shall be submitted to the Board of Trustees and copies
thereof be furnished the Office of the President of the Philippines and the
two houses of the Congress of the Philippines within five (5) days after
the close of examination: Provided, however, That for each examination,
the GSIS shall pay the office of the Insurance Commissioner an amount
equal to the actual expenses incurred by the said office in the conduct of
examination, including the salaries of the examiners and of the actuary
of such examination for the actual time spent.
"H. GENERAL PROVISION
"SEC. 49. Dispensation of Social Insurance Benefits. - (a) The GSIS shall
pay the retirement benefits to the employee on his last day of service in
the government: Provided, That all requirements are submitted to the
GSIS within a reasonable period prior to the effective date of the
retirement;
"(b) The GSIS shall discontinue the processing and adjudication of
retirement claims under R.A. No. 1616 except refund of retirement
premium under R. A. No. 910. Instead, all agencies concerned shall
process and pay the gratuities of their employees. The Board shall adopt
the proper rules and procedures for the implementation of this provision.
"SEC. 50. Development and Disposition of Acquired Assets. - The GSIS
shall have the right to develop and dispose of its acquired assets obtained
in the ordinary course of its business. To add value to, improve
profitability on, and/or enhance the marketability of an acquired asset,
the GSIS may further develop/renovate the same either with its own
capital or through a joint venture arrangement with private companies or
individuals.
"The GSIS may sell its acquired assets in accordance with existing
Commission on Audit (COA) rules and regulations for an amount not
lower than the current market value of the property. For this purpose,
the GSIS shall conduct an annual appraisal of its property or acquired
assets to determine its current market value. All notices of sale shall be
published in newspapers of general circulation.
"No injunction or restraining order issued by any court, commission,
tribunal or office shall bar, impede or delay the sale and disposition by
the GSIS of its acquired assets except on questions of ownership and
national or public interest.
"SEC. 51. Government Assistance to the GSIS. - The GSIS may call upon
any employer for such assistance as may be necessary in the discharge of
its duties and functions.
"I. PENAL PROVISIONS
"SEC. 52. 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 GSIS, whether for him or
for some other persons, shall suffer the penalties provided for in Article
172 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 GSIS,
or any third party, shall be punished by a fine of not less than Five
thousand pesos (P5,000.00) nor more than Twenty thousand pesos
(P20,000.00) or by imprisonment of not less than six (6) years and one (1)
day to twelve (12) years, or both, at the discretion of the court.
"(c) Whoever fails or refuses to comply with the provisions of this Act or
with the rules and regulations adopted by the GSIS, shall be punished by
a fine of not less than Five thousand pesos (P5,000.00) nor more than
Twenty thousand pesos (P20,000.00) or imprisonment of not less than six
(6) years and one (1) day to twelve (12) years, or both, at the discretion of
the court.
27
"(d) The treasurer, finance officer, cashier, disbursing officer, budget
officer or other official or employee who fails to include in the annual
budget the amount corresponding to the employer and employee
contributions, or who fails or refuses or delays by more than thirty (30)
days from the time such amount becomes due and demandable, or to
deduct the monthly contributions of the employee shall, upon conviction
by final judgment, suffer the penalties of imprisonment from six (6)
months and one (1) day to six (6) years, and a fine of not less than Three
thousand pesos (P3,000.00) but not more than Six thousand pesos
(P6,000.00), and in addition, shall suffer absolute perpetual
disqualification from holding public office and from practicing 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 GSIS and appropriates the same,
or takes or misappropriates or uses the same for any purpose other than
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
misappropriation of said fund or property, in whole or in part, shall suffer
the penalties provided in Article 217 of the Revised Penal Code, and in
addition, shall suffer absolute perpetual disqualification from holding
public office and from practicing any profession or calling licensed by the
government.
"(f) Any employee who, after deducting the monthly contribution or loan
amortization from a members compensation, fails to remit the same to
the GSIS within thirty (30) 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 315 of the Revised Penal Code, and in addition, shall
suffer absolute perpetual disqualification from holding public office and
from practicing any profession or calling licensed by the government.
"(g) The heads of the offices of the national government, its political
subdivisions, branches, agencies and instrumentalities, including
government-owned or controlled corporations and government financial
institutions, and the personnel of such offices who are involved in the
collection of premium contributions, loan amortization and other
accounts due the GSIS who shall fail, refuse or delay the payment,
turnover, remittance or delivery of such accounts to the GSIS within
thirty (30) days from the time that the same shall have been due and
demandable shall, upon conviction by final judgment, suffer the penalties
of imprisonment of not less than one (1) year nor more than five (5) years
and a fine of not less than Ten thousand pesos (P10,000.00) nor more
than Twenty thousand pesos (P20,000.00), and in addition, shall suffer
absolute perpetual disqualification from holding public office and from
practicing any profession or calling licensed by the government.
 "(h) The officers and/or personnel referred to in paragraph (g) of this accordingly: Provided, That the rights under the existing laws, rules and
section shall be liable not only criminally but also civilly to the GSIS or to regulations vested upon or acquired by an employee who is already in the service
the employee or member concerned in the form of damages, including as of the effectivity of this Act shall remain in force and effect: Provided,
surcharges and interests. further, That subsequent to the effectivity of this Act, a new employee or an
employee who has previously retired or separated and is reemployed in the
"(i) For the charges or complaints referred to in paragraph (g) of this
service shall be covered by the provisions of this Act.
section, the liabilities therein set forth shall be construed as waiver of the
State of its immunity from suit, hence, the above-mentioned officials Section 4. Effectivity. - This Act shall take effect fifteen (15) days after its
and/or personnel may not invoke the defense of non-suability of the State. publication in the Official Gazette or in at least two (2) newspapers of general
circulation.
"(j) Failure of the Members of the GSIS Board, including the chairman
and the vice-chairman, to comply with the provisions of paragraph (w) of This Act, which is a consolidation of Senate Bill No. 2013 and House Bill No.
Section 41 hereof, shall subject them to imprisonment of not less than six 8561, was finally passed by the Senate and the House of Representatives on May
(6) months nor more than one (1) year or a fine of not less than Five 29, 1997 and May 28, 1997, respectively.
thousand pesos (P5,000.00) nor more than Ten thousand pesos
Approved: May 30, 1997.
(P10,000.00) without prejudice to any civil or administrative liability
which may also arise therefrom.
"(k) Criminal actions arising from violations of the provisions of this Act
may be commenced by the GSIS or by the aggrieved member, either
under this Act or, in appropriate cases, under the Revised Penal Code.
"SEC. 53. Implementing Rules and Regulations. - The implementing rules
and regulations to carry out the provisions of this Act shall be adopted
and promulgated by the GSIS not later than ninety (90) days after the
approval of this Act.
"SEC. 54. 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.
"SEC. 55. Exclusiveness of Benefits. - Whenever other laws provide
similar benefits for the same contingencies covered by this Act, the
member who qualifies to the benefits 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
GSIS shall pay only the difference.
"SEC. 56. Appropriations. - The amount necessary to carry out the
provisions of this Act shall be included in the respective budgets of the
agencies in the national government obligation program of the year
following its enactment into law and thereafter."
Section 2. Separability 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 and effect.
Section 3. Repealing Clause. - All laws and any other law or parts of law
specifically inconsistent herewith are hereby repealed or modified

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