Law Summary
Scope and Compulsory Membership
- Membership compulsory for regularly and permanently appointed employees, teachers (except substitutes), and regular military personnel.
- Compulsory membership for municipal employees depends on whether the local government has joined the System.
- Membership optional for elective officials who must notify and comply with the System's requirements to enroll.
- Employers and employees share premium payment for life insurance for optional members.
Premium Contribution Rates and Payment
- Employees and employers pay monthly premiums based on salary for life insurance and retirement insurance.
- Specific rates apply for different employee categories and salary brackets.
- Premiums for optional insurance fully borne by the member.
- Additional optional retirement annuity contributions allowed, capped at 10% of lifetime salaries, accruing 3% interest.
- Employers deduct premiums monthly and remit quarterly to the System.
- Members not in service may pay premiums directly.
Employer's Responsibilities
- Employers must allocate annual appropriations to pay their share of premiums.
- Employer premiums cease upon policy maturity, unless a new policy is acquired.
- Premium liability transfers with the employee when moving between employers.
- Board empowered to impose fines on officials delaying premium remittance and to authorize extra remuneration.
Additional Premiums and Fund Supplementation
- Employers pay additional premiums for employee service prior to Act's approval.
- The Board may supplement premiums through donations or gifts.
- Savings from salary appropriations by employers transferred to the GSIS for benefit payments.
Life Insurance Benefits
- Compulsory members insured automatically after specified months following employment, contingent on medical approval.
- Optional members insured upon premium payment and approval.
- Compulsory insurance is term insurance equal to annual salary, with exceptions.
- Optional insurance may be term or endowment type based on premiums paid.
Optional Additional Insurance
- Members may apply for extra life insurance, up to their annual salary.
- Full payment of premiums for additional insurance is the member's responsibility.
Retirement Insurance Benefits
- Retirement annuity is life-long, with minimum five years guaranteed.
- Monthly annuity calculated based on age at retirement, years of service, and average salary.
- Maximum annuity capped at two-thirds of salary or a fixed amount.
- Survivors receive benefits if member dies before retirement eligibility.
- Disability benefits determined by length of service.
- Dismissal or voluntary separation entitles member only to own premiums with interest.
Conditions for Retirement
- Retirement optional at 30 years of service and age 57, with specific continuous service and contribution requirements.
- Disqualification-based retirement after Civil Service Board hearing.
- Mandatory retirement at age 65 with exceptions.
- Reemployment affects annuity eligibility and payments.
- Credit for prior service recognized under conditions including refunding prior benefits.
Computation of Service Period
- Service counted from original employment including multiple employers, overseas service, and military service.
- Exclusions apply for service with retirement pay or without premium payments.
- Special provisions for service interruptions during war periods.
Life Insurance Policy Provisions
- Policies non-assignable except to the System.
- Policies exempt from taxes and cannot be considered gratuities.
- Policies remain in force if conditions met regardless of employment status.
Administration and Governance
- GSIS is a non-stock corporation managed by a Board of Trustees appointed by the President and confirmed.
- Board elects officers and serves fixed terms with staggered initial appointments.
- Trustees receive per diem for sessions.
Powers and Duties of the Board
- Adopt bylaws, rules, set budgets, and organize accounting units.
- Invest funds, establish branches, acquire property.
- Prescribe insurance forms, premiums, and contracts.
- Operate or contract for medical services.
- Adjust rates and benefits based on actuarial valuations.
- Sue and be sued and engage in activities necessary for system operation.
Personnel Management
- Board appoints general manager, actuary, and other key personnel.
- Personnel must meet civil service standards.
- Auditor General appoints system auditor and assistants.
Records and Reporting
- Actuarial data and separate fund accounts must be maintained.
- Annual report to the President and Congress within four months after fiscal year-end.
Fund Structure
- Separate funds for life insurance, retirement insurance, contingency reserve, and general expenses.
- Government guarantees fulfillment of obligations.
Distribution of Surplus
- Disposable surplus from life insurance fund may be apportioned to members with active policies.
Legal Protections and Exemptions
- Life insurance policies and proceeds exempt from attachment or legal claims.
- Exceptions apply for debts owed to employers.
- GSIS exempt from taxes and certain laws unless explicitly included.
Appropriations
- Government appropriates necessary funds to pay employer contributions annually.
Abolition and Transition of Other Pension Plans
- Existing local government retirement plans abolished in favor of GSIS.
- Members with prior rights may elect GSIS benefits, with appropriate credits and refunds.
Penalties for Fraud
- Fraudulent acts involving GSIS documents or benefits punishable by fines up to P1,000, imprisonment up to one year, or both.
- Offenders disqualified from public office and licensed professions.
Special Retirement Provisions
- Officers or employees who died before Act's effect with sufficient service may be considered retired.
- Those separated by reorganization or who meet age/service conditions may elect retirement under the Act upon refunding prior benefits.
Deferral of Payments
- Employers financially unable to pay retirement contributions may defer under Board-prescribed conditions.
Effective Date
- Act effective upon approval; premium payment deferral subject to conditions.