Question & AnswerQ&A (Commonwealth Act No. 186)
The short title is the "Government Service Insurance Act."
An Employee is any person in the service of the Government of the Commonwealth of the Philippines, its subdivisions, agencies, and instrumentalities, including enlisted men or officers of the Regular Force, Philippine Army, possessing either temporary or permanent civil service status.
It excludes all bonuses, allowances, overtime pay, or any pay given in addition to the base pay fixed by law or regulations.
It is an institution established to promote efficiency and welfare among government employees and to replace previous pension systems.
All regularly and permanently appointed employees of the Government of the Commonwealth, members of the judiciary, officers and enlisted men of the Regular Force Philippine Army, employees of Metropolitan Water District, other government boards or agencies (except the University of the Philippines and government-owned or controlled corporations), and others specified under the law.
Starting from the sixth month following the Act's effect or employment, a monthly deduction of 3% of the basic salary for regular employees and 5% for officers and enlisted men of the Regular Force, Philippine Army, withheld from their monthly salary as payment for membership policy premiums.
The government contributes an amount equivalent to 3% of the basic salary of regular members, excluding officers and enlisted men of the Philippine Army, plus extra premiums due to extra hazards of occupation.
The benefits under his membership policy are forfeited to the System except one-half of the cash or surrender value which is paid to the member or his beneficiary.
They can (a) collect the cash surrender value, (b) continue the policy by paying full premiums, (c) obtain a paid-up or extended-term insurance based on paid premiums, or (d) utilize other options provided in the policy.
It is administered by the Government Service Insurance Board composed of five members appointed by the President, with consent from the Commission on Appointments of the National Assembly.
The Board acts as a corporation, can sue or be sued, adopt rules and regulations, prescribe life insurance forms, fix premium rates, and approve issuance of policies subject to approval by the Secretary of Finance.
Yes, all policies and their proceeds are exempt from all taxes.
Investments may be made in government bonds or securities, bank deposits in banks with a minimum paid-up capital of 1.5 million pesos, first lien mortgages on specified real estate, loans to provincial and municipal governments, and loans to members on policy security, among others.
Loans must not exceed 50% of the appraised value of the real estate and the loan period shall not exceed ten years. Also, no more than 70% of the System’s total assets can be invested in such loans.
It is apportioned annually among members according to a schedule prepared by the Actuary and approved by the Board after reserving for liabilities, expenses, and contingencies.
No, except in matters concerning loans on the security of their policy, Board members cannot partake in investigations or proceedings where they have an interest.
The Act took effect upon its approval on November 14, 1936.