GSIS Act Amendments and Benefits Expansion

Key definitions and core concepts

Section 2(a) defines GSIS as the Government Service Insurance System created by Commonwealth Act No. 186.
Section 2(b) defines Board as the Board of Trustees of the Government Service Insurance System.
Section 2(c) defines Employer to include the national government, its political subdivisions, branches, agencies or instrumentalities, including government-owned or controlled corporations, and financial institutions with original charters, and including the constitutional commissions and the judiciary.
Section 2(d) defines Employee or Member as any person receiving compensation while in the service of an Employer, by election or appointment, regardless of appointment status, including barangay and sanggunian officials.
Section 2(e) defines Active Member as a member not separated from the service.
Section 2(f) defines Dependents as: (a) the legitimate spouse dependent for support; (b) the legitimate, legitimated, legally adopted child, including the illegitimate child, who is unmarried, not gainfully employed, and not over the age of majority or is over the age of majority but incapacitated and incapable of 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.
Section 2(g) defines Primary beneficiaries as the legal dependent spouse until remarriage and the dependent children.
Section 2(i) defines Compensation as the basic pay or salary received pursuant to election/appointment, excluding per diems, bonuses, overtime pay, honoraria, allowances, and any other emoluments received in addition to basic pay that are not integrated into basic pay under existing laws.
Section 2(k) defines Current Daily Compensation as 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.
Section 2(l) defines Average Monthly Compensation (AMC) as the quotient of aggregate compensation during the last thirty-six (36) months preceding separation/retirement/disability/death divided by thirty-six (36), or by fewer months if less than thirty-six (36) months.
Section 2(l) sets AMC limits and premium rates through Board rules and an initial ceiling: average monthly compensation initially shall not exceed Ten thousand pesos (P10,000.00), with premium rates initially 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 compensation above the AMC limit.
Section 2(m) defines Revalued average monthly compensation as: 170% of the first One thousand pesos (P1,000.00) of AMC plus 100% of AMC in excess of One thousand pesos (P1,000.00).
Section 2(n) defines Lump sum as the basic monthly pension multiplied by sixty (60).
Section 2(o) defines Pensioner as a person receiving old-age or permanent total disability pension, or a person who has received the lump sum excluding one receiving survivorship pension benefits as defined in Section 20.
Section 2(p) defines Gainful Occupation as a productive activity providing income at least equal to the minimum compensation of government employees.

Membership coverage and GSIS obligations

Section 3 makes membership in the GSIS compulsory for all employees receiving compensation who have not reached the compulsory retirement age, regardless of employment status.
Section 3 excludes members of the Armed Forces of the Philippines and the Philippine National Police, but requires that those excluded must settle first their financial obligation with the GSIS.
Section 3 limits the exception for “contractual who have no employer and employee relationship with the agencies they serve” by stating they are not covered unless they fall within that exception.
Section 3 mandates life insurance, retirement, and social security protection (including disability, survivorship, separation, and unemployment benefits) for all GSIS members except members of the judiciary and constitutional commissions, who receive life insurance only.
Section 4 provides that a member separated from the service continues to be a member and is entitled to benefits he qualified for when a contingency compensable under the Act occurs.

Contributions, remittance, and delay charges

Section 5(a) requires mandatory monthly contributions by both member and employer according to the schedule:
- AMC Limit and Below: Member 9.0% and Employer 12.0%.
- Over the AMC Limit:
  - Up to the Maximum AMC Limit: Member 9.0% and Employer 12.0%.
  - In Excess of the AMC Limit: Member 9.0% and Employer 12.0%.
Section 5(a) requires judiciary and constitutional commissioners to pay three percent (3%) of their monthly compensation as personal share, and their employers to pay a corresponding three percent (3%) share for their life insurance coverage.
Section 5(b) requires the employer to include in its annual appropriation the necessary amounts for its contribution share plus additional premiums required due to hazards or risks.
Section 5(c) requires all employers to include contribution payments in annual appropriations and imposes penal sanctions on employers who fail to include payment in annual appropriations or fail to remit the accurate/exact contributions on time, or delay remittance of premium contributions.
Section 5(c) imposes administrative liability on heads of offices and agencies for non-remittance or delayed remittance of premium contributions.
Section 6(a) requires employers to report to the GSIS the names of all employees, employment status, positions, salaries, and other pertinent information required by the GSIS, including subsequent changes.
Section 6(a) requires employers to deduct each month from each employee’s compensation the member contribution payable under the rules.
Section 6(b) requires remittance of both employee and employer contributions directly to the GSIS within the first ten (10) days of the calendar month following the month to which contributions apply.
Section 6(b) gives remittance of GSIS contributions priority over all obligations, except salaries and wages of employees.
Section 7 charges agencies that delay remittance of GSIS monies interests not less than two percent (2%) simple interest per month, to be paid by the employers concerned, with the Board prescribing interest rates as may be prescribed.

Benefit computations and entitlements

Section 9(a) sets the basic monthly pension equal to:
1. thirty-seven and one-half percent (37.5%) of revalued average monthly compensation; plus
2. two and one-half percent (2.5%) of revalued average monthly compensation for each year of service in excess of fifteen (15) years,
  with the basic monthly pension not exceeding ninety percent (90%) of average monthly compensation.
Section 9(b) authorizes periodic adjustment of monthly pensions upon recommendation of the President and General Manager and approval by the President, with a minimum basic monthly pension of One thousand and three hundred pesos (P1,300.00).
Section 9(b) requires that for those who rendered at least twenty (20) years of service after effectivity, the basic monthly pension shall not be less than Two thousand four hundred pesos (P2,400.00) a month.
Section 10(a) provides that service for benefit computation covers from date of original appointment/election, including service under different employers, authorized overseas service, and periods prescribed by the GSIS in coordination with the Civil Service Commission.
Section 10(b) requires exclusion from service computation of credited periods for which corresponding benefits were awarded under this Act or other laws when reinstatement and subsequent separation occur with a later retirement or separation compensable under this Act.
Section 10(b) defines service as full-time service with compensation, while part-time and other services with compensation are included under rules that the GSIS prescribes.
Section 11(a) sets separation benefits as a cash payment equal to 100% of average monthly compensation for each year of service paid contributions, but not less than Twelve thousand pesos (P12,000.00), payable upon reaching sixty (60) years of age or upon separation, whichever comes later, with the condition that the member resigns or separates after at least three (3) years but less than fifteen (15) years of service.
Section 11(b) sets an alternative separation benefit: cash payment equal to eighteen (18) times basic monthly pension at time of resignation or separation, plus an old-age pension equal to basic monthly pension payable monthly for life upon reaching age sixty (60), applicable when the member resigns or separates after at least fifteen (15) years of service and is below sixty (60) years at separation.
Section 12 provides unemployment benefits as monthly cash payments equal to 50% of average monthly compensation for a permanent employee involuntarily separated due to abolition of office or position from reorganization, provided the employee has been paying integrated contributions for at least one (1) year prior to separation.
Section 12 provides unemployment 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
Section 12 requires the first unemployment payment to be equivalent to two (2) monthly benefits, with a seven-day (7) waiting period imposed on succeeding monthly payments.
Section 12 provides that all accumulated unemployment benefits paid throughout membership are deducted from voluntary separation benefits.
Section 13(a) provides retirement benefits as either:
1. the lump sum payable at retirement plus an old-age pension equal to basic monthly pension payable monthly for life starting upon expiration of the five-year (5) guaranteed period covered by the lump sum; or
2. a cash payment equal to eighteen (18) months of basic monthly pension plus monthly pension for life payable immediately with no five-year (5) guarantee.
Section 13(b) mandates compulsory retirement at sixty-five (65) years of age for employees with at least fifteen (15) years of service, unless service is extended under existing civil service rules.
Section 13-A conditions retirement benefit entitlement on: at least fifteen (15) years of service; at least sixty (60) years of age at retirement; and not receiving a monthly pension benefit for permanent total disability.
Section 14 requires periodic pension adjustment for all pensioners, including survivorship pension beneficiaries, upon recommendation of the GSIS actuary and approval by the Board under GSIS rules and regulations.
Section 15 provides entitlement to permanent disability benefits for members suffering permanent disability for reasons not due to grave misconduct, notorious negligence, habitual intoxication, or willful intention to kill himself or another, subject to Sections 16 and 17 conditions.
Section 16(a) provides that total permanent disability grants a monthly income benefit for life equal to basic monthly pension effective from date of disability if the member is in the service at disability, or if separated 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 disability.
Section 16(a) requires that if at disability the member was in the service and paid at least one hundred eighty (180) monthly contributions, the member receives in addition to monthly income benefit a cash payment equal to eighteen (18) times basic monthly pension.
Section 16(a) bars enjoyment of monthly income benefit for permanent disability and old-age retirement simultaneously.
Section 16(b) provides cash advancement if conditions in Section 16(a)(1) and (2) are not satisfied but there is at least three (3) years service at disability: cash payment equal to 100% of average monthly compensation for each year of service paid contributions, but not less than Twelve thousand pesos (P12,000.00), which should have been the separation benefit.
Section 16(c) mandates suspension of disability benefit when the member is reemployed, recovers as determined by the GSIS with a final and binding decision, or fails to present himself for medical examination when required.
Section 16(d) deems certain conditions total and permanent disabilities, including complete loss of sight of both eyes; loss of two limbs at or above the ankle or wrist; permanent complete paralysis of two limbs; brain injury resulting in incurable imbecility or insanity; and other cases determined by the GSIS.
Section 17(a) provides that permanent partial disability grants a cash payment in accordance with a GSIS-prescribed schedule, provided the member satisfies either Section 16(a)(1) or Section 16(a)(2) conditions.
Section 17(b) deems certain disabilities permanent partial, including complete and permanent loss of the use of specified fingers, toes, limbs, hands, feet, legs, ears, hearing of one or both ears, and sight of one eye; and other cases determined by the GSIS.
Section 18(a) provides temporary total disability benefits of seventy-five percent (75%) of current daily compensation for each day or fraction thereof for each temporary disability benefit day, not exceeding one hundred twenty (120) days in one calendar year, after exhausting sick leave credits and collective bargaining agreement sick leave benefits if any, and not earlier than the fourth day of temporary total disability.
Section 18(a) conditions entitlement if in the service at the time of disability, or if separated with at least three (3) years of service and at least six (6) monthly contributions in the twelve-month period immediately preceding disability.
Section 18(a) prohibits enjoying temporary total disability benefit and sick leave pay simultaneously.
Section 18(a) allows extension beyond one hundred twenty (120) days if disability requires more extensive treatment, but not exceeding total two hundred forty (240) days.
Section 18(b) requires temporary total disability benefit shall not be less than Seventy pesos (P70.00) a day.
Section 18(c) directs that rules prescribe notices, mode of payment, and other requirements.
Section 19 requires that for non-scheduled disabilities not listed in the schedule of partial/total disability, the GSIS determines the nature of disability and corresponding benefits.
Section 20 provides survivorship pension upon death of a member or pensioner, consisting of: (1) basic survivorship pension equal to 50% of basic monthly pension; and (2) dependent children's pension not exceeding 50% of the basic monthly pension.
Section 21(a) governs death of a member and grants primary beneficiaries survivorship pension if the deceased was in service at death or if separated with at least three (3) years of service and qualifying contributions as specified, and also grants cash payments of 100% of average monthly compensation per year of service paid contributions, subject to stated conditions and minimum cash of Twelve thousand pesos (P12,000.00) where applicable.
Section 21(b) requires payment of survivorship pension based on survivor category: spouse only for life or until remarriage; children only for as long as qualified plus children’s pension of 10% of basic monthly pension for each dependent child not exceeding five (5), counted from youngest and without substitution; or spouse and children together with spouse’s pension for life/until remarriage and children receiving dependent children’s pension.
Section 21(c) provides that in the absence of primary beneficiaries, secondary beneficiaries receive cash payment equivalent to 100% of average monthly compensation for each year of service paid contributions but not less than Twelve thousand pesos (P12,000.00), provided the member was in service at death and has at least three (3) years of service; otherwise, in the absence of secondary beneficiaries, benefits are paid to legal heirs.
Section 21(d) includes legally adopted and legitimated children within “legitimate children” for survivorship benefits.
Section 22 governs death of a pensioner and requires survivorship pension to be paid under Section 20, subject to Section 21(b); if death occurs within the lump sum period, survivorship pension is paid only after expiration of the lump sum period.

Funeral benefits, life insurance, and optional coverage

Section 23 provides funeral benefit amounts determined by the GSIS in rules and regulations but not less than Twelve thousand pesos (P12,000.00).
Section 23 requires increase to at least Eighteen thousand pesos (P18,000.00) after five (5) years.
Section 23 makes funeral benefit payable upon death of an active member; a member separated but who may be entitled to future benefit under Section 4; a pensioner; or a retiree who at retirement was of pensionable age under this Act but opted to retire under Republic Act No. 1616.
Section 24 mandates compulsory life insurance coverage for all employees except AFP and PNP, under terms and conditions promulgated by the GSIS, with automatic effect:
- For those employed after effectivity, coverage takes effect on the date of employment.
- For those whose insurance matures after effectivity, insurance is deemed renewed on the day following maturity or expiry.
- For those without any life insurance as of effectivity, insurance takes effect following effectivity.
Section 25 authorizes an annual dividend for members whose life insurance has been in force for at least one (1) year, using a dividend allocation formula determined by the GSIS.
Section 26 allows members to apply for optional insurance and/or pre-need coverage for life, health, hospitalization, education, memorial plans, and other plans designed by the GSIS, for themselves and/or dependents, and allows employers to apply for group insurance coverage.
Section 26 permits payment of premiums/installments for optional insurance and pre-need products by the insured, the employer, and/or any person acceptable to the GSIS.

Claims, disputes, and enforcement

Section 28 provides that claims for benefits under the Act except for life and retirement prescribe after four (4) years from the date of contingency.
Section 29 directs the GSIS to prescribe rules to facilitate payment of benefits and claims, and provides that payments made prior to receipt of an adverse claim to a beneficiary subsequently found not entitled do not bar the rightful recipient’s right to demand payment; the GSIS may seek relief against the ineligible recipient in court.
Section 30 vests in the GSIS original and exclusive jurisdiction to settle any dispute arising under this Act and other laws administered by the GSIS.
Section 30 authorizes the Board to designate a Board member or a GSIS lawyer-official as hearing officer to receive evidence, make findings of fact, and submit recommendations.
Section 30 imposes timelines: the hearing officer submits findings and recommendations (with documentary and testimonial evidence) within thirty (30) working days after parties close evidence and file the last pleading; the Board decides within thirty (30) days from receipt of findings and recommendations; and cases heard directly by the Board are decided within thirty (30) working days from submission for decision.
Section 31 governs appeals from Board decisions or awards by applying Rules 43 and 45 of the 1997 Rules of Civil Procedure adopted on April 8, 1997, effective July 1, 1997, with pending cases governed by applicable prior procedural rules.
Section 31 requires that appeals take precedence over all other cases except criminal cases where the penalty of life imprisonment or death or reclusion perpetua is imposable.
Section 31 provides that appeal does not stay execution of the Board order/award unless ordered by the Board, the Court of Appeals, or the Supreme Court, and the appeal is without prejudice to a special civil action of certiorari when proper.
Section 32 provides that when no appeal is perfected and no stay order exists, the Board’s decision/award is enforced like a Regional Trial Court decision, and the Board may issue writs of execution through the city or provincial sheriff.
Section 32 makes a person who fails or refuses to comply after being required subject to contempt upon GSIS application.
Section 33 authorizes GSIS officials or employees, when authorized by the Board, to administer oaths, take depositions, certify official acts, and issue subpoenas to compel attendance and production of records; contumacy is handled under Section 580 of the Revised Administrative Code.

Funds, investment limits, and reporting

Section 34 establishes that all contributions payable under Section 5 plus earnings and accruals constitute the GSIS Social Insurance Fund, used to finance benefits administered under the Act.
Section 34 requires the GSIS to administer additional funds including: the optional insurance fund for Section 26 coverages; the employees’ Compensation Insurance Fund created under P.D. 626 as amended; the General Insurance Fund created under Act No. 656 as amended; and other special funds for special groups or persons rendering services to government.
Section 34 requires the GSIS to maintain required reserves to guarantee fulfillment of its obligations under the Act.
Section 34 limits use of GSIS funds to purposes provided by the Act and bars accrual of funds or income to the General Fund of the national government and its political subdivisions and agencies, including GOCCs, except as allowed under the Act.
Section 35 allows disbursement of a maximum expense loading of twelve percent (12%) of yearly revenues from all sources for administrative and operational expenses, except as may be otherwise approved by the President based on actuarial and management studies.
Section 36 allows investment of GSIS funds not needed for current obligations under Board-prescribed rules and conditions, requiring liquidity, safety/security, and yield to ensure actuarial solvency.
Section 36 requires annual reporting of all investments to both Houses of Congress, covering categories including government bonds or securities; designated domestic bank deposits/securities under limits based on unimpaired capital and surplus or total private deposits; housing loans and group housing projects with a priority to low income groups and required allocation of at least forty percent (40%) of the investable fund of the GSIS Social Insurance Fund for these purposes; and various types of loans, securities, real estate, mutual funds, and foreign-currency instruments meeting listing and profitability conditions.
Section 37 requires GSIS to keep actuarial-study records and maintain books of accounts to record assets, liabilities, income, expenses, receipts and disbursements, and other financial transactions and operations.
Section 38 requires periodic actuarial examination and valuation in accordance with accepted actuarial principles.
Section 39 declares State policy to preserve actuarial solvency by keeping contribution rates as low as possible, and grants sweeping tax and process exemptions for the GSIS, its assets, revenues and accruals, and benefits paid, continuing unless expressly and specifically revoked.

Exemptions from taxes and legal processes

Section 39 exempts the GSIS, its assets, revenues including accruals thereto, and benefits paid from all taxes, assessments, fees, charges, or duties of all kinds.
Section 39 provides that these exemptions continue unless expressly and specifically revoked.
Section 39 deems assessments against the GSIS as of approval of the Act considered paid.
Section 39 provides that contrary laws, ordinances, regulations, issuances, opinions, or jurisprudence are deemed repealed, superseded, and rendered ineffective and without legal force and effect for the exemption regime.
Section 39 protects exemption from subsequent laws to the contrary unless expressly, specifically, and categorically revoked or repealed and a law substitutes or replaces the exemption to maintain or protect solvency.
Section 39 exempts GSIS funds, properties, and the benefits, sums, or monies corresponding to benefits under this Act from attachment, garnishment, execution, levy, or other processes of courts, quasi-judicial agencies, and administrative bodies, including Commission on Audit (COA) disallowances.
Section 39 exempts such funds/benefits from financial obligations of members, including pecuniary accountability arising from official functions or duties or incurred relative to or in connection with position or work, except when monetary liability (contractual or otherwise) is in favor of the GSIS.

Administration, governance, and GSIS powers

Section 40 establishes the GSIS (created under Commonwealth Act No. 186) as the implementing body for the Act.
Section 41 grants the GSIS broad powers, including to formulate rules and regulations; adopt budgets and authorize expenditures; invest funds; acquire and dispose of property; conduct actuarial studies and re-adjust benefits/contributions/premium rates/interest rates and allocation of funds; sue and be sued; enter into contracts; maintain offices and branches subject to membership thresholds; and borrow funds only as incident to securitization of housing mortgages and receivables.
Section 41 requires the GSIS to maintain a branch office in every province with a minimum of fifteen thousand (15,000) membership.
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