Law Summary
Objectives of the Policy and Procedural Guidelines
- Ensure uniform interpretation and application of the policy for reclassified members.
- Clarify entitlements concerning consolidated and policy loans, retirement, and separation benefits for special members.
- Remedy situations of incorrect classification and premium remittance.
Definitions
- Regular Members: Employees required to remit both life and retirement premiums with their government agency.
- Special Members: Employees covered by separate retirement schemes per the Constitution or special law, recognized by the Department of Budget and Management (DBM).
Coverage of Special Membership
- Special membership applies to positions/agencies recognized by DBM as having separate retirement schemes.
- Employees in agencies with separate retirement arrangements recognized by DBM and appropriated by law qualify as special members.
Effectivity of Reclassification
- Reclassification to special membership takes effect:
- On the law’s effectivity providing the agency’s separate pension scheme.
- Upon transfer to a qualifying agency.
- Upon appointment to a position entitled to separate pension under law.
- Regular membership ends the day before reclassification.
- Special members receive a new life insurance policy with specific endowment plans based on age.
- Premium remittance for special members covers life insurance only (3% personal, 3% government share).
- Special members retain life insurance benefits; eligibility to loans depends on agency agreements.
- GSIS returns any excess retirement premiums deducted during special membership period.
- Special members and beneficiaries entitled to Employees' Compensation benefits for work-related contingencies.
Loan Privileges for Special Members
- Consolidated Loans (ConsoLoan) available only if agency has special GSIS agreement, up to ten months’ salary based on life insurance premiums.
- Policy loans allowed on compulsory life insurance policies plus optional policies, subject to terms.
- Outstanding loan balances from regular membership deducted from insurance surrender or maturity values.
- Loans (except housing) may be pre-terminated by full payment before term.
- Housing loans continue via payroll or post-dated checks; default accounts handled by separate collection.
- Collection of due loans via deductions from loans, benefits, and redemption insurance; no loan cancellation after disbursement.
- Default arises after six months unpaid; policies on in-default accounts apply.
- GSIS may recover amounts credited due to fraud or error.
- Overpayments at loan term end are refunded per GSIS policies.
Claims Processing and Entitlements
- Reclassification does not automatically grant separation or retirement benefits; actual separation is required.
- Benefits are based solely on service during regular membership.
- Retirement benefits granted to members meeting GSIS retirement rules during regular membership.
- Separation benefits apply if less than retirement requirements but at least 3 years service during regular membership, with cash payment schedules dependent on years of service and age.
- Claims require formal application; outstanding loans deducted from benefits.
- Unpaid loan balances may be collected via DBM.
- Pension benefits continue despite re-employment as a special member.
- Special members entitled to funeral benefits upon death while in service.
- Survivorship benefits apply to primary beneficiaries of deceased special members meeting specified criteria.
- Life insurance benefits payable subject to claim and deduction of loan balances.
- Disability benefits apply for disabilities occurring before special membership’s effectivity.
Treatment of Misclassified Members Remitting Special Member Premiums
- Employees erroneously remitting only special member premiums but not covered by law are reclassified as regular members.
- Full regular premiums (9% member, 12% agency comprising life insurance and retirement) must be paid.
- Employers must remit correct monthly contributions plus interest for prior underpayments.
Additional Provisions
- Special members with less than 3 years regular membership receive only life insurance benefits with policies in force at least one year; retirement premiums non-refundable.
- Claims (excluding life and retirement) prescribe after 4 years from contingency.
- Optional life insurance plans may continue to be paid for by special members after termination of regular membership.
Information Dissemination and System Support
- Corporate Communications Office responsible for policy dissemination.
- IT Support Group tasked with necessary technological enhancements.
Manual of Operations and Implementation
- Functional groups must update operational procedures accordingly.
- Policy effective immediately upon Board approval.