Automatic insurance and retirement application
- Section 3 provides that eligible persons are automatically insured under this Act.
- Section 3 allows retirement pension only upon the employee’s own volition application for pension status.
- Section 3 requires the application to be filed to the Director of Education, advising intent to retire at least three months prior to the effective retirement date.
- Section 3 requires the employee to continue rendering service until the close of a school year, unless retired at the expiration of accrued leave with pay (or for reasons of unfitness for service).
- Section 3 empowers the Director of Education to require continued service until the employee can be relieved, while keeping the retirement effective date not later than six months after the requested date.
Annuity amounts by length of service
- Section 2 provides that annuities are computed as a fractional part of the average pay, salary, or compensation for the three years of service prior to pension grant.
- Section 2 caps the “maximum average pay, salary or compensation” used in computation at no case exceeding PHP 4,000 per annum.
- Section 2 sets the annual annuity at 4/10 of the average salary for twenty years of service.
- Section 2 sets the annual annuity at 5/10 of the average salary for twenty-three years of service.
- Section 2 sets the annual annuity at 6/10 of the average salary for twenty-six years of service.
- Section 2 sets the annual annuity at 7/10 of the average salary for twenty-nine years of service.
- Section 2 sets the annual annuity at 8/10 of the average salary for thirty-two or more years of service.
Disability retirement and pension limits
- Section 4 provides that an employee covered by this Act with not less than fifteen years of service may be retired for unfitness for service due to total physical or mental disability.
- Section 4 allows retirement upon the employee’s own application approved by the Director of Education or upon the request of the Director of Education.
- Section 4 requires disability to be for useful and efficient service regardless of age.
- Section 4 bars disability pension if the disability is due to vicious habits, intemperance, or wilful misconduct.
- Section 4 requires certification of unfitness by both the Director of Education and a government health officer.
- Section 4 requires the pensioner to present himself personally during January and July of each calendar year to a public health officer during receipt of the disability pension to determine fitness to return to service and to cease the pension benefit.
- Section 4 limits disability pension to no longer than ten years and provides that it ceases when the employee:
- returns to service, or
- neglects to return when requested, or
- engages in another gainful occupation with compensation equal to the amount of pension.
- Section 4 provides that if an annuity is discontinued for causes other than death or return to service before the annuitant has received a sum equal to total contributions with accrued interest, the difference is paid to the retired employee upon application, in the form and manner the Pension and Investment Board directs.
Survivor benefits for death
- Section 5 provides that upon death of an employee entitled to this Act who is rendering service at death or who is retired on pension, 50% of the pension the employee would be entitled to if alive is paid.
- Section 5 limits beneficiaries to:
- surviving acknowledged children of the employee’s issue for not to exceed ten years, or
- the surviving lawful husband or wife if there are no children eligible under the Act.
- Section 5 bars pension payments to children over eighteen years of age or to married children.
- Section 5 bars pension payments to a remarried surviving wife or husband.
Creditable service and excluded periods
- Section 6 provides that all employees eligible receive full credit for service rendered in the Philippine public school system prior to the date this Act becomes operative.
- Section 6 states that the “date of the first day of service” is the date such service first began.
- Section 6 provides that continuity of service is not required for computing length of service, except for the last three years prior to granting the pension.
- Section 7 excludes, in computing length of service, all periods of separation and so much of any leave as is without pay.
- Section 7 excludes from that computation the regular school vacation periods for classroom teachers with temporary civil service status.
Government contributions and fund investment
- Section 8 requires that beginning on the first day of the fiscal year following approval and annually thereafter, the total sums appropriated for or pay compensation for employees covered by this Act must include a sum equal to 3% of the total sums for pay or compensation made by Insular, provincial, or municipal legislation.
- Section 8 directs the sum to be transferred by the Insular Treasurer to a special fund called the “Teachers Retirement and Disability Fund.”
- Section 8 appropriates this fund for payment of annuities, allowances, and expenses under this Act, and for investment by the Pension and Investment Board.
- Section 8 directs the Pension and Investment Board to invest, from time to time, in interest-bearing securities of the government of the Philippine Islands or of the United States of America such portion of the fund that cannot be immediately required for paying annuities and related expenses.
Supplemental sources of fund money
- Section 9 authorizes the Insular Treasurer to supplement direct government contributions with moneys resulting from:
- fines,
- leaves of absence without pay,
- unfilled positions, and
- other salary savings for positions whose holders are or will be entitled to this Act.
- Section 9 authorizes supplementation by donations, gifts, legacies, or bequeathes from individuals, corporations, or organizations.
Employee deductions and fund transfer
- Section 10 requires that beginning on the first day of the third month next following approval and monthly thereafter, there shall be deducted and withheld from each covered employee’s monthly basic salary, pay, or compensation a sum equal to 3%.
- Section 10 requires the Insular Treasurer to cause deductions to be withheld from:
- specific appropriations for the particular salaries or compensations, and
- allotments out of lump sum appropriations for payment of those salaries or compensations for each fiscal year.
- Section 10 directs the sums to be transferred to the credit of the “Teachers Pension and Disability Fund” created in this Act.
Return of contributions on separation
- Section 11 requires that if an employee covered by this Act becomes absolutely separated from service by death or otherwise before becoming eligible for retirement on an annuity, the total amount of deductions of salary, pay, or compensation with accrued interest is returned upon application.
- Section 11 sets the interest at 4% per annum, compounded on June 30 of each fiscal year.
- Section 11 provides a death rule: if there has been no demand upon the Director of Education or the Insular Treasurer by a duly appointed executor or administrator, payment is made after the expiration of three months from date of death to persons appearing entitled to estate proceeds.
- Section 11 provides that the payment described for death under the above rule may be a bar to recovery by another person.
Pension and Investment Board governance
- Section 12 creates a “Pension and Investment Board” to enforce this Act.
- Section 12 provides the Board’s composition as:
- the Secretary of Public Instruction (chairman, ex-officio),
- the Director of Education,
- the Insular Treasurer,
- the Insular Auditor, and
- three persons appointed by the Governor-General, two of whom must be persons entitled to benefits under this Act.
- Section 12 requires the Board, during July of each fiscal year, to submit to the Governor-General a report of operations under the Act.
- Section 12 requires the Board to recommend to the Governor-General the inclusion in the Insular budget for the following fiscal year a sufficient sum to pay retirement allowances and expenses whenever funds available under Sections 8, 9, and 10 are insufficient.
Payment schedule and pension adjustments
- Section 13 requires that pensions are paid in quarterly installments on January 1, April 1, July 1, and October 1 of every fiscal year.
- Section 13 directs payment by government warrant or other means that ensure safe delivery and no reduction in pension for exchange or transmitting.
- Section 13 requires deduction of amounts from pensions if a recipient already receives lifelong annual pensions from the Philippine Government or any branch of the United States Federal Government.
- Section 13 suspends pension for periods of reemployment in government service with compensation equal to or greater than 50% of the pension received under this Act.
- Section 13 requires the Director of Education to keep all records of manipulations of the Teachers Pension and Disability Fund and all accounts of disbursements from the same, under the supervision of the Pension and Investment Board.
- Section 13 defines “basic salary, pay or compensation” as excluding the operation of Act Numbered 2509, and excluding all bonus, allowances, overtime pay, or other compensation given in addition to basic pay or other compensation fixed by law or regulation.
Compulsory retirement age
- Section 14 provides compulsory retirement at age 65 for eligible teachers who have attained age 65 or will attain that age.
- Section 14 requires that the teacher has rendered 18 years or more of service computed under the Act.
- Section 14 allows remaining in service only if the teacher requests it and the Director of Education specifically recommends favorable action.
Repeal and effectivity
- Section 15 repeals all acts and parts of acts inconsistent with this Act.
- Section 16 provides that the Act takes effect on approval.
- The Act is Approved, March 10, 1922.