Law Summary
Preference in Retirement or Separation
- Department Head must prioritize retirement/separation of those unfit due to age, mental, or physical incapacity
- Governor-General appointees require Governor-General approval for retirement
Gratuity Calculation and Payment
- Based on highest basic salary received during service
- Paid monthly at 33⅓% of monthly salary except those entitled to one month or less, paid immediately
- Secretary of the Interior may approve selling, transferring, or ceding gratuity rights to investment funds or banks
- Gratuity payments are exempt from attachment or execution
Choice Between Gratuity and Other Pension Benefits
- Retiring employees entitled to other pension benefits (e.g., Teachers' Retirement, Philippine Health Service) may choose between those benefits or gratuity under this Act
- Cannot receive benefits under more than one law
- Choosing special pension entails retirement under that law; choosing gratuity requires refunding contributions made to other pension funds
Payment of Gratuity Upon Death
- Unpaid gratuity or balance due upon death paid to legitimate heirs
- If gratuity rights sold or discounted, payments go to the investment fund or bank holding the rights
Reappointment and Waiver of Future Gratuities
- Reappointed persons waive future gratuity claims
- Those who discounted gratuity must refund unexpired portion upon reappointment
Abolition of Vacated Positions
- Positions vacated by retirement or separation under this Act considered abolished automatically
- Exceptions for Police and Fire Department members retiring at age 60
- Salaries for refilled Police/Fire positions capped at two-thirds of former incumbent’s salary
Limitations on Applicability
- Voluntary resignation due to reduced pay (less than 30%) or transfers do not entitle to gratuity
- Abolition of double compensation or other causes not covered do not grant benefits
Appropriation of Funds
- City of Manila municipal board to appropriate necessary funds from unappropriated City Treasury funds
Effectivity
- The Act took effect upon approval on November 14, 1935