Government Service Insurance Law

Created to promote efficiency and welfare of government employees.
Replaces former pension systems under Acts Nos. 1638, 3350, and 3173.
Transfers all related personnel, assets, contracts, and records of previous pension funds to GSIS.
Administered by the Government Service Insurance Board in accordance with this Act.

Regular membership is compulsory for:
- Regular, permanent government employees of the Commonwealth and National Assembly.
- Judiciary members.
- Officers and enlisted men of the Regular Force, Philippine Army.
- Employees of Metropolitan Water District and other government boards/agencies, except University of the Philippines and government-owned/controlled business corporations.
- Employees under Act No. 3350, excluding temporary replacements for teachers.
Local governments and government corporations may opt into membership, making it compulsory for their permanent employees.
Exclusions: U.S. Army/Navy personnel detailed to the Philippines and non-citizens.

Deduction of 3% from the monthly salary of each member, 5% for Regular Force, Philippine Army personnel, starting six months after the Act's effect or date of appointment.
Members with prior pension credits have deductions adjusted by the Board.
Members may pay premiums in advance or directly to the System if no longer in government service.
All payments credited to the individual's account.

Starting 1937, the government contributes 3% of members' basic salaries plus extra premiums for hazardous occupations, except for Regular Force, Philippine Army officers/enlisted men.
Government contributions cease upon policy maturity unless a new policy is purchased.
Contributions transferred when members transfer between government branches/agencies.
Local governments and government corporations that join the System must appropriate equivalent contributions for their employees.

The Board is authorized to accept donations, gifts, legacies, and invest such moneys to supplement member contributions.

Officers and enlisted men of the Regular Force automatically insured with policy premiums at 5% of their annual basic salary.
Regular government employees insured with policies with premiums amounting to 6% of their annual basic salary.
Increases in contributions increase insurance face value, adjusted based on policy conditions.

Dismissal for cause results in forfeiture of benefits, with half the cash surrender value paid to the member or beneficiary.
Other separations allow options:
- Collect cash surrender value.
- Continue policy with full premium payment.
- Obtain paid-up or extended term insurance.
- Other options per policy provisions.

Members may apply for additional life insurance up to half their annual salary in multiples of 100 pesos.
Full premiums on additional insurance paid by member; deductions from salary possible with consent.

Policies are assignable to the System.
Members entitled to participate in surplus distributions.
Policies remain in force as long as terms are met, regardless of employment status.
Policies and proceeds are tax-exempt.

Insurance Commissioner must approve policy forms before issuance.
Policies must incorporate provisions from applicable insurance laws, with exceptions for annuities/endowments.

Board composed of five members appointed by the President with Assembly consent; three members must be System members.
Board elects a Chairman and Vice-Chairman.
Terms staggered initially; successors serve three-year terms.
Members compensated not exceeding 10,000 pesos; per diem capped at 20 pesos.
Board under the Secretary of Finance's administrative supervision.

Board has corporate powers, may sue and be sued.
Can adopt rules, budgets, and appropriations with Secretary of Finance approval.
Prescribes insurance forms, premium rates, and conditions considering health, occupation, age.
Compulsory membership insurance applies to all without medical examination.
Board members must abstain in cases of conflict of interest, except for loans on personal policies.

Board may appoint technical assistants and personnel with approval from Secretary of Finance.
Staffing subject to Civil Service rules.

Board keeps actuarial, operational, and financial records necessary for policy valuation.
Annual report submitted to Secretary of Finance, President, and National Assembly.
Synopsis of the report posted in government offices.

Auditor General serves as ex officio auditor; Secretary of Justice as legal adviser.
Annual audited financial statements required.
Actuary performs annual actuarial studies.

Board invests funds not needed for immediate obligations in:
- Government bonds of Philippines or U.S.
- Deposits in designated banks with sufficient capital.
- First liens on improved, unencumbered real estate in specified cities.
- Commutation of installment payments from the government.
- Loans to local governments and the Insular Government under prescribed conditions.
- Loans to members secured by policies (up to 50% of cash value).
Maximum 70% of assets may be invested in real estate loans.
Loans are subject to terms regarding amount, period, interest, and repayment assurances.

Board may require increased security if asset values fall.
Failure to comply within 90 days may lead to foreclosure.
Properties must be insured.
Real estate acquired by Board must be sold within five years unless necessary for System operations.

Surplus from investments and mortality savings, after obligations and reserves, is distributed annually to members per approved actuarial schedules.

Insurance policies and proceeds (up to premium amounts exceeding 500 pesos annually) are exempt from attachment, garnishment, or seizure for debts.
Proceeds not payable to named beneficiaries are excluded from the member's estate for debt payment.

Annual appropriations cover government contributions except for the Philippine Army’s Regular Force premiums funded by separate Army appropriations.
Extra premiums due to hazards are included.
Special funds may be used for government contributions for employees paid from such funds.
Initial appropriations include 200,000 pesos for System establishment and operation expenses.

GSIS is exempt from provisions of Acts 2427 and 2833 and from laws enacted thereafter unless expressly stated.