University of Baguio

School of Law

SOCIAL LEGISLATION:

The Government Service Insurance

System Act of 1997
(PRESIDENTIAL DECREE NO. 1146, as amended by
RA 8291)

(GROUP 7 REPORT)

SUBMITTED TO:

ATTY. CHERRY DANE FARIÑAS-AGUSTIN

 The Government Service Insurance System Act of 1997

(PRESIDENTIAL DECREE NO. 1146, as amended by RA 8291)

The Government Service Insurance System (GSIS) is mandated to provide

government employees benefits that will ensure their social welfare, and to provide
assistance in their financial needs in life. The law aims to provide safeguards in case
contingencies in life happen to GSIS members. The GSIS is the counterpart
of SSS with regard to government employees. R.A. No. 8291 provides similar benefits
to government employees equivalent to benefits provided to private employees
by R.A. No. 11199 or the New Social Security Law.

I. GSIS MISSION, VISION, AND CORE VALUES:

Vision:
By 2022, GSIS, a premier social insurance institution with a passion for providing
excellent service to its members, pensioners, and other constituents, will be in the
top three defined-benefit pension fund institutions in the ASEAN region.

Mission:
GSIS is committed to provide social security and financial benefits to all government
employees and their qualified dependents, satisfy the non-life insurance needs of
the government, maintain and strengthen the viability of the fund, and build an
enduring partnership with its stakeholders.

Core Values:
Professionalism
Love of Country
Integrity
Service Excellence
Spirituality
Innovation
Teamwork
Mutual Respect

Quality Policy:
In the Government Service Insurance System, we are committed to provide quality
service to our members, pensioners and other constituents for all their social
security benefits and non-life insurance needs.

The design of our QMS shall consider the context and strategic direction of our
organization. Our systems and processes shall be regularly evaluated and improved
for effectiveness, efficiency, and compliance with legal and other regulatory
requirements.

We will invest in the competence of our people through continued professional

development.

II. Laws and Statutes in Relation to GSIS (History):

COMMONWEALTH ACT NO. 186

The GSIS is created as a social insurance fund for all employees of the Philippine
government.

RA 660
A retirement option of the GSIS which is also known as the “Magic 87”.

RA 1616
A retirement option of the GSIS popularly known as “The Take All” Option.

RA 3593
Amended Commonwealth Act No. 186 to provide immediate life insurance coverage
and compulsory membership as well as increase additional life insurance coverage to
all government employees.
RA 4968
Amended again Commonwealth Act No. 186 to further define life insurance,
retirement insurance, compulsory membership and rates of premium contributions.

RA 6111
Established the Philippine Medical Care Plan and created the Philippine Medical Care
Commission.

RA 7699
Also known as the Portability Law which allows the addition of all creditable services
or periods of contributions made continuously or in the aggregate of a worker under
either the GSIS or SSS for eligibility and computation of benefits.

PD 626
Amended the Presidential Decree No. 442 or the Labor Code of the Philippines to
effect adjustments needed to coordinate grant of social security benefits.

PD 1146
Expanded, increased and integrated the social security and insurance benefits of all
government employees.
PD 1368
Amended the Book Four of the Labor Code of the Philippines, in particular, defined
the coverage of the Employee’s Compensation Program.

PD 1519
Revised the Philippine Medical Care Act to provide total medical services to the
people of the Philippines through a comprehensive and coordinated medical care
plan.

PD 1641
Further amended the Employee’s Compensation Program and State Insurance Fund
of the Labor Code of the Philippines and upgraded the benefits structure for all
covered employees.

IRR of RA 8291
Instituted reforms to increase coverage and expand benefits given by the GSIS to all
government employees.

RA 8291
Otherwise known as the Government Service Insurance Act of 1997 which amended
the 20-year old revised charter of the GSIS, known as Presidential Decree No. 1146.

III. Coverage of the Government Service Insurance System (GSIS):

Section 2.1., Rule II of the Implementing Rules and Regulations of R.A. No.
8291 provides, to wit:

“2.1. All government personnel, whether elective or appointive,

irrespective of status of appointment, provided they are receiving fixed
monthly compensation and have not reached the mandatory
retirement age of 65 years, are compulsorily covered as members of
the GSIS and shall be required to pay contributions.”

The GSIS covers government employees, irrespective of employment statue,

who are employed with:

a. The national government, its political subdivisions, branches, agencies or

instrumentalities;

b. Government owned or controlled corporations;

c. Government financial institutions with original charters;

d. Constitutional commissions;

e. The judiciary. (Sec. 3, GSIS Act of 1997)

IV. Compulsory Membership:

a. All government personnel who are receiving fixed monthly compensation and
have not reached the mandatory retirement age of 65 years, whether elective or
appointive;

b. Elective officials who will be more than 65 years old at the end of his term
(including the period of his re-election without interruption);

c. Officials appointed by the President of the Republic of the Philippines who

remain in office after reaching the age of 65;

d. Contractual or casual employees who receive fixed monthly compensation

and render the required number of working hours for the month. (Rule II, Revised
Implementing Rules of the GSIS Act of 1997)

V. Employees not Subject to Compulsory Coverage of the GSIS:

a. Uniformed personnel of the AFP, PNP, BFP, and BJMP;

b. Baranggay and Sanggunian Officials who are not receiving fixed monthly
compensation;

c. Employees who do not Have monthly regular hours of work and are not
receiving fixed monthly compensation. (Sec. 2, Rule II, Revised Implementing Rules of the
GSIS Act of 1997)

The GSIS makes it compulsory for all employees in the government — the
national government, its political subdivisions, branches, agencies or
instrumentalities, including government-owned or controlled corporations, and
financial institutions with original charters, the constitutional commissions, and the
judiciary, to be members thereof. It does not distinguish between elected and
appointed officials, as long as you are a government employee you are required to
be a GSIS member, and pay the required contributions thereof.

However, members of the Armed Forces of the Philippines and the Philippine
National Police, are not mandatorily subjected to be members of the GSIS.
VI. Classes of Membership:

a) Regular or Special

i. Regular members - those employed by the government, national or

local legislative bodies, GOCC, with original charters, government
financial institutions, EXCEPT the uniformed personnel of the AFP, PNP,
BJMP and BFP, who are required to remit regular monthly contributions
to the GSIS.

ii. Special Members - constitutional commissioners, members of the

judiciary, including those with equivalent rank, who are required by law
to remit regular monthly contributions for life insurance policies to the
GSIS in order to answer for their life insurance benefits;

b) Active or Inactive

i. Active member - those who are still in the government service

(whether regular or special) and together with the government agency
which he belongs, is required to pay the monthly contributions.

ii. Inactive member - a member who is separated from the service either
by: resignation, retirement, disability, dismissal from the service,
retrenchment, or , who is deemed retired from the service under the
GSIS Act of 1997. (Sec. 2, Rule II, Revised Implementing Rules of the GSIS Act of
1997)

Note that:

GSIS membership takes effect on the date of assumption to office by virtue of the
original appointment or election. (Sec. 2, Rule II, Revised Implementing Rules of the GSIS Act
of 1997)

A GSIS member who is separated from the service continues to be a member,

and therefore, entitled to whatever benefits he has qualified to in the event of any
compensable contingency. (Sec. 4, GSIS Act of 1997)

VII. GSIS Benefits

 Under the GSIS Act of 1997, The members of the GSIS are entitled to the
following benefits:

a. Separation benefits (Sec. 11) - The separation benefits are given

to GSIS members who are separated from service or who resigned therefrom
provided that the qualifications set by law are met by the member claiming for
separation benefits. ;

b. Unemployment or involuntary separation benefits (Sec. 12) - are given to an

employee who, at the time of separation from work, was holding a permanent
employment, and was separated involuntarily due to the abolition of his/her office
or position resulting from reorganization. In addition, the member shall have paid
the required monthly contributions to be qualified thereto;

c. Permanent total disability benefits (Sec. 16) - Permanent total disability means
disability caused by injury or disease resulting in complete, irreversible, and
permanent incapacity to work or to engage in any gainful occupation;

d. Permanent partial disability benefits (Sec. 17) - there is permanent partial

disability when a GSIS member is incapacitated to work for a limited period of time
because of complete, and permanent loss of any of the following body parts: any
finger, any toe, one arm, one hand, one foot, one leg, one or both ears, hearing of
one or both ears, sight of one eye, or other cases as may be determined by the GSIS
(Ungos, Jr. and Ungos, III., Agrarian Law and Social Legislation, 2014 Edition);

e. Temporary total disability benefits (Sec. 18) - there is temporary total disability
when a GSIS member is momentarily incapacitated to work or engage in any gainful
occupation as a result of impairment of physical or mental faculties which can be
rehabilitated or restored to their normal functions;

f. Retirement benefits (Sec. 13) - Retirement benefits are those received by

employees upon reaching the age of retirement which is sixty (60) years of age. To
be entitled thereon, according to Section 13-A of R.A. No. 8291, the following
qualifications shall be met;

g. Survivorship benefits (Sec. 20) - Survivorship benefits are given when a member
or pensioner dies, his/her beneficiaries shall be entitled to survivorship benefits
provided in Sections 21 and 22 of R.A. No. 8291 as stated in Section 20 of said
law provided the qualifications set by law are met;

h. Funeral benefit (Sec. 23) - Funeral benefit is given to the beneficiaries of the
deceased member to help them defray the cost of burial, and funeral expenses; and
 i. Life insurance benefit (Sec. 24) - life insurance benefit is given to
all GSIS members, except for Members of the Armed Forces of the Philippines (AFP)
and the Philippine National Police (PNP).

VIII. Benefits and its Inclusions and Conditions:

Separation Benefits:

The Separation benefit consists of the following:

a. For members who resign or are separated from the service after rendering
service for at least 3 years but less than 15 years: Cash payment equivalent to 100%
of the Average Monthly Compensation (AMC) for each year of service he paid
contributions, but not less than P 12,000.00 payable upon reaching the age of 60
years or upon separation, whichever comes later.

Note that:

Average Monthly Compensation (AMC) is the average salary received by the

member during the last 36 months with premium payments (creditable service)
preceding his or her separation, retirement, disability or death, or, if with less than
36 months with premium payments, the actual number of months with premium
payments.

b. For members who resign or are separated from the service after rendering
at least 15 years of service and is below 60 years old at the time of resignation or
separation: Cash payment equivalent to 18 times his basic monthly pension payable
at the time of resignation or separation, plus an old-age pension benefit equal to the
basic monthly pension payable monthly for life upon reaching the age of 60 years.

Unemployment or Involuntary Separation Benefits:

The unemployment benefit is in the form of monthly cash payments equivalent

to 50% of the average monthly compensation payable for the following duration:

a. 2 months - contributions have been made for 1 year but less than 3 years;

b. 3 months - contributions have been made for 3 years but less than 6 years;
 c. 4 months - contributions have been made for 6 years but less than 9 years;

d. 5 months - contributions have been made for 9 years but less than 11 years;

e. 6 months - contributions have been made for 11 years but less than 15 years;

Conditions for Entitlement of Unemployment Benefit:

GSIS members are entitled to the unemployment benefits if the following

conditions are met:

a. He was a permanent employee at the time of separation;

b. His separation was involuntary due to the abolition of his office; and

c. He has been paying the required premium contributions for at least 1 year
prior to separation. (Sec. 22, revised Implementing Rules and Regulations of the GSIS Act
of 1997)

Permanent Total Disability Benefits:

The following disabilities shall be deemed total and permanent:

a. Complete loss of sight for both eyes;

b. Loss of two limbs at or above the ankle or wrists;

c. Permanent complete paralysis of two limbs; and

d. Brain injury resulting in incurable imbecility or insanity;

e. Such other cases as may be determined and approved by the GSIS. (Sec. 23 2.1
Revised Implementing Rules and Regulations of the GSIS Act of 1997)

The permanent total disability benefits for GSIS members are as follows:
 a. If the permanent disability was suffered while in the service: Lifetime
monthly income benefit equal to the basic monthly pension plus cash payment
equivalent to 18 times his basic monthly pension, provided that a total of at
least 180 monthly contributions has been paid.

b. If the permanent disability was suffered after separation from service:

Lifetime monthly income benefit equal to the basic monthly pension effective
from the date of disability provided that the member has paid either: 36
monthly contributions within the 5-year period immediately preceding his
disability, or 180 monthly contributions, prior to his disability (Sec. 16, GSIS Act of
1997)

c. If the member has not paid the required minimum contributions and the
permanent total disability was suffered after separation from service: His
separation benefit equivalent to 100% of his average monthly compensation for
each year of service (But not less than P 12,000.00) shall be paid in advance,
provided that he has rendered at least three (3) years of service at the time of
his permanent total disability. (Sec. 16, GSIS Act of 1997)

Note that:

Under the current law, the computation of the basic monthly pension of a GSIS
pensioner is 37.5% of the revalued average monthly compensation, plus 2.5% of the
revalued average monthly compensation for each year of service in excess of 15 years.
Provided that the basic monthly pension shall not exceed ninety (90%) of the
average monthly compensation. (Sec. 9, GSIS Act of 1997)

A member cannot simultaneously enjoy the monthly income benefit for

permanent disability and the old-age retirement. (Sec. 16, GSIS Act of 1997)

A member is not entitled to the benefit if the permanent total disability was
caused by his grave misconduct, notorious negligence, habitual intoxication, or
willful intention to kill himself or another. (Sec. 15, GSIS Act of 1997)

Permanent Partial Disability Benefits:

A GSIS member is entitled to permanent partial disability benefit:

a. If he was in the service at the time of disability; or

b. If separated from service, he has paid at least 36 months contributions within

the 5-year period immediately preceding his disability, or has paid a total of at
 least 180 months contributions prior to the disability, provided that the
following conditions are met:

i. He is gainfully employed prior to the commencement of disability

resulting in loss of income as evidenced by any controvertible proof
thereof;

ii. He is not a registered member of any social insurance institution; and

iii. He is not receiving any other pension either from GSIS or another local
or foreign institution or organization

Note that:

A member is not entitled to the benefit if the permanent total disability was
caused by his grave misconduct, notorious negligence, habitual intoxication, or
willful intention to kill himself or another. (Sec. 15, GSIS Act of 1997)

Temporary Total Disability Benefits:

A GSIS member is entitled to temporary total disability benefit under the

following conditions:

a. The GSIS member must be in the service at the time of his disability benefit
under the following conditions:

i. Rendered at least 3 years of service; and

ii. Paid at least 6 monthly contributions in the 12 month period

immediately preceding his disability.

b. The GSIS member must have exhausted all his sick leave credits. (Sec. 18, GSIS
Act of 1997)

Note that:

Under Section 16 (c) of R.A. No. 8291, the disability benefits shall be suspended,
unless the member has reached the minimum retirement age, when he/she:
 1. is reemployed; or
2. recovers from his disability as determined by the GSIS, whose decision shall
be final and binding; or
3. fails to present himself for medical examination when required by the GSIS.

Retirement Benefits:

Retirement benefits are those received by employees upon reaching the age of
retirement which is sixty (60) years of age. To be entitled thereon, according
to Section 13-A of R.A. No. 8291, the following qualifications shall be met:

1. he has rendered at least fifteen years of service;

2. he is at least sixty (60) years of age at the time of retirement; and
3. he is not receiving a monthly pension benefit from permanent total disability.

A retiring GSIS member has the following options:

a. A 5 year lump sum equal to 60 months of basic monthly pension. After lapse
of the 5-year period, old-age pension benefit equal to the basic monthly pension
payable for life; or

b. Cash payment benefit equal to 18 times of the basic monthly pension plus
monthly pension for life. (Sec. 13-A, GSIS Act of 1997)

Survivorship Benefits:

If the GSIS member dies, the primary beneficiaries are entitled to the following,
whichever is applicable:

A. Survivorship pension, under the following conditions: either the deceased

was in the service at the time of his death or if separated from the service, has at
least 3 years of service at the time of his death and has paid 36 monthly
contributions within the 5 year period immediately preceding his death; or has paid
a total of at least 180 monthly contributions prior to his death.

B. Survivorship pension plus cash payment equivalent to 100% of average

monthly compensation for every year of service under the following conditions: the
deceased was in the service at the time of his death; and must have rendered at
least 3 years of service.
 C. Cash payment equivalent to 100% of his Average Monthly Compensation for
each year of service he paid contributions, but not less than P 12,000.00 under the
following conditions: the deceased has rendered at least 3 years of service prior to
his death; but does not qualify for survivorship pension mentioned above.

The survivorship pension shall be paid to:

a. The dependent spouse, if she is the only survivor;

b. The dependent children, if they are the only survivors;

c. The dependent spouse and the dependent children, if they are survivors.

d. Secondary beneficiaries, if the aforementioned dependents are absent.

e. In the absence of both primary and secondary beneficiaries, the benefits shall
be paid to his legal heirs. (Sec. 21, GSIS Act of 1997)

Funeral Benefits:

It is payable to any qualified individual, in accordance with the following order of

priority:

A. Legitimate Spouse

B. Legitimate Child who spent for the funeral services; or

C. Any other person who can show incontrovertible proof that he shouldered
the funeral expenses of the deceased.

The funeral benefit is:

A. The prevailing amount approved by the Board of Trustees at the time of

death of the member or pensioner,

B. P10,000.00 - for uniformed members of the PNP, BJMP, and BFP.

Life Insurance Benefit:

 The life insurance benefit is compulsory and available to all government
employees, except members of the AFP, PNP, BJMP, and BFP. (Sec. 24, GSIS Act of 1997)

While, life insurance benefit is given to all GSIS members, except for Members of the
Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP). It is
provided in Section 24 of R.A. No. 8291, to wit:

“All employees except for Members of the Armed Forces of the

Philippines (AFP) and the Philippine National Police (PNP) shall, under
such terms and conditions as may be promulgated by the GSIS, be
compulsorily covered with life insurance, which shall automatically
take effect as follows:

(1) for those employed after the effectivity of this Act, their insurance
shall take effect on the date of their employment;

(2) for those whose insurance will mature after the effectivity of this
Act, their insurance shall be deemed renewed on the day following the
maturity or expiry date of their insurance;

(3) for those without any life insurance as of the effectivity of this Act,
their insurance shall take effect following said effectivity.”

Note that:

It must be noted that the claims for benefits under this law shall be filed within 4
years from the time of the contingency except claims for life and retirement benefits.
Hence, after the contingency such as separation from work, occurrence of disability,
or death happens, then the member ought to file a claim immediately, in order to
avail of the benefits provided under this law.