Republic Act No.

8282 May 01, 1997

AN ACT FURTHER STRENGTHENING THE SOCIAL SECURITY SYSTEM THEREBY AMENDING FOR THIS
PURPOSE, REPUBLIC ACT NO. 1161, AS AMENDED, OTHERWISE KNOWN AS THE SOCIAL SECURITY
LAW

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled::

Section 1. Republic Act No. 1161, as amended, otherwise known as the "Social
Security Law", is hereby further amended to read as follows:

"SECTION 1. Short Title. - This Act shall be known as the "AN ACT FURTHER
STRENGTHENING THE SOCIAL SECURITY SYSTEM THEREBY AMENDING FOR THIS PURPOSE,
REPUBLIC ACT NO. 1161, AS AMENDED, OTHERWISE KNOWN AS THE SOCIAL SECURITY LAW."

"SEC. 2. Declaration of Policy. - It is the policy of the Republic of the

Philippines to establish, develop, promote and perfect a sound and viable tax-
exempt social security service suitable to the needs of the people throughout the
Philippines which shall promote social justice and provide meaningful protection to
members and their beneficiaries against the hazards of disability, sickness,
maternity, old age, death, and other contingencies resulting in loss of income or
financial burden. Towards this end, the State shall endeavor to extend social
security protection to workers and their beneficiaries.

"SEC. 3. Social Security System. - (a) To carry out the purposes of this Act, the
Social Security System, hereinafter referred to as 'SSS', a corporate body, with
principal place of business in Metro Manila, Philippines is hereby created. The SSS
shall be directed and controlled by a Social Security Commission, hereinafter
referred to as 'Commission', composed of the Secretary of Labor and Employment or
his duly designated undersecretary, the SSS president and seven (7) appointive
members, three (3) of whom shall represent the workers' group, at least one of whom
shall be a woman; three (3), the employers' group, at least one (1) of whom shall
be a woman; and one (1), the general public whose representative shall have
adequate knowledge and experience regarding social security, to be appointed by the
President of the Philippines. The six (6) members representing workers and
employers shall be chosen from among the nominees of workers' and employers'
organizations, respectively. The Chairman of the Commission shall be designated by
the President of the Philippines from among its members. The term of the appointive
members shall be three (3) years: Provided, That the terms of the first six (6)
appointive members shall be one (1), two (2) and three (3) years for every two
members, respectively: Provided, further, That they shall continue to hold office
until their successors shall have been appointed and duly qualified. All vacancies,
prior to the expiration of the term, shall be filled for the unexpired term only.
The appointive members of the Commission shall receive at least two thousand five
hundred pesos (P2,500.00) per diem for each meeting actually attended by them but
not to exceed Ten thousand pesos (P10,000.00) a month:: Provided, That members of
the Commission shall also receive a per diem of at least Two thousand five hundred
pesos (P2,500.00) but not to exceed Fifteen thousand pesos (P15,000.00) a month:
Provided , further, That said members of the Commission shall also receive
reasonable transportation and representation allowances as may be fixed by the
Commission, but not to exceed Ten thousand pesos (P10,000.00) a month.

"(b) The general conduct of the operations and management functions of the SSS
shall be vested in the SSS President who shall serve as the chief executive officer
immediately responsible for carrying out the program of the SSS and the policies of
the Commission. The SSS President shall be a person who has had previous experience
in the technical and administrative fields related to the purposes of this Act. He
shall be appointed by the President of the Philippines and shall receive salary to
be fixed by the Commission with the approval of the President of the Philippines,
payable from the funds of the SSS.

"(c) The Commission, upon the recommendation of the SSS President, shall appoint an
actuary, and such other personnel as may be deemed necessary, fix their reasonable
compensation, allowances and other benefits, prescribe their duties and establish
such methods and procedures as may be necessary to insure the efficient, honest and
economical administration of the provisions and purposes of this Act: Provided,
however, That the personnel of the SSS below the rank of Vice-President shall be
appointed by the SSS President: Provided, further, That the personnel appointed by
the SSS President, except those below the rank of assistant manager, shall be
subject to the confirmation by the Commission: Provided, further, That the
personnel of the SSS shall be selected only from civil service eligibles and be
subject to civil service rules and regulations: Provided, finally, That the SSS
shall be exempt from the provisions of Republic Act No. 6758 and Republic Act No.
7430.

"SEC. 4. Powers and Duties of the Commission and SSS. - (a) The Commission. - For
the attainment of its main objectives as set forth in Section 2 hereof, the
Commission shall have the following powers and duties:

"(1) To adopt, amend and rescind, subject to the approval of the President of the
Philippines, such rules and regulations as may be necessary to carry out the
provisions and purposes of this Act;

"(2) To establish a provident fund for the members which will consist of voluntary
contributions of employers and/or employees, self-employed and voluntary members
and their earnings, for the payment of benefits to such members or their
beneficiaries, subject to such rules and regulations as it may promulgate and
approved by the President of the Philippines;

"(3) To maintain a provident fund which consists of contributions made by both the
SSS and its officials and employees and their earnings, for the payment of benefits
to such officials and employees or their heirs under such terms and conditions as
it may prescribe;

"(4) To approve restructuring proposals for the payment of due but unremitted
contributions and unpaid loan amortizations under such terms and conditions as it
may prescribe;

"(5) To authorize cooperatives registered with the cooperative development

authority or associations registered with the appropriate government agency to act
as collecting agents of the SSS with respect to their members: Provided, That the
SSS shall accredit the cooperative or association: Provided, further, That the
persons authorized to collect are bonded;

"(6) To compromise or release, in whole or in part, any interest, penalty or any

civil liability to SSS in connection with the investments authorized under Section
26 hereof, under such terms and conditions as it may prescribe and approved by the
President of the Philippines; and

"(7) To approve, confirm, pass upon or review any and all actions of the SSS in the
proper and necessary exercise of its powers and duties hereinafter enumerated.

"(b) The Social Security System. - Subject to the provision of Section four (4),
paragraph seven (7) hereof, the SSS shall have the following powers and duties:

"(1) To submit annually not later than April 30, a public report to the President
of the Philippines and to the Congress of the Philippines covering its activities
in the administration and enforcement of this Act during the preceding year
including information and recommendations on broad policies for the development and
perfection of the program of the SSS;

"(2) To require the actuary to submit a valuation report on the SSS benefit program
every four (4) years, or more frequently as may be necessary, to undertake the
necessary actuarial studies and calculations concerning increases in benefits
taking into account inflation and the financial stability of the SSS, and to
provide for feasible increases in benefits every four (4) years, including the
addition of new ones, under such rules and regulations as the Commission may adopt,
subject to the approval of the President of the Philippines: Provided, That the
actuarial soundness of the reserve fund shall be guaranteed: Provided, further,
That such increases in benefits shall not require any increase in the rate of
contribution;

"(3) To establish offices of the SSS to cover as many provinces, cities and
congressional districts, whenever and wherever it may be expedient, necessary and
feasible, and to inspect or cause to be inspected periodically such offices;

"(4) To enter into agreements or contracts for such service and aid, as may be
needed for the proper, efficient and stable administration of the SSS;

"(5) To adopt, from time to time, a budget of expenditures including salaries of

personnel, against all funds available to the SSS under this Act;

"(6) To set up its accounting system and provide the necessary personnel therefor;

"(7) To require reports, compilations and analyses of statistical and economic data
and to make investigation as may be needed for the proper administration and
development of the SSS;

"(8) To acquire and dispose of property, real or personal, which may be necessary
or expedient for the attainment of the purposes of this Act;

"(9) To acquire, receive, or hold, by way of purchase, expropriation or otherwise,

public or private property for the purpose of undertaking housing projects
preferably for the benefit of low-income members and for the maintenance of
hospitals and institutions for the sick, aged and disabled, as well as schools for
the members and their immediate families;

"(10) To sue and be sued in court; and

"(11) To perform such other corporate acts as it may deem appropriate for the
proper enforcement of this Act.

"SEC. 5. Settlement of Disputes. - (a) Any dispute arising under this Act with
respect to coverage, benefits, contributions and penalties thereon or any other
matter related thereto, shall be cognizable by the Commission, and any case filed
with respect thereto shall be heard by the Commission, or any of its members, or by
hearing officers duly authorized by the Commission and decided within twenty (20)
days after the submission of the evidence. The filing, determination and settlement
of disputes shall be governed by the rules and regulations promulgated by the
Commission.

"(b) Appeal to Courts. - Any decision of the Commission, in the absence of an

appeal therefrom as herein Provided, shall become final and executory fifteen (15)
days after the date of notification, and judicial review thereof shall be permitted
only after any party claiming to be aggrieved thereby has exhausted his remedies
before the Commission. The Commission shall be deemed to be a party to any judicial
action involving any such decision, and may be represented by an attorney employed
by the Commission, or when requested by the Commission, by the Solicitor General or
any public prosecutors.

"(c) Court Review. - The decision of the Commission upon any disputed matter may be
reviewed both upon the law and the facts by the Court of Appeals. For the purpose
of such review, the procedure concerning appeals from the Regional Trial Court
shall be followed as far as practicable and consistent with the purposes of this
Act. Appeal from a decision of the Commission must be taken within fifteen (15)
days from notification of such decision. If the decision of the Commission involves
only questions of law, the same shall be reviewed by the Supreme Court. No appeal
bond shall be required. The case shall be heard in a summary manner, and shall take
precedence over all cases, except that in the Supreme Court, criminal cases wherein
life imprisonment or death has been imposed by the trial court shall take
precedence. No appeal shall act as a supersedeas or a stay of the order of the
Commission unless the Commission itself, or the Court of Appeals or the Supreme
Court, shall so order.

"(d) Execution of Decisions. - The Commission may, motu proprio or on motion of any
interested party, issue a writ of execution to enforce any of its decisions or
awards, after it has become final and executory, in the same manner as the decision
of the Regional Trial Court by directing the city or provincial sheriff or the
sheriff whom it may appoint to enforce such final decision or execute such writ;
and any person who shall fail or refuse to comply with such decision, award or
writ, after being required to do so shall, upon application by the Commission
pursuant to Rule 71 of the Rules of Court, be punished for contempt.

"SEC. 6. Auditor and Counsel. - (a) The Chairman of the Commission on Audit shall
be the ex-officio Auditor of the SSS. He or his representative shall check and
audit all the accounts, funds and properties of the SSS in the same manner and as
frequently as the accounts, funds and properties of the government are checked and
audited under existing laws, and he shall have, as far as practicable, the same
powers and duties as he has with respect to the checking and auditing of public
accounts, funds and properties in general.

"(b) The Secretary of Justice shall be the ex-officio counsel of the SSS. He or his
representative shall act as legal adviser and counsel thereof.

"SEC. 7. Oaths, Witnesses, and Production of Records. - When authorized by the

Commission, an official or employee thereof shall have the power to administer oath
and affirmation, take depositions, certify to official acts, and issue subpoena and
subpoena duces tecum to compel the attendance of witnesses and the production of
books, papers, correspondence and other records deemed necessary as evidence in
connection with any question arising under this Act. Any case of contumacy shall be
dealt with by the Commission in accordance with law.

"SEC. 8. Terms Defined. - For purposes of this Act, the following terms shall,
unless the context indicates otherwise, have the following meanings:

"(a) SSS - The Social Security System created by this Act.

"(b) Commission - The Social Security Commission as herein created.

"(c) Employer- Any person, natural or juridical, domestic or foreign, who carries
on in the Philippines any trade, business, industry, undertaking, or activity of
any kind and uses the services of another person who is under his orders as regards
the employment, except the Government and any of its political subdivisions,
branches or instrumentalities, including corporations owned or controlled by the
Government: Provided, That a self-employed person shall be both employee and
employer at the same time.

"(d) Employee - Any person who performs services for an employer in which either or
both mental or physical efforts are used and who receives compensation for such
services, where there is an employer-employee relationship: Provided, That a self-
employed person shall be both employee and employer at the same time.

"(e) Dependents - The dependents shall be the following:

"(1) The legal spouse entitled by law to receive support from the member;

"(2) The legitimate, legitimated or legally adopted, and illegitimate child who is
unmarried, not gainfully employed, and has not reached twenty-one (21) years of
age, or if over twenty-one (21) years of age, he is congenitally or while still a
minor has been permanently incapacitated and incapable of self-support, physically
or mentally; and

"(3) The parent who is receiving regular support from the member.

"(f) Compensation - All actual remuneration for employment, including the mandated
cost-of-living allowance, as well as the cash value of any remuneration paid in any
medium other than cash except that part of the remuneration in excess of the
maximum salary credit as Provided under Section Eighteen of this Act.

"(g) Monthly salary credit - The compensation base for contributions and benefits
as indicated in the schedule in Section Eighteen of this Act.

"(h) Monthly - The period from one end of the last payroll period of the preceding
month to the end of the last payroll period of the current month if compensation is
on hourly, daily or weekly basis; if on any other basis, 'monthly' shall mean a
period of one (1) month.

"(i) Contribution - The amount paid to the SSS by and on behalf of the members in
accordance with Section Eighteen of this Act.

"(j) Employment - Any service performed by an employee for his employer except:

"(1) Employment purely casual and not for the purpose of occupation or business of
the employer;

"(2) Service performed on or in connection with an alien vessel by an employee if

he is employed when such vessel is outside the Philippines;

"(3) Service performed in the employ of the Philippine Government or

instrumentality or agency thereof;

"(4) Service performed in the employ of a foreign government or international

organization, or their wholly-owned instrumentality: Provided, however, That this
exemption notwithstanding, any foreign government, international organization or
their wholly-owned instrumentality employing workers in the Philippines or
employing Filipinos outside of the Philippines, may enter into an agreement with
the Philippine Government for the inclusion of such employees in the SSS except
those already covered by their respective civil service retirement systems:
Provided, further, That the terms of such agreement shall conform with the
provisions of this Act on coverage and amount of payment of contributions and
benefits: Provided, finally, That the provisions of this Act shall be supplementary
to any such agreement; and

"(5) Such other services performed by temporary and other employees which may be
excluded by regulation of the Commission. Employees of bona fide independent
contractors shall not be deemed employees of the employer engaging the service of
said contractors.

"(k) Beneficiaries - The dependent spouse until he or she remarries, the dependent
legitimate, legitimated or legally adopted, and illegitimate children, who shall be
the primary beneficiaries of the member: Provided, That the dependent illegitimate
children shall be entitled to fifty percent (50%) of the share of the legitimate,
legitimated or legally adopted children: Provided, further, That in the absence of
the dependent legitimate, legitimated children of the member, his/her dependent
illegitimate children shall be entitled to one hundred percent (100%) of the
benefits. In their absence, the dependent parents who shall be the secondary
beneficiaries of the member. In the absence of all the foregoing, any other person
designated by the member as his/her secondary beneficiary.

"(l) Contingency - The retirement, death, disability, injury or sickness and

maternity of the member.

"(m) Average monthly salary credit - The result obtained by dividing the sum of the
last sixty (60) monthly salary credits immediately preceding the semester of
contingency by sixty (60), or the result obtained by dividing the sum of all the
monthly salary credits paid prior to the semester of contingency by the number of
monthly contributions paid in the same period, whichever is greater: Provided, That
the injury or sickness which caused the disability shall be deemed as the permanent
disability for the purpose of computing the average monthly salary credit.

"(n) Average daily salary credit- The result obtained by dividing the sum of the
six (6) highest monthly salary credits in the twelve-month period immediately
preceding the semester of contingency by one hundred eighty (180).

"(o) Semester - A period of two (2) consecutive quarters ending in the quarter of
contingency.

"(p) Quarter - A period of three (3) consecutive calendar months ending on the last
day of March, June, September and December.

"(q) Credited years of service - For a member covered prior to January nineteen
hundred and eighty five (1985) minus the calendar year of coverage plus the number
of calendar years in which six (6) or more contributions have been paid from
January nineteen hundred and eighty five (1985) up to the calendar year containing
the semester prior to the contingency. For a member covered in or after January
nineteen hundred and eighty five (1985), the number of calendar years in which six
(6) or more contributions have been paid from the year of coverage up to the
calendar year containing the semester prior to the contingency: Provided, That the
Commission may provide for a different number of contributions in a calendar year
for it to be considered as a credited year of service.

"(r) Member - The worker who is covered under Section Nine and Section Nine-A of
this Act.

"(s) Self-employed - Any person whose income is not derived from employment, as
defined under this Act, as well as those workers enumerated in Section Nine-A
hereof.

"(t) Net earnings - Net income before income taxes plus non-cash charges such as
depreciation and depletion appearing in the regular financial statement of the
issuing or assuming institution.

"(u) Fixed charges - Recurring expense such as amortization of debt discount or

rentals for leased properties, including interest on funded and unfunded debt.

"SEC. 9. Coverage. - (a) Coverage in the SSS shall be compulsory upon all employees
not over sixty (60) years of age and their employers: Provided, That in the case of
domestic helpers, their monthly income shall not be less than One thousand pesos
(P1,000.00) a month: Provided, further, That any benefit already earned by the
employees under private benefit plans existing at the time of the approval of this
Act shall not be discontinued, reduced or otherwise impaired: Provided, further,
That private plans which are existing and in force at the time of compulsory
coverage shall be integrated with the plan of the SSS in such a way where the
employer's contribution to his private plan is more than that required of him in
this Act, he shall pay to the SSS only the contribution required of him and he
shall continue his contribution to such private plan less his contribution to the
SSS so that the employer's total contribution to his benefit plan and to the SSS
shall be the same as his contribution to his private benefit plan before the
compulsory coverage: Provided, further, That any changes, adjustments,
modifications, eliminations or improvements in the benefits to be available under
the remaining private plan, which may be necessary to adopt by reason of the
reduced contributions thereto as a result of the integration, shall be subject to
agreements between the employers and employees concerned: Provided, further, That
the private benefit plan which the employer shall continue for his employees shall
remain under the employer's management and control unless there is an existing
agreement to the contrary: Provided, finally, That nothing in this Act shall be
construed as a limitation on the right of employers and employees to agree on and
adopt benefits which are over and above those Provided under this Act.

"(b) Spouses who devote full time to managing the household and family affairs,
unless they are also engaged in other vocation or employment which is subject to
mandatory coverage, may be covered by the SSS on a voluntary basis.

"(c) Filipinos recruited by foreign-based employers for employment abroad may be

covered by the SSS on a voluntary basis.

"SEC. 9-A. Compulsory Coverage of the Self-Employed. - Coverage in the SSS shall
also be compulsory upon such self-employed persons as may be determined by the
Commission under such rules and regulations as it may prescribe, including but not
limited to the following:

"1. All self-employed professionals;

"2. Partners and single proprietors of businesses;

"3. Actors and actresses, directors, scriptwriters and news correspondents who do
not fall within the definition of the term "employee" in Section 8 (d) of this Act;

"4. Professional athletes, coaches, trainers and jockeys; and

"5. Individual farmers and fishermen.

"Unless otherwise specified herein, all provisions of this Act applicable to

covered employees shall also be applicable to the covered self-employed persons.

"SEC. 10. Effective Date of Coverage. - Compulsory coverage of the employer shall
take effect on the first day of his operation and that of the employee on the day
of his employment: Provided, That the compulsory coverage of the self-employed
person shall take effect upon his registration with the SSS.

"SEC. 11. Effect of Separation from Employment. - When an employee under compulsory
coverage is separated from employment, his employer's contribution on his account
and his obligation to pay contributions arising from that employment shall cease at
the end of the month of separation, but said employee shall be credited with all
contributions paid on his behalf and entitled to benefits according to the
provisions of this Act. He may, however, continue to pay the total contributions to
maintain his right to full benefit.

"SEC. 11-A. Effect of Interruption of Business or Professional Income. - If the

self-employed realizes no income in any given month, he shall not be required to
pay contributions for that month. He may, however, be allowed to continue paying
contributions under the same rules and regulations applicable to a separated
employee member: Provided, That no retroactive payment of contributions shall be
allowed other than as prescribed under Section Twenty-two-A hereof.

"SEC. 12. Monthly Pension. - (a) The monthly pension shall be the highest of the
following amounts:

"(1) The sum of the following:

"(i) Three hundred pesos (P300.00; plus

"(ii) Twenty percent (20%) of the average monthly salary credit; plus

"(iii) Two percent (2%) of the average monthly salary credit for each credited year
of service in excess of ten (10) years; or

"(2) Forth percent (40%) of the average monthly salary credit; or

"(3) One thousand pesos (P1,000.00): Provided, That the monthly pension shall in no
case be paid for an aggregate amount of less than sixty (60) months.

"(b) Notwithstanding the preceding paragraph, the minimum pension shall be One
thousand two hundred pesos (P1,200.00) for members with at least ten (10) credited
years of service and Two thousand four hundred pesos (P2,400.00) for those with
twenty (20) credited years of service.

"SEC. 12-A. Dependents' Pension. - Where monthly pension is payable on account of

death, permanent total disability or retirement, dependents' pension equivalent to
ten percent (10%) of the monthly pension or Two hundred fifty pesos (P250.00),
whichever is higher, shall also be paid for each dependent child conceived on or
before the date of the contingency but not exceeding five (5), beginning with the
youngest and without substitution: Provided, That where there are legitimate or
illegitimate children, the former shall be preferred.

SEC. 12-B. Retirement Benefits. - (a) A member who has paid at least one hundred
twenty (120) monthly contributions prior to the semester of retirement and who: (1)
has reached the age of sixty (60) years and is already separated from employment or
has ceased to be self-employed; or (2) has reached the age of sixty-five (65)
years, shall be entitled for as long as he lives to the monthly pension: Provided,
That he shall have the option to receive his first eighteen (18) monthly pensions
in lump sum discounted at a preferential rate of interest to be determined by the
SSS.

"(b) A covered member who is sixty (60) years old at retirement and who does not
qualify for pension benefits under paragraph (a) above, shall be entitled to a lump
sum benefit equal to the total contributions paid by him and on his behalf:
Provided, That he is separated from employment and is not continuing payment of
contributions to the SSS on his own.

"(c) The monthly pension shall be suspended upon the reemployment or resumption of
self-employment of a retired member who is less than sixty-five (65) years old. He
shall again be subject to Section Eighteen and his employer to Section Nineteen of
this Act.

"(d) Upon the death of the retired member, his primary beneficiaries as of the date
of his retirement shall be entitled to receive the monthly pension: Provided, That
if he has no primary beneficiaries and he dies within sixty (60) months from the
start of his monthly pension, his secondary beneficiaries shall be entitled to a
lump sum benefit equivalent to the total monthly pensions corresponding to the
balance of the five-year guaranteed period, excluding the dependents' pension.

"(e) The monthly pension of a member who retires after reaching age sixty (60)
shall be the higher of either: (1) the monthly pension computed at the earliest
time he could have retired had he been separated from employment or ceased to be
self-employed plus all adjustments thereto; or (2) the monthly pension computed at
the time when he actually retires.

"SEC. 13. Death Benefits. - Upon the death of a member who has paid at least
thirty-six (36) monthly contributions prior to the semester of death, his primary
beneficiaries shall be entitled to the monthly pension: Provided, That if he has no
primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum
benefit equivalent to thirty-six (36) times the monthly pension. If he has not paid
the required thirty-six (36) monthly contributions, his primary or secondary
beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly
pension times the number of monthly contributions paid to the SSS or twelve (12)
times the monthly pension, whichever is higher.

"SEC. 13-A. Permanent Disability Benefits. - (a) Upon the permanent total
disability of a member who has paid at least thirty-six (36) monthly contributions
prior to the semester of disability, he shall be entitled to the monthly pension:
Provided, That if he has not paid the required thirty-six (36) monthly
contributions, he shall be entitled to a lump sum benefit equivalent to the monthly
pension times the number of monthly contributions paid to the SSS or twelve (12)
times the monthly pension, whichever is higher. A member who (1) has received a
lump sum benefit; and (2) is reemployed or has resumed self-employment not earlier
than one (1) year from the date of his disability shall again be subject to
compulsory coverage and shall be considered a new member.

"(b) The monthly pension and dependents' pension shall be suspended upon the
reemployment or resumption of self-employment or the recovery of the disabled
member from his permanent total disability or his failure to present himself for
examination at least once a year upon notice by the SSS.

"(c) Upon the death of the permanent total disability pensioner, his primary
beneficiaries as of the date of disability shall be entitled to receive the monthly
pension: Provided, That if he has no primary beneficiaries and he dies within sixty
(60) months from the start of his monthly pension, his secondary beneficiaries
shall be entitled to a lump sum benefit equivalent to the total monthly pensions
corresponding to the balance of the five-year guaranteed period excluding the
dependents' pension.

"(d) The following disabilities shall be deemed permanent total:

"1. Complete loss of sight of both eyes;

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

"3. Permanent complete paralysis of two limbs;

"4. Brain injury resulting to incurable imbecility or insanity; and

"5. Such cases as determined and approved by the SSS.

"(e) If the disability is permanent partial, and such disability occurs before
thirty-six (36) monthly contributions have been paid prior to the semester of
disability, the benefit shall be such percentage of the lump sum benefit described
in the preceding paragraph with due regard to the degree of disability as the
Commission may determine.

"(f) If the disability is permanent total and such disability occurs after thirty-
six (36) monthly contributions have been paid prior to the semester of disability,
the benefit shall be the monthly pension for permanent total disability payable not
longer than the period designated in the following schedule:

Complete and permanent loss of use of

Number of Months

One thumb

10

One index finger

One middle finger

One right finger

One little finger

One big toe

One hand

39

One arm

50

One foot

31

One leg

46
One ear

10

Both ears

20

Hearing of one ear

10

Hearing of both ears

50

Sight of one eye

25

"(g) The percentage degree of disability which is equivalent to the ratio that the
designated number of months of compensability bears to seventy-five (75), rounded
to the next higher integer, shall not be additive for distinct, separate and
unrelated permanent partial disabilities, but shall be additive for deteriorating
and related permanent partial disabilities to a maximum of one hundred percent
(100%), in which case, the member shall be deemed as permanently totally disabled.

"(h) In case of permanent partial disability, the monthly pension benefit shall be
given in lump sum if it is payable for less than twelve (12) months.

"(i) For the purpose of adjudicating retirement, death and permanent total
disability pension benefits, contributions shall be deemed paid for the months
during which the member received partial disability pension: Provided, That such
contributions shall be based on his last contribution prior to his disability.

"(j) Should a member who is on partial disability pension retire or die, his
disability pension shall cease upon his retirement or death.

"SEC. 13-B. Funeral Benefit. - A funeral grant equivalent to Twelve thousand pesos
(P12,000.00) shall be paid, in cash or in kind, to help defray the cost of funeral
expenses upon the death of a member, including permanently totally disabled member
or retiree.

"SEC. 14. Sickness Benefit. - (a) A member who has paid at least three (3) monthly
contributions in the twelve-month period immediately preceding the semester of
sickness or injury and is confined therefor for more than three (3) days in a
hospital or elsewhere with the approval of the SSS, shall, for each day of
compensable confinement or a fraction thereof, be paid by his employer, or the SSS,
if such person is unemployed or self-employed, a daily sickness benefit equivalent
to ninety percent (90%) of his average daily salary credit, subject to the
following conditions:

"(1) In no case shall the daily sickness benefit be paid longer than one hundred
twenty (120) days in one (1) calendar year, nor shall any unused portion of the one
hundred twenty (120) days of sickness benefit granted under this section be carried
forward and added to the total number of compensable days allowable in the
subsequent year;

"(2) The daily sickness benefit shall not be paid for more than two hundred forty
(240) days on account of the same confinement; and

"(3) The employee member shall notify his employer of the fact of his sickness or
injury within five (5) calendar days after the start of his confinement unless such
confinement is in a hospital or the employee became sick or was injured while
working or within the premises of the employer in which case, notification to the
employer is necessary: Provided, That if the member is unemployed or self-employed,
he shall directly notify the SSS of his confinement within five (5) calendar days
after the start thereof unless such confinement is in a hospital in which case
notification is also not necessary: Provided, further, That in cases where
notification is necessary, the confinement shall be deemed to have started not
earlier than the fifth day immediately preceding the date of notification.

"(b) The compensable confinement shall begin on the first day of sickness, and the
payment of such allowances shall be promptly made by the employer every regular
payday or on the fifteenth and last day of each month, and similarly in the case of
direct payment by the SSS, for as long as such allowances are due and payable:
Provided, That such allowance shall begin only after all sick leaves of absence
with full pay to the credit of the employee member shall have been exhausted.

"(c) One hundred percent (100%) of the daily benefits Provided in the preceding
paragraph shall be reimbursed by the SSS to said employer upon receipt of
satisfactory proof of such payment and legality thereof: Provided, That the
employer has notified the SSS of the confinement within five (5) calendar days
after receipt of the notification from the employee member: Provided, further, That
if the notification to the SSS is made by the employer beyond five (5) calendar
days after receipt of the notification from the employee member, said employer
shall be reimbursed only for each day of confinement starting from the tenth
calendar day immediately preceding the date of notification to the SSS: Provided,
finally, That the SSS shall reimburse the employer or pay the unemployed member
only for confinement within the one-year period immediately preceding the date the
claim for benefit or reimbursement is received by the SSS, except confinement in a
hospital in which case the claim for benefit or reimbursement must be filed within
one (1) year from the last day of confinement.

"(d) Where the employee member has given the required notification but the employer
fails to notify the SSS of the confinement or to file the claim for reimbursement
within the period prescribed in this section resulting in the reduction of the
benefit or denial of the claim, such employer shall have no right to recover the
corresponding daily allowance he advanced to the employee member as required in
this section.

"(e)The claim of reimbursement shall be adjudicated by the SSS within a period of

two (2) months from receipt thereof: Provided, That should no payment be received
by the employer within one (1) month after the period prescribed herein for
adjudication, the reimbursement shall thereafter earn simple interest of one
percent (1%) per month until paid.

"(f) The provisions regarding the notification required of the member and the
employer as well as the period within which the claim for benefit or reimbursement
may be filed shall apply to all claims filed with the SSS.

"SEC. 14-A. Maternity Leave Benefit. - A female member who has paid at least three
(3) monthly contributions in the twelve-month period immediately preceding the
semester of her childbirth or miscarriage shall be paid a daily maternity benefit
equivalent to one hundred percent (100%) of her average daily salary credit for
sixty (60) days or seventy-eight (78) days in case of caesarian delivery, subject
to the following conditions:
"(a) That the employee shall have notified her employer of her pregnancy and the
probable date of her childbirth, which notice shall be transmitted to the SSS in
accordance with the rules and regulations it may provide;

"(b) The full payment shall be advanced by the employer within thirty (30) days
from the filing of the maternity leave application;

"(c) That payment of daily maternity benefits shall be a bar to the recovery of
sickness benefits Provided by this Act for the same period for which daily
maternity benefits have been received;

"(d) That the maternity benefits Provided under this section shall be paid only for
the first four (4) deliveries or miscarriages;

"(e) That the SSS shall immediately reimburse the employer of one hundred percent
(100%) of the amount of maternity benefits advanced to the employee by the employer
upon receipt of satisfactory proof of such payment and legality thereof; and

"(f) That if an employee member should give birth or suffer miscarriage without the
required contributions having been remitted for her by her employer to the SSS, or
without the latter having been previously notified by the employer of the time of
the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits
which said employee member would otherwise have been entitled to.

"SEC. 15. Non-Transferability of Benefits. - The SSS shall promptly pay the
benefits Provided in this Act to such persons as may be entitled thereto in
accordance with the provisions of this Act: Provided, That the SSS shall pay the
retirement benefits on the day of contingency to qualified members who have
submitted the necessary documents at least six (6) months before: Provided,
further, That the beneficiary who is a national of a foreign country which does not
extend benefits to a Filipino beneficiary residing in the Philippines, or which is
not recognized by the Philippines, shall not be entitled to receive any benefit
under this Act: Provided, further, That notwithstanding the foregoing, where the
best interest of the SSS will be served, the Commission may direct payments without
regard to nationality or country of residence: Provided, further, That if the
recipient is a minor or a person incapable of administering his own affairs, the
Commission shall appoint a representative under such terms and conditions as it may
deem proper: Provided, further, That such appointment shall not be necessary in
case the recipient is under the custody of or living with the parents or spouse of
the member in which case the benefits shall be paid to such parents or spouse, as
representative payee of the recipient. Such benefits are not transferable and no
power of attorney or other document executed by those entitled thereto in favor of
any agent, attorney or any other person for the collection thereof on their behalf
shall be recognized, except when they are physically unable to collect personally
such benefits: Provided, further, That in case of death benefits, if no beneficiary
qualifies under this Act, said benefits shall be paid to the legal heirs in
accordance with the law of succession.

"SEC. 16. Exemption from Tax, Legal Process and Lien. -- All laws to the contrary
notwithstanding, the SSS and all its assets and properties, all contributions
collected and all accruals thereto and income or investment earnings therefrom as
well as all supplies, equipment, papers or documents shall be exempt from any tax,
assessment, fee, charge, or customs or import duty; and all benefit payments made
by the SSS shall likewise be exempt from all kinds of taxes, fees or charges, and
shall not liable to attachments, garnishments, levy or seizure by or under any
legal or equitable process whatsoever, either before or after receipt by the person
or persons entitled thereto, except to pay any debt of the member to the SSS. No
tax measure of whatever nature enacted shall apply to the SSS, unless it expressly
revokes the declared policy of the State in Section 2 hereof granting tax-exemption
to the SSS. Any tax assessment imposed against the SSS shall be null and void. (As
amended by Sec. 9, P.D. No. 24, S. 1972; and Sec. 14, P. D. No. 735, S. 1975).

"SEC. 17. Fee of Agents, Attorneys, Etc. - No agent, attorney or other person in
charge of the preparation, filing or pursuing any claim for benefit under this Act
shall demand or charge for his services any fee, and any stipulation to the
contrary shall be null and void. The retention or deduction of any amount from any
benefit granted under this Act for the payment of fees for such services is
prohibited: Provided, however, That any member of the Philippine Bar who appears as
counsel in any case heard by the Commission shall be entitled to attorneys' fees
not exceeding ten percent (10%) of the benefits awarded by the Commission, which
fees shall not be payable before the actual payment of the benefits, and any
stipulation to the contrary shall be null and void.

"Any violation of the provisions of this Section shall be punished by a fine of not
less than Five hundred pesos (P500.00) nor more than Five thousand pesos
(P5,000.00), or imprisonment for not less than six (6) months nor more than one (1)
year, or both, at the discretion of the court.

"SEC. 18. Employee's Contributions. - (a) Beginning as of the last day of the
calendar month when an employee's compulsory coverage takes effect and every month
thereafter during his employment, the employer shall deduct and withhold from such
employee's monthly salary, wage, compensation or earnings, the employee's
contribution in an amount corresponding to his salary, wage, compensation or
earnings during the month in accordance with the following schedule:

SALARY BRACKET

RANGE OF COMPENSATION

MONTHLY SALARY CREDIT

MONTHLY CONTRIBUTION

EMPLOYER

EMPLOYEE

TOTAL

1,000.00 - 1,249.99

1000

50.70

33.30

84.00

II

1,250.00 - 1,749.99

1500

76.00
50.00

126.00

III

1,750.00 - 2,249.99

2000

101.30

66.70

168.00

IV

2,250.00 - 2,749.99

2500

126.70

83.30

210.00

2,750.00 - 3,249.99

3000

152.00

100.00

252.00

VI

3,250.00 - 3,749.99

3500

177.30

116.70

294.00

VII

3,750.00 - 4,249.99

4000
202.70

133.30

336.00

VIII

4,250.00 - 4,749.99

4500

228.00

150.00

378.00

IX

4,750.00 - 5,249.99

5000

253.30

166.70

420.00

5,250.00 - 5,749.99

5500

278.70

183.70

462.40

XI

5,750.00 - 6,249.99

6000

304.00

200.00

504.00

XII

6,250.00 - 6,749.99

6500
329.30

216.78

546.00

XIII

6,750.00 - 7,249.99

7000

354.70

233.30

588.00

XIV

7,250.00 - 7,749.99

7500

380.00

250.00

630.00

XV

7,750.00 - 8.249.99

8000

403.30

266.70

672.00

XVI

8,250.00 - 8,749.99

8500

430.70

283.30

714.00

XVII

8,750.00 - OVER
9000

456.00

300.00

756.00

"The foregoing schedule of contribution shall also apply to self-employed and

voluntary members.

"The maximum monthly salary credit shall be Nine thousand pesos (P9,000.00)
effective January Nineteen hundred and ninety six (1996); Provided, That it shall
be increased by One thousand pesos (P1,000.00) every year thereafter until it shall
have reached Twelve thousand pesos (P12,000.00) by Nineteen hundred and ninety nine
(1999): Provided, further, That the minimum and maximum monthly salary credits as
well as the rate of contributions may be fixed from time to time by the Commission
through rules and regulations taking into consideration actuarial calculations and
rate of benefits, subject to the approval of the President of the Philippines.

"SEC. 19. Employer's Contributions. - (a) Beginning as of the last day of the month
when an employee's compulsory coverage takes effect and every month thereafter
during his employment, his employer shall pay, with respect to such covered
employee, the employer's contribution in accordance with the schedule indicated in
Section Eighteen of this Act. Notwithstanding any contract to the contrary, an
employer shall not deduct, directly or indirectly, from the compensation of his
employees covered by the SSS or otherwise recover from them the employer's
contributions with respect to such employees.

"(b) The remittance of such contributions by the employer shall be supported by a

quarterly collection list to be submitted to the SSS at the end of each calendar
quarter indicating the correct ID number of the employer, the correct names and the
SSS numbers of the employees and the total contributions paid for their account
during the quarter.

"SEC. 19-A. Contributions of the Self-Employed Member. - The contributions to the

SSS of the self-employed member shall be determined in accordance with Section
Eighteen of this Act: Provided, That the monthly earnings declared by the self-
employed member at the time of his registration with the SSS shall be considered as
his monthly compensation and he shall pay both the employer and the employee
contributions: Provided, further, That the contributions of self-employed persons
earning One thousand pesos (P1,000.00) monthly or below may be reduced by the
Commission.

"The monthly earnings declared by the self-employed member at the time of his
registration shall remain the basis of his monthly salary credit, unless he makes
another declaration of his monthly earnings, in which case such latest declaration
becomes the new basis of his monthly salary credit.

"SEC. 20. Government Contribution. - As the contribution of the Government to the

operation of the SSS, Congress shall annually appropriate out of any funds in the
National Treasury not otherwise appropriated, the necessary sum or sums to meet the
estimated expenses of the SSS for each ensuing year. In addition to this
contribution, Congress shall appropriate from time to time such sum or sums as may
be needed to assure the maintenance of an adequate working balance of the funds of
the SSS as disclosed by suitable periodic actuarial studies to be made of the
operations of the SSS.

"SEC. 21. Government Guarantee. -- The benefits prescribed in this Act shall not be
diminished and to guarantee said benefits the Government of the Republic of the
Philippines accepts general responsibility for the solvency of the SSS.

"SEC. 22. Remittance of Contributions. -- (a) The contributions imposed in the

preceding Section shall be remitted to the SSS within the first ten (10) days of
each calendar month following the month for which they are applicable or within
such time as the Commission may prescribe. Every employer required to deduct and to
remit such contributions shall be liable for their payment and if any contribution
is not paid to the SSS as herein prescribed, he shall pay besides the contribution
a penalty thereon of three percent (3%) per month from the date the contribution
falls due until paid. If deemed expedient and advisable by the Commission, the
collection and remittance of contributions shall be made quarterly or semi-annually
in advance, the contributions payable by the employees to be advanced by their
respective employers: Provided, That upon separation of an employee, any
contribution so paid in advance but not due shall be credited or refunded to his
employer.

"(b) The contributions payable under this Act in cases where an employer refuses or
neglects to pay the same shall be collected by the SSS in the same manner as taxes
are made collectible under the National Internal Revenue Code, as amended. Failure
or refusal of the employer to pay or remit the contributions herein prescribed
shall not prejudice the right of the covered employee to the benefits of the
coverage.

"The right to institute the necessary action against the employer may be commenced
within twenty (20) years from the time the delinquency is known or the assessment
is made by the SSS, or from the time the benefit accrues, as the case may be.

"(c) Should any person, natural or juridical, default in any payment of

contributions, the Commission may also collect the same in either of the following
ways:

"1. By an action in court, which shall hear and dispose of the case in preference
to any other civil action; or

"2. By issuing a warrant to the Sheriff of any province or city commanding him to
levy upon and sell any real and personal property of the debtor. The Sheriff's sale
by virtue of said warrant shall be governed by the same procedure prescribed for
executions against property upon judgments by a court of record.

"(d) The last complete record of monthly contributions paid by the employer or the
average of the monthly contributions paid during the past three (3) years as of the
date of filing of the action for collection shall be presumed to be the monthly
contributions payable by and due from the employer to the SSS for each of the
unpaid month, unless contradicted and overcome by other evidence: Provided, That
the SSS shall not be barred from determining and collecting the true and correct
contributions due the SSS even after full payment pursuant to this paragraph, nor
shall the employer be relieved of his liability under Section Twenty-eight of this
Act.

"SEC. 22-A. Remittance of Contributions of Self-Employed Member. - Self-employed

members shall remit their monthly contributions quarterly on such dates and
schedules as the Commission may specify through rules and regulations: Provided,
That no retroactive payment of contributions shall be allowed, except as Provided
in this Section.

"SEC. 23. Method of Collection and Payment. - The SSS shall require a complete and
proper collection and payment of contributions and proper identification of the
employer and the employee. Payment may be made in cash, checks, stamps, coupons,
tickets, or other reasonable devices that the Commission may adopt.

"SEC. 24. Employment Records and Reports. - (a) Each employer shall immediately
report to the SSS the names, ages, civil status, occupations, salaries and
dependents of all his employees who are subject to compulsory coverage: Provided,
That if an employee subject to compulsory coverage should die or become sick or
disabled or reach the age of sixty (60) without the SSS having previously received
any report or written communication about him from his employer, the said employer
shall pay to the SSS damages equivalent to the benefits to which said employee
member would have been entitled had his name been reported on time by the employer
to the SSS, except that in case of pension benefits, the employer shall be liable
to pay the SSS damages equivalent to the accumulated pension due as of the date of
settlement of the claim or to the five (5) years' pension, including dependents'
pension: Provided, further, That if the contingency occurs within thirty (30) days
from the date of employment, the employer shall be relieved of his liability for
damages: Provided, further, That any person or entity engaging the services of an
independent contractor shall be subsidiarily liable with such contractor for any
civil liability incurred by the latter under this Act: Provided, finally, That the
same person or entity engaging the services of an independent contractor shall
require such contractor to post a surety bond to guarantee the payment of the
worker's benefits.

"(b) Should the employer misrepresent the true date of employment of the employee
member or remit to the SSS contributions which are less than those required in this
Act or fail to remit any contribution due prior to the date of contingency,
resulting in a reduction of benefits, the employer shall pay to the SSS damages
equivalent to the difference between the amount of benefit to which the employee
member or his beneficiary is entitled had the proper contributions been remitted to
the SSS and the amount payable on the basis of contributions actually remitted:
Provided, That if the employee member or his beneficiary is entitled to pension
benefits, damages shall be equivalent to the accumulated pension due as of the date
of settlement of the claim or to the five (5) years' pension, whichever is higher,
including dependents' pension.

"In addition to the liability mentioned in the preceding paragraphs (a) and (b)
hereof, the employer shall also be liable for the corresponding unremitted
contributions and penalties thereon.

"(c) The records and reports duly accomplished and submitted to the SSS by the
employer or the member, as the case may be, shall be kept confidential by the SSS
except in compliance with a subpoena duces tecum issued by the Court, shall not be
divulged without the consent of the SSS President or any official of the SSS duly
authorized by him, shall be presumed correct as to the data and other matters
stated therein, unless the necessary corrections to such records and reports have
been properly made by the parties concerned before the right to the benefit being
claimed accrues, and shall be made the basis for the adjudication of the claim. If
as a result of such adjudication the SSS in good faith pays a monthly pension to a
beneficiary who is inferior in right to another beneficiary or with whom another
beneficiary is entitled to share, such payments shall discharge the SSS from
liability unless and until such other beneficiary notifies the SSS of his claim
prior to the payments.

"(d) Every employer shall keep true and accurate work records for such period and
containing such information as the Commission may prescribe, in addition to an
"Annual Register of New and Separated Employees" which shall be secured from the
SSS wherein the employer shall enter on the first day of employment or on the
effective date of separation, the names of the persons employed or separated from
employment, their SSS numbers, and such other data that the Commission may require
and said annual register shall be submitted to the SSS in the month of January of
each year. Such records shall be open for inspection by the SSS or its authorized
representatives quarterly or as often as the SSS may require.

"The SSS may also require each employer to submit, with respect to the persons in
his employ, reports needed for the effective administration of this Act.

"(e) Each employer shall require, as a condition to employment, the presentation of

a registration number secured by the prospective employee from the SSS in
accordance with such procedure as the SSS may adopt: Provided, That in case of
employees who have been assigned registration numbers by virtue of a previous
employment, such numbers originally assigned to them should be used for purposes of
this Section: Provided, further, That the issuance of such registration numbers by
the SSS shall not exempt the employer from complying with the provisions of
paragraph (a) of this Section.

"(f) Notwithstanding any law to the contrary, microfilm, or non-erasable optical

disk and other similar archival media copies of original SSS records and reports,
duly certified by the official custodian thereof, shall have the same evidentiary
value as the originals and be admissible as evidence in all legal proceedings.

"(g) Notwithstanding any law to the contrary, local government units shall, prior
to issuing any annual business license or permit, require submission of certificate
of SSS coverage and compliance with the provisions of this Act: Provided, That the
certification or clearance shall be issued by the SSS within five (5) working days
from receipt of the request.

"SEC. 24-A. Report and Registration of the Self-Employed Member. - Each covered
self-employed person shall, within thirty (30) days from the first day he started
the practice of his profession or business operations register and report to the
SSS his name, age, civil status, and occupation, average monthly net income and his
dependents.

"SEC. 25. Deposits and Disbursements. - All money paid to or collected by the SSS
every year under this Act, and all accruals thereto shall be deposited,
administered and disbursed in the same manner and under the same conditions and
requirements as Provided by law for other public special funds: Provided, That not
more than twelve percent (12%) of the total yearly contributions plus three percent
(3%) of other revenues shall be disbursed for operational expenses such as salaries
and wages, supplies and materials, depreciation and the maintenance of offices of
the SSS: Provided, further, That if the expenses in any year are less than the
maximum amount permissible, the difference shall not be availed of as additional
expenses in the following years.

"SEC. 26. Investment of Reserve Funds. - All revenues of the SSS that are not
needed to meet the current administrative and operational expenses incidental to
the carrying out of this Act shall be accumulated in a fund to be known as the
"Reserve Fund." Such portions of the Reserve Fund as are not needed to meet the
current benefit obligations thereof shall be known as the "Investment Reserve Fund"
which the Commission shall manage and invest with the skill, care, prudence and
diligence necessary under the circumstances then prevailing that a prudent man
acting in like capacity and familiar with such matters would exercise in the
conduct of an enterprise of a like character and with similar aims. Pursuant
thereto, and in line with the basic principles of safety, good yield and liquidity,
the Commission shall invest the funds to earn an annual income not less than the
average rates of treasury bills or any other acceptable market yield indicator in
any or in all of the following:

"(a) In bonds, securities, promissory notes or other evidence of indebtedness of

the Government of the Philippines, or in bonds, securities, promissory notes or
other evidence of indebtedness to which the full faith, credit and unconditional
guarantee of the Government of the Philippines is pledged;

"(b) In bonds, securities, promissory notes or other evidence of indebtedness of

the Government of the Philippines, or any agencies or instrumentalities to finance
domestic infrastructure projects such as roads, bridges, ports, telecommunications,
and other similar projects: Provided, That the instruments issued by an agency or
instrumentality of the government shall be guaranteed by the Government of the
Philippines or any government financial institution or acceptable multilateral
agency: Provided, further, That the SSS shall have priority over the revenues of
the projects: Provided, finally, That such investments shall not exceed thirty
percent (30%) of the Investment Reserve Fund;

"(c) In bonds, securities, promissory notes or other evidence of indebtedness of

government financial institutions or government corporations with acceptable credit
or guarantee: Provided, That such investments shall not exceed thirty percent (30%)
of the Investment Reserve Fund;

"(d) In bonds, securities, promissory notes or other evidence of indebtedness of

any bank doing business in the Philippines and in good standing with the Bangko
Sentral ng Pilipinas to finance loans to private corporations doing business in the
Philippines, including schools, hospitals, small-and-medium scale industries,
cooperatives and non-governmental organizations, in which case the collaterals or
securities shall be assigned to the SSS under such terms and conditions as the
Commission may prescribe: Provided, That in the case of bank deposits, they shall
not exceed at any time the unimpaired capital and surplus or total private deposits
of the depository bank, whichever is smaller: Provided, further, That said bank
shall first have been designated as a depository for this purpose by the Monetary
Board of the Bangko Sentral ng Pilipinas: Provided, finally, That such investments
shall not exceed forty percent (40%) of the Investment Reserve Fund;

"(e) In bonds, securities, promissory notes or other evidence of indebtedness of

shelter agencies of the National Government or financial intermediaries to finance
housing loans of members; and in long-term direct individual or group housing loans
giving priority to the low-income groups, up to a maximum of ninety percent (90%)
of the appraised value of the properties to be mortgaged by the borrowers; and

"In short and medium term loans to members such as salary, educational, livelihood,
marital, calamity and emergency loans: Provided, That not more than thirty five
percent (35%) of the Investment Reserve Fund at any time shall be invested for
housing purposes: Provided, further, That not more than ten percent (10%) of the
Investment Reserve Fund shall be invested in short and medium term loans;

"(f) In bonds, securities, promissory notes or other evidence of indebtedness of

educational or medical institutions to finance the construction, improvement and
maintenance of schools and hospitals and their equipment and facilities: Provided,
That such investments shall not exceed ten percent (10%) of the Investment Reserve
Fund;

"(g) In real estate property, including shares of stocks involving real estate
property, and investment secured by first mortgages on real estate or other
collaterals acceptable to the SSS: Provided, That such projects and investments
shall, in the determination of the Commission, redound to the benefit of the SSS,
its members, as well as the general public: Provided, further, That investment in
real estate property, including shares of stocks involving real estate property
shall not exceed five percent (5%) of the Investment Reserve Fund: Provided,
finally, That investments in other income earning projects and investments secured
by first mortgages or other collaterals shall not exceed twenty five percent (25%)
of the Investment Reserve Fund;
"(h) In bonds, debentures, securities, promissory notes or other evidence of
indebtedness of any prime corporation or multilateral institutions to finance
domestic projects: Provided, That the issuing or assuming entity or its
predecessors shall not have defaulted in the payment of interest on any of its
securities and that during each of any three (3) including the last two (2) of the
five (5) fiscal years next preceding the date of acquisition by the SSS of such
bonds, debentures or other evidence of indebtedness, the net earnings of the
issuing or assuming institution available for its fixed charges, as defined in this
Act, shall have been not less than one and one-quarter times the total of its fixed
charges for such year: Provided, further, That such investments shall not exceed
thirty percent (30%) of the Investment Reserve Fund;

"(i) In preferred or common shares of stocks listed or about to be listed in the

stock exchange or options or warrants to such stocks or, subject to prior approval
of the Bangko Sentral ng Pilipinas, such other risk management instruments of any
prime or solvent corporation or financial institution created or existing under the
laws of the Philippines with proven track record of profitability over the last
three (3) years and payment of dividends at least once over the same period:
Provided, That such investments shall not exceed thirty percent (30%) of the
Investment Reserve Fund;

"(j) In domestic or foreign mutual funds in existence for at least three (3) years;
Provided, That such investments shall not exceed twenty percent (20%) of the
Investment Reserve Fund: Provided, further, That investments in foreign mutual
funds shall not exceed one percent (1%) of the Investment Reserve Fund in the first
year which shall be increased by one percent (1%) for each succeeding year, but in
no case shall it exceed seven and one-half percent (7.5%) of the Investment Reserve
Fund;

"(k) In foreign currency deposits or triple "A" foreign currency denominated debts,
prime and non-speculative equities, and other Bangko Sentral ng Pilipinas approved
financial instruments or other assets issued in accordance with the existing laws
of the countries where such financial instruments are issued: Provided, That these
instruments or assets are listed in bourses of the respective countries where these
instruments or assets are issued: Provided, further, That the issuing company has
proven track of record of profitability over the last three (3) years and a record
of regular dividend pay-out over the same period: Provided, finally, That such
investments shall not exceed one percent (1%) of the Investment Reserve Fund in the
first year which shall be increased by one percent (1%) for each succeeding year,
but in no case shall it exceed seven and one-half percent (7.5%) of the Investment
Reserve Fund;

"(l) In loans secured by such collaterals like cash, government securities or

guarantees of multilateral institutions: Provided, That such investments shall not
exceed thirty percent (30%) of the Investment Reserve Fund; and

"(m) In other Bangko Sentral ng Pilipinas approved investment instruments with the
same intrinsic quality as those enumerated in paragraphs (a) to (l) hereof, subject
to the policies and guidelines which the Commission may formulate.

"No portion of the Investment Reserve Fund or income thereof shall accrue to the
general fund of the National Government or to any of its agencies or
instrumentalities, including government-owned or controlled corporations, except as
may be allowed under this Act: Provided, That no portion of the Investment Reserve
Fund shall be invested for any purpose or in any instrument, institution or
industry over and above the prescribed cumulative ceilings as follows:

40% in private securities

35% in housing

30% in real estate related investments

10% in short and medium-term member loans

30% in government financial institutions and corporations

30% in infrastructure projects

15% in any particular industry

7.5% in foreign-currency denominated investments

"SEC. 26-A. Fund Managers. - As part of its investment operations, the SSS may
appoint local or, in the absence thereof, foreign fund managers to manage the
Investment Reserve Fund, as it may deem appropriate.

"SEC. 26-B. Mortgagor Insurance Account. - (a) As part of its investment

operations, the SSS shall act as insurer of all or part of its interest on SSS
properties mortgaged to the SSS, or lives of mortgagors whose properties are
mortgaged to the SSS. For this purpose, the SSS shall establish a separate account
to be known as the "Mortgagors' Insurance Account." All amounts received by the SSS
in connection with the aforesaid insurance operations shall be placed in the
Mortgagors' Insurance Account. The assets and liabilities of the Mortgagors'
Insurance Account shall at all times be clearly identifiable and distinguishable
from the assets and liabilities in all other accounts of the SSS. Notwithstanding
any provision of law to the contrary, the assets held in the Mortgagors' Insurance
Account shall not be chargeable with the liabilities arising out of any other
business the SSS may conduct but shall be held and applied exclusively for the
benefit of the owners or beneficiaries of the insurance contracts issued by the SSS
under this paragraph.

"(b) The SSS may insure any of its interest or part thereof with any private
company or reinsurer. The Insurance Commission or its authorized representatives
shall make an examination into the financial condition and methods of transacting
business of the SSS at least once in two (2) years, but such examination shall be
limited to the insurance operation of the SSS as authorized under this paragraph
and shall not embrace the other operations of the SSS; and the report of said
examination shall be submitted to the Commission and a copy thereof shall be
furnished the Office of the President of the Philippines within a reasonable time
after the close of the examination: Provided, That for each examination, the SSS
shall pay to the Insurance Commission an amount equal to the actual expense of the
Insurance Commission in the conduct of examination, including the salaries of the
examiners and of the actuary of the Insurance Commission who have been assigned to
make such examination for the actual time spent in said examination: Provided,
further, That the general law on insurance and the rules and regulations
promulgated thereunder shall have suppletory application insofar as it is not in
conflict with this Act and its rules and regulations.

"SEC. 27. Records and Reports. - The SSS President shall keep and cause to keep
records of operations of the funds of the SSS and of disbursements thereof and all
accounts of payments made out of said funds. During the month of January of each
year, the SSS President shall prepare for submission to the President of the
Philippines and to Congress of the Philippines a report of operations of the SSS
during the preceding year, including statistical data on the number of persons
covered and benefited, their occupations and employment status, the duration and
amount of benefits paid, the finances of the SSS at the close of the said year, and
recommendations. He shall also cause to be published in two (2) newspapers of
general circulation in the Philippines a synopsis of the annual report, showing in
particular the status of the finances of the SSS and the benefits administered.

"SEC. 28. Penal Clause. - (a) Whoever, for the purpose of causing any payment to be
made under this Act, or under an agreement thereunder, where none is authorized to
be paid, shall make or cause to be made false statement or representation as to any
compensation paid or received or whoever makes or causes to be made any false
statement of a material fact in any claim for any benefit payable under this Act,
or application for loan with the SSS, or whoever makes or causes to be made any
false statement, representation, affidavit or document in connection with such
claim or loan, shall suffer the penalties Provided for in Article One hundred
seventy-two of the Revised Penal Code.

"(b) Whoever shall obtain or receive any money or check under this Act or any
agreement thereunder, without being entitled thereto with intent to defraud any
member, employer or the SSS, shall be fined not less than Five thousand pesos
(P5,000.00) nor more than Twenty thousand pesos (P20,000.00) and imprisoned for not
less than six (6) years and one (1) day nor more than twelve (12) years.

"(c) Whoever buys, sells, offers for sale, uses, transfers or takes or gives in
exchange, or pledges or gives in pledge, except as authorized in this Act or in
regulations made pursuant thereto, any stamp, coupon, ticket, book or other device,
prescribed pursuant to Section Twenty-three hereof by the Commission for the
collection or payment of contributions required herein, shall be fined not less
than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos
(P20,000.00), or imprisoned for not less than six (6) years and one (1) day nor
more than twelve (12) years, or both, at the discretion of the court.

"(d) Whoever, with intent to defraud, alters, forges, makes or counterfeits any
stamp, coupon, ticket, book or other device prescribed by the Commission for the
collection or payment of any contribution required herein, or uses, sells, lends,
or has in his possession any such altered, forged or counterfeited materials, or
makes, uses, sells or has in his possession any such altered, forged, material in
imitation of the material used in the manufacture of such stamp, coupon, ticket,
book or other device, shall be fined not less than Five thousand pesos (P5,000.00)
non more than Twenty thousand pesos (P20,000.00) or imprisoned for not less than
six years (6) and one (1) day nor more than twelve (12) years, or both, at the
discretion of the court.

"(e) Whoever fails or refuses to comply with the provisions of this Act or with the
rules and regulations promulgated by the Commission, shall be punished by a fine of
not less than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos
(P20,000.00), or imprisonment for not less than six (6) years and one (1) day nor
more than twelve (12) years, or both, at the discretion of the court: Provided,
That where the violation consists in failure or refusal to register employees or
himself, in case of the covered self-employed or to deduct contributions from the
employees' compensation and remit the same to the SSS, the penalty shall be a fine
of not less Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos
(P20,000.00) and imprisonment for not less than six (6) years and one (1) day nor
more than twelve (12) years.

"(f) If the act or omission penalized by this Act be committed by an association,

partnership, corporation or any other institution, its managing head, directors or
partners shall be liable for the penalties Provided in this Act for the offense.

"(g) Any employee of the SSS who receives or keeps funds or property belonging,
payable or deliverable to the SSS and who shall appropriate the same, or shall take
or misappropriate, or shall consent, or through abandonment or negligence, shall
permit any other person to take such property or funds, wholly or partially, or
shall otherwise be guilty of misappropriation of such funds or property, shall
suffer the penalties Provided in Article Two hundred seventeen of the Revised Penal
Code.

"(h) Any employer who, after deducting the monthly contributions or loan
amortizations from his employee's compensation, fails to remit the said deduction
to the SSS within thirty (30) days from the date they became due, shall be presumed
to have misappropriated such contributions or loan amortizations and shall suffer
the penalties Provided in Article Three hundred fifteen of the Revised Penal Code.

"(i) Criminal action arising from a violation of the provisions of this Act may be
commenced by the SSS or the employee concerned either under this Act or in
appropriate cases under the Revised Penal Code: Provided, That such criminal action
may be filed by the SSS in the city or municipality where the SSS office is
located, if the violation was committed within its territorial jurisdiction or in
Metro Manila, at the option of the SSS.

"SEC. 29. Government Aid. - The establishment of the SSS shall not disqualify the
members and employers from receiving such government assistance, financial or
otherwise, as may be Provided.

"SEC. 30. Transitory Clause. - Any employer who is delinquent or has not remitted
all contributions due and payable to the SSS may, within six (6) months from the
effectivity of this Act, remit said contributions or submit a proposal to pay the
same in installment within a period of not more than twelve (12) months from the
effectivity of this Act without incurring the prescribed penalty, subject to the
implementing rules and regulations which the Commission may prescribe: Provided,
That the employer submits the corresponding collection lists together with the
remittance or proposal to pay in installments: Provided, further, That in case the
employer fails to remit contributions within the six-month grace period or defaults
in the payment of any amortization Provided the approved proposal, the prescribed
penalty shall be imposed from the time the contributions first became due as
Provided in Section 22 (a) hereof."

Section 2. Separability Clause. - If any provision of this Act is declared invalid,

the other provisions not affected thereby shall remain valid.

Section 3. Repealing Clause. - All laws, proclamations, executive orders, rules and
regulations or parts thereof inconsistent with this Act are hereby repealed,
modified or amended accordingly: Provided, That no person shall be deemed to be
vested with any property or other right by virtue of the enactment or operation of
this Act.

Section 4. Effectivity Clause. - This Act shall take effect fifteen (15) days after
its complete publication in the Official Gazette or in at least two (2) national
newspapers of general circulation whichever comes earlier.

Approved: May 01, 1997

Republic Act No. 8291 May 30, 1997

AN ACT AMENDING PRESIDENTIAL DECREE NO. 1146, AS AMENDED, EXPANDING AND INCREASING
THE COVERAGE AND BENEFITS OF THE GOVERNMENT SERVICE INSURANCE SYSTEM, INSTITUTING
REFORMS THEREIN AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled::
Section 1. Presidential Decree No. 1146, as amended, otherwise known as the
"Revised Government Service Insurance Act of 1977", is hereby further amended to
read as follows:

"SECTION 1. Title. - The title of this Act shall be: "The Government Service
Insurance System Act of 1997."

"A. DEFINITIONS

"SEC. 2. Definition of terms.- Unless the context otherwise indicates, the

following terms shall mean:

"(a) GSIS- The Government Service Insurance System created by Commonwealth Act No.
186;

"(b) Board- The Board of Trustees of the Government Service Insurance System;

"(c) Employer- 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;

"(d) Employee or Member- Any person receiving compensation while in the service of
an employer as defined herein, whether by election or appointment, irrespective of
status of appointment, including barangay and Sanggunian officials;

"(e) Active Member- A member who is not separated from the service;

"(f) Dependents- Dependents shall be the following: (a) the legitimate spouse
dependent for support upon the member or pensioner; (b) the legitimate,
legitimated, legally adopted child, including the illegitimate child, who is
unmarried, not gainfully employed, 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;

"(g) Primary beneficiaries- The legal dependent spouse until he/she remarries and
the dependent children;

"(h) Secondary beneficiaries- The dependent parents and, subject to the

restrictions on dependent children, the legitimate descendants;

"(i) Compensation- The basic pay or salary received by an employee, pursuant to his
election/appointment, excluding per diems, bonuses, overtime pay, honoraria,
allowances and any other emoluments received in addition to the basic pay which are
not integrated into the basic pay under existing laws;

"(j) Contribution- The amount payable to the GSIS by the member and the employer in
accordance with Section 5 of this Act;

"(k) Current Daily Compensation- 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;

"(l) Average Monthly Compensation (AMC)- The quotient arrived at after dividing the
aggregate compensation received by the member during his last thirty-six (36)
months of service preceding his separation/retirement/ disability/death by thirty-
six (36), or by the number of months he received such compensation if he has less
than thirty-six (36) months of service: Provided, That the average monthly
compensation shall in no case exceed the amount and rate as may be respectively set
by the Board under the rules and regulations implementing this Act as determined by
the actuary of the GSIS: Provided, further, That initially the average monthly
compensation shall not exceed Ten thousand pesos (P10,000.00), and premium shall be
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 the compensation above the AMC limit;

"(m) Revalued average monthly compensation- An amount equal to one hundred seventy
percent (170%) of the first One thousand pesos (P1,000.00) of the average monthly
compensation plus one hundred percent (100%) of the average monthly compensation in
excess of One thousand pesos (P1,000.00);

"(n) Lump sum- The basic monthly pension multiplied by sixty (60);

"(o) Pensioner- Any person receiving old-age permanent total disability pension or
any person who has received the lump sum excluding one receiving survivorship
pension benefits as defined in Section 20 of this Act;

"(p) Gainful Occupation- Any productive activity that provided the member with
income at least equal to the minimum compensation of government employees;

"(q) Disability- Any loss or impairment of the normal functions of the physical
and/or mental faculty of a member which reduces or eliminates his/her capacity to
continue with his/her current gainful occupation or engage in any other gainful
occupation;

"(r) Total Disability- Complete incapacity to continue with his present employment
or engage in any gainful occupation due to the loss or impairment of the normal
functions of the physical and/or mental faculties of the member;

"(s) Permanent Total Disability- Accrues or arises when recovery from the
impairment mentioned in Section 2 (Q) is medically remote;

"(t) Temporary Total Disability- Accrues or arises when the impaired physical
and/or mental faculties can be rehabilitated and/or restored to their normal
functions;

"(u) Permanent Partial Disability- Accrues or arises upon the irrevocable loss or
impairment of certain portion/s of the physical faculties, despite which the member
is able to pursue a gainful occupation.

"B. MEMBERSHIP IN THE GSIS

"SEC. 3. Compulsory Membership. - Membership in the GSIS shall be compulsory for

all employees receiving compensation who have not reached the compulsory retirement
age, irrespective of employment status, except members of the Armed Forces of the
Philippines and the Philippine National Police, subject to the condition that they
must settle first their financial obligation with the GSIS, and contractuals who
have no employer and employee relationship with the agencies they serve.

"Except for the members of the judiciary and constitutional commissions who shall
have life insurance only, all members of the GSIS shall have life insurance,
retirement, and all other social security protections such as disability,
survivorship, separation, and unemployment benefits.

"SEC. 4. Effect of Separation from the Service. - A member separated from the
service shall continue to be a member, and shall be entitled to whatever benefits
he has qualified to in the event of any contingency compensable under this Act.
"C. SOURCES OF FUNDS

"SEC. 5. Contributions. - (a) It shall be mandatory for the member and employer to
pay the monthly contributions specified in the following schedule:

"Monthly Compensation

Percentage of Monthly Compensation Payable by

Member

Employer

I.

Maximum Average
Monthly Compensation
(AMC) Limit and Below

9.0%

12.0%

II.

Over the Maximum AMC Limit

-Up to the Maximum AMC Limit

9.0%

12.0%

-In Excess of the AMC Limit

2.0%

12.0%

"Members of the judiciary and constitutional commissioners shall pay three percent
(3%) of their monthly compensation as personal share and their employers a
corresponding three percent (3%) share for their life insurance coverage.

"(b) The employer shall include in its annual appropriation the necessary amounts
for its share of the contributions indicated above, plus any additional premiums
that may be required on account of the hazards or risks of its employees
occupation.

"(c) It shall be mandatory and compulsory for all employers to include the payment
of contributions in their annual appropriations. Penal sanctions shall be imposed
upon employers who fail to include the payment of contributions in their annual
appropriations or otherwise fail to remit the accurate/exact amount of
contributions on time, or delay the remittance of premium contributions to the
GSIS. The heads of offices and agencies shall be administratively liable for non-
remittance or delayed remittance of premium contributions to the GSIS.

"SEC. 6. Collection and Remittance of Contributions. - (a) The employer shall

report to the GSIS the names of all its employees, their corresponding employment
status, positions, salaries and such other pertinent information, including
subsequent changes therein, if any, as may be required by the GSIS; the employer
shall deduct each month from the monthly salary or compensation of each employee
the contribution payable by him in accordance with the schedule prescribed in the
rules and regulations implementing this Act.

"(b) Each employer shall remit directly to the GSIS the employees and employers
contributions within the first ten (10) days of the calendar month following the
month to which the contributions apply. The remittance by the employer of the
contribution to the GSIS shall take priority over and above the payment of any and
all obligations, except salaries and wages of its employees.

"SEC. 7. Interest on Delayed Remittances. - Agencies which delay the remittance of

any and all monies due the GSIS shall be charged interests as may be prescribed by
the Board but not less than two percent (2%) simple interest per month. Such
interest shall be paid by the employers concerned.

"SEC. 8. Government Guarantee. - The government of the Republic of the Philippines

hereby guarantees the fulfillment of the obligations of the GSIS to its members as
and when they fall due.

"D. BENEFITS

"SEC. 9. Computation of the Basic Monthly Pension. - (a) The basic monthly pension
is equal to:

"1) thirty-seven and one-half percent (37.5%) of the revalued average monthly
compensation; plus

"2) two and one-half percent (2.5%) of said revalued average monthly compensation
for each year of service in excess of (15) years: Provided, That the basic monthly
pension shall not exceed ninety percent (90%) of the average monthly compensation.

"(b) The basic monthly pension may be adjusted upon the recommendation of the
President and General Manager of the GSIS and approved by the President of the
Philippines in accordance with the rules and regulations prescribed by the GSIS:
Provided, however, that the basic monthly pension shall not be less than One
thousand and three hundred pesos (P1,300.00): Provided, further, that the basic
monthly pension for those who have rendered at least twenty (20) years of service
after the effectivity of this Act shall not be less than Two thousand four hundred
pesos (P2,400.00) a month.

"SEC. 10. Computation of Service. - (a) The computation of service for the purpose
of determining the amount of benefits payable under this Act shall be from the date
of original appointment/election, including periods of service at different times
under one or more employers, those performed overseas under the authority of the
Republic of the Philippines, and those that may be prescribed by the GSIS in
coordination with the Civil Service Commission.

"(b) All service credited for retirement, resignation or separation for which
corresponding benefits have been awarded under this Act or other laws shall be
excluded in the computation of service in case of reinstatement in the service of
an employer and subsequent retirement or separation which is compensable under this
Act.
"For the purpose of this section, the term service shall include full-time service
with compensation: Provided, that part-time and other services with compensation
may be included under such rules and regulations as may be prescribed by the GSIS.

"SEPARATION BENEFITS

"SEC. 11. Separation Benefits. - The separation benefits shall consist of: (a) a
cash payment equivalent to one hundred percent (100%) of his average monthly
compensation for each year of service he paid contributions, but not less than
Twelve thousand pesos (P12,000) payable upon reaching sixty (60) years of age upon
separation, whichever comes later: Provided, that the member resigns or separates
from the service after he has rendered at least three (3) years of service but less
than fifteen (15) years; or

"(b) a cash payment equivalent to eighteen (18) times his basic monthly pension 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 sixty (60):
Provided, that the member resigns or separates from the service after he has
rendered at least fifteen (15) years of service and is below sixty (60) years of
age at the time of resignation or separation.

"SEC. 12. Unemployment or Involuntary Separation Benefits. - Unemployment benefits

in the form of monthly cash payments equivalent to fifty percent (50%) of the
average monthly compensation shall be paid to a permanent employee who is
involuntarily separated from the service due to the abolition of his office or
position usually resulting from reorganization: Provided, That he has been paying
integrated contributions for at least one (1) year prior to separation.
Unemployment benefits shall be paid in accordance with the following schedules:

"Contributions Made 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

"The first payment shall be equivalent to two (2) monthly benefits. A seven-day (7)
waiting period shall be imposed on succeeding monthly payments.

"All accumulated unemployment benefits paid to the employee during his entire
membership with the GSIS shall be deducted from voluntary separation benefits.

"The GSIS shall prescribe the detailed guidelines in the operationalization of this
section in the rules and regulations implementing this Act.

"RETIREMENT BENEFITS

"SEC. 13. Retirement Benefits. - (a) Retirement benefits shall be:

"(1) the lump sum payment as defined in this Act payable at the time of retirement
plus an old-age pension benefit equal to the basic monthly pension payable monthly
for life, starting upon expiration of the five-year (5) guaranteed period covered
by the lump sum; or

"(2) cash payment equivalent to eighteen (18) months of his basic monthly pension
plus monthly pension for life payable immediately with no five-year (5) guarantee.

"(b) Unless the service is extended by appropriate authorities, retirement shall be

compulsory for an employee of sixty-five (65) years of age with at least fifteen
(15) years of service: Provided, That if he has less than fifteen (15) years of
service, he may be allowed to continue in the service in accordance with existing
civil service rules and regulations.

"SEC. 13-A. Conditions for Entitlement. - A member who retires from the service
shall be entitled to the retirement benefits enumerated in paragraph (a) of Section
13 hereof: Provided, That:

(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.

"SEC. 14. Periodic Pension Adjustment. - The monthly pension of all pensioners
including all those receiving survivorship pension benefits shall be periodically
adjusted as may be recommended by the GSIS actuary and approved by the Board in
accordance with the rules and regulations prescribed by the GSIS.

"PERMANENT DISABILITY BENEFITS

"SEC. 15. General Conditions for Entitlement. - A member who suffers permanent
disability for reasons not due to his grave misconduct, notorious negligence,
habitual intoxication, or willful intention to kill himself or another, shall be
entitled to the benefits provided for under Sections 16 and 17 immediately
following, subject to the corresponding conditions thereof.

"SEC. 16. Permanent Total Disability Benefits. - (a) If the permanent disability is
total, he shall receive a monthly income benefit for life equal to the basic
monthly pension effective from the date of disability: Provided, That:

(1) he is in the service at the time of disability; or

(2) if separated from the service, he 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 his disability: Provided, further, That if at the time of disability, he was in
the service and has paid a total of at least one hundred eighty (180) monthly
contributions, in addition to the monthly income benefit, he shall receive a cash
payment equivalent to eighteen (18) times his basic monthly pension: Provided,
finally, That a member cannot enjoy the monthly income benefit for permanent
disability and the old-age retirement simultaneously.

"(b) If a member who suffers permanent total disability does not satisfy conditions
(1) and (2) in paragraph (a) of this section but has rendered at least three (3)
years of service at the time of his disability, he shall be advanced the cash
payment equivalent to one hundred percent (100%) of his average monthly
compensation for each year of service he paid contributions, but not less than
Twelve thousand pesos (P12,000.00) which should have been his separation benefit.

"(c) Unless the member has reached the minimum retirement age, disability benefit
shall be suspended when:

"(1) he is reemployed; or
"(2) he recovers from his disability as determined by the GSIS, whose decision
shall be final and binding; or

"(3) he fails to present himself for medical examination when required by the GSIS.

"(d) The following disabilities shall be deemed total and permanent:

"(1) complete loss of sight of both eyes;

"(2) loss of two (2) limbs at or above the ankle or wrist;

"(3) permanent complete paralysis of two (2) limbs;

"(4) brain injury resulting in incurable imbecility or insanity; and

"(5) such other cases as may be determined by the GSIS.

"SEC. 17. Permanent Partial Disability Benefits. - (a) If the disability is

partial, he shall receive a cash payment in accordance with a schedule of
disabilities to be prescribed by the GSIS: Provided, That he satisfies either
conditions (1) or (2) of Section 16 (a);

"(b) The following disabilities shall be deemed permanent partial:

"(1) complete and permanent loss of the use of:

(i) any finger

(ii) any toe

(iii) one arm

(iv) one hand

(v) one foot

(vi) one leg

(vii) one or both ears

(viii) hearing of one or both ears

(ix) sight of both eyes

"(2) such other cases as my be determined by the GSIS.

"TEMPORARY DISABILITY BENEFITS

"SEC. 18. Temporary Total Disability Benefits. - (a) A member who suffers temporary
total disability for reasons not due to any of the conditions enumerated in Section
15 hereof shall be entitled to seventy-five percent (75%) of his current daily
compensation for each day or fraction thereof of temporary disability benefit not
exceeding one hundred twenty (120) days in one calendar year after exhausting all
his sick leave credits and collective bargaining agreement sick leave benefits, if
any, but not earlier than the fourth day of his temporary total disability:
Provided, That:

"(1) he is in the service at the time of his disability; or

"(2) if separated, he has rendered at least three (3) years of service and has paid
at least six (6) monthly contributions in the twelve-month period immediately
preceding his disability.

"Provided, however, That a member cannot enjoy the temporary total disability
benefit and sick leave pay simultaneously: Provided, further, That if the
disability requires more extensive treatment that lasts beyond one hundred twenty
(120) days, the payment of the temporary total disability benefit may be extended
by the GSIS but not to exceed a total of two hundred forty (240) days.

"(b) The temporary total disability benefit shall in no case be less than Seventy
pesos (P70.00) a day.

"(c) The notices required of the member and the employer, the mode of payment, and
the other requirements for entitlement to temporary total disability benefits shall
be provided in the rules and regulations to be prescribed by the GSIS.

"SEC. 19. Non-scheduled Disability. - For injuries or illnesses resulting in a

disability not listed in the schedule of partial/total disability provided herein,
the GSIS shall determined the nature of the disability and the corresponding
benefits therefor.

"SURVIVORSHIP BENEFITS

"SEC. 20. Survivorship Benefits. - When a member or pensioner dies, the

beneficiaries shall be entitled to survivorship benefits provided in Sections 21
and 22 hereunder subject to the conditions therein provided for. The survivorship
pension shall consist of:

(1) the basic survivorship pension which is fifty percent (50%) of the basic
monthly pension; and

(2) the dependent childrens pension not exceeding fifty percent (50%) of the basic
monthly pension

"SEC. 21. Death of a Member. - (a) Upon the death of a member, the primary
beneficiaries shall be entitled to:

(1) survivorship pension: Provided, That the deceased:

(i) was in the service at the time of his death; or

(ii) if separated from the service, has at least three (3) years of service at the
time of his death and has paid thirty-six (36) monthly contributions within the
five-year period immediately preceding his death; or has paid a total of at least
one hundred eighty (180) monthly contributions prior to his death; or

(2) the survivorship pension plus a cash payment equivalent to one hundred percent
(100%) of his average monthly compensation for every year of service: Provided,
That the deceased was in the service at the time of his death with at least three
(3) years of service; or

(3) a cash payment equivalent to one hundred percent (100%) of his average monthly
compensation for each year of service he paid contributions, but not less than
Twelve thousand pesos (P12,000.00): Provided, That the deceased has rendered at
least three (3) years of service prior to his death but does not qualify for the
benefits under item (1) or (2) of this paragraph.

(b) The survivorship pension shall be paid as follows:

(1) when the dependent spouse is the only survivor, he/she shall receive the basic
survivorship pension for life or until he/she remarries;

(2) when only dependent children are the survivors, they shall be entitled to the
basic survivorship pension for as long as they are qualified, plus the dependent
childrens pension equivalent to ten percent (10%) of the basic monthly pension for
every dependent child not exceeding five (5), counted from the youngest and without
substitution;

(3) when the survivors are the dependent spouse and the dependent children, the
dependent spouse shall receive the basic survivorship pension for life or until
he/she remarries, and the dependent children shall receive the dependent childrens
pension mentioned in the immediately preceding paragraph (2) hereof.

(c) In the absence of primary beneficiaries, the secondary beneficiaries shall be

entitled to:

(1) the cash payment equivalent to one hundred percent (100%) of his average
monthly compensation for each year of service he paid contributions, but not less
than Twelve thousand pesos (P12,000.00): Provided, That the member is in the
service at the time of his death and has at least three (3) years of service; or

(2) in the absence of secondary beneficiaries, the benefits under this paragraph
shall be paid to his legal heirs.

(d) For purposes of the survivorship benefits, legitimate children shall include
legally adopted and legitimated children.

"SEC. 22. Death of a Pensioner. - Upon the death of an old-age pensioner or a

member receiving the monthly income benefit for permanent disability, the qualified
beneficiaries shall be entitled to the survivorship pension defined in Section 20
of this Act, subject to the provisions of paragraph (b) of Section 21 hereof. When
the pensioner dies within the period covered by the lump sum, the survivorship
pension shall be paid only after the expiration of the said period.

"FUNERAL BENEFITS

"SEC. 23. Funeral Benefits. - The amount of the funeral benefits shall be
determined and specified by the GSIS in the rules and regulations but shall not be
less than Twelve thousand pesos (P12,000.00): Provided, That it shall be increased
to at least Eighteen thousand pesos (P18,000.00) after five (5) years and shall be
paid upon the death of:

(a) an active member as defined under Section 2 (e) of this Act; or

(b) a member who has been separated from the service, but who may be entitled to
future benefit pursuant to Section 4 of this Act; or

(c) a pensioner, as defined in Section 2 (o) of this Act; or

(d) a retiree who at the time of his retirement was of pensionable age under this
Act but who opted to retire under Republic Act No. 1616.

"LIFE INSURANCE BENEFITS

"SEC. 24. Compulsory Life Insurance. - 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.

"SEC. 25. Dividends. - An annual dividend may be granted to all members of the GSIS
whose life insurance is in force for at least one (1) year in accordance with a
dividends allocation formula to be determined by the GSIS.

"SEC. 26. Optional Insurance. - Subject to the rules and regulations prescribed by
the GSIS, a member may apply for insurance and/or pre-need coverage embracing life,
health, hospitalization, education, memorial plans, and such other plans as may be
designed by the GSIS, for himself and/or his dependents. Any employer may likewise
apply for group insurance coverage for its employees. The payment of the
premiums/installments for optional insurance and pre-need products may be made by
the insured or his employer and/or any person acceptable to the GSIS.

"SEC. 27. Reinsurance. - The GSIS may reinsure any of its interests or part thereof
with any private company or reinsurer whether domestic of foreign: Provided, That
the GSIS shall submit an annual report on its reinsurance operations to the
Insurance Commission.

"E. ADJUDICATION OF CLAIMS AND DISPUTES

"SEC. 28. Prescription. - Claims for benefits under this Act except for life and
retirement shall prescribe after four (4) years from the date of contingency.

"SEC. 29. Facility of Payment. - The GSIS shall prescribe rules and regulations to
facilitate payment of benefits, proceeds, and claims under this Act and any other
laws administered by the GSIS. Payments made by the GSIS prior to its receipt of an
adverse claim, to a beneficiary or claimant subsequently found not entitled
thereto, shall not bar the legal and eligible recipient to his right to demand the
payment of benefits, proceeds, and claims from the GSIS, who shall, however, have a
right to institute the appropriate action in a court of law against the ineligible
recipient.

"SEC. 30. Settlement of Disputes. - The GSIS shall have original and exclusive
jurisdiction to settle any disputes arising under this Act and any other laws
administered by the GSIS.

The Board may designate any member of the Board, or official of the GSIS who is a
lawyer, to act as hearing officer to receive evidence, make findings of fact and
submit recommendations, together with all documentary and testimonial evidence to
the Board within thirty (30) working days from the time the parties have closed
their respective evidence and filed their last pleading. The Board shall decide the
case within thirty (30) days from the receipt of the hearing officers findings and
recommendations. The cases heard directly by the Board shall be decided within
thirty (30) working days from the time they are submitted by the parties for
decision.

"SEC. 31. Appeals. - Appeals from any decision or award of the Board shall be
governed by Rules 43 and 45 of the 1997 Rules of Civil Procedure adopted by the
Supreme Court on April 8, 1997 which will take effect on July 1, 1997: Provided,
That pending cases and those filed prior to July 1, 1997 shall be governed by the
applicable rules of procedure: Provided, further, That the appeal shall take
precedence over all other cases except criminal cases when the penalty of life
imprisonment or death or reclusion perpetua is imposable.

The appeal shall not stay the execution of the order or award unless ordered by the
Board, by the Court of Appeals or by the Supreme Court and the appeal shall be
without prejudice to the special civil action of certiorari when proper.

"SEC. 32. Execution of Decision. - When no appeal is perfected and there is no

order to stay by the Board, by the Court of Appeals or by the Supreme Court, any
decision or award of the Board shall be enforced and executed in the same manner as
decisions of the Regional Trial Court. For this purpose, the Board shall have the
power to issue to the city or provincial sheriff or its appointed sheriff such
writs of execution as may be necessary for the enforcement of such decision or
award, and any person who shall fail or refuse to comply with such decision, award,
writ or process after being required to do so shall, upon application by the GSIS,
be punished for contempt.

"SEC. 33. Oaths, Witnesses, and Production of Records. - When authorized by the
Board, an official or employee of the GSIS shall have the power to administer oath
and affirmation, take deposition, certify to official acts, and issue subpoena ad
testificandum and subpoena duces tecum to compel the attendance of witnesses and
the production of books, papers, correspondences, and other records deemed
necessary as evidence in connection with any question arising under this Act. Any
case of contumacy shall be dealt with in accordance with the provisions of Section
580 of the Revised Administrative Code.

"F. FUNDS OF THE GSIS

"SEC. 34. Funds. - All contributions payable under Section 5 of this Act together
with the earnings and accruals thereon shall constitute the GSIS Social Insurance
Fund. The said fund shall be used to finance the benefits administered by the GSIS
under this Act. In addition, the GSIS shall administer the optional insurance fund
for the insurance coverage described in Section 26 hereof, the Employees
Compensation Insurance Fund created under P.D. 626, as amended, General Insurance
Fund created under Act No. 656, as amended, and such other special funds existing
or that may be created for special groups or persons rendering services to the
government. The GSIS shall maintain the required reserves to guarantee the
fulfillment of its obligations under this Act.

The funds of the GSIS shall not be used for purposes other than what are provided
for under this Act. Moreover, no portion of the funds of the GSIS or income thereof
shall accrue to the General Fund of the national government and its political
subdivisions, instrumentalities and other agencies including government-owned and
controlled corporations except as may be allowed under this Act.

"SEC. 35. Deposits and Disbursements. - All revenues collected and all accruals
thereto shall be deposited, administered and disbursed in accordance with the law.
A maximum expense loading of twelve percent (12%) of the yearly revenues from all
sources may be disbursed for administrative and operational expenses except as may
be otherwise approved by the President of the Philippines on the basis of actuarial
and management studies.

"SEC. 36. Investment of Funds. - The funds of the GSIS which are not needed to meet
the current obligations may be invested under such terms and conditions and rules
and regulations as may be prescribed by the Board: Provided, That investments shall
satisfy the requirements of liquidity, safety/security and yield in order to ensure
the actuarial solvency of the funds of the GSIS: Provided, further, That the GSIS
shall submit an annual report on all investments made to both Houses of Congress of
the Philippines, to wit:

(a) in interest-bearing bonds or securities or other evidence of indebtedness of

the Government of the Philippines;

(b) in interest-bearing deposits or securities in any domestic bank doing business

in the Philippines: Provided, That in the case of such deposits, there shall not
exceed at any time the unimpaired capital and surplus or total private deposits of
the depository bank, whichever is smaller: Provided, further, That the said bank
has prior designation as a depository for the purpose by the Monetary Board of the
Central Monetary Authority;

(c) in direct housing loans to members and group housing projects secured by first
mortgage, giving priority to the low income groups and in short and medium term
loans to members such as salary, policy, educational, emergency stock purchase plan
and other similar loans: Provided, That no less than forty percent (40%) of the
investible fund of the GSIS Social Insurance Fund shall be invested for these
purposes;

(d) in bonds, securities, promissory notes or other evidence of indebtedness of

educational or medical institutions to finance the construction, improvement and
maintenance of schools and hospitals;

(e) in real estate property including shares of stocks involving real state
property and investments secured by first mortgages on real estate or other
collaterals acceptable to the GSIS: Provided, That such investment shall, in the
determination of the Board, redound to the benefit of the GSIS, its members as well
as the general public;

(f) in debt instruments and other securities traded in the secondary markets;

(g) in loans to, or in bonds, debentures, promissory notes or other evidence of

indebtedness of any solvent corporation created or existing under the laws of the
Philippines;

(h) in common and preferred stocks of any solvent corporation or financial

institution created or existing under the laws of the Philippines listed in the
stock exchange with proven track record of profitability over the last three (3)
years and payment of dividends at least once over the same period;

(i) in domestic mutual funds including investments related to the operations of

mutual funds; and

(j) in foreign mutual funds and in foreign currency deposits or foreign currency-
denominated debts, non-speculative equities and other financial instruments or
other assets issued in accordance with existing laws of the countries where such
financial instruments are issued: Provided, That these instruments or assets are
listed in bourses of the respective countries where these instruments or assets are
issued: Provided, further, That the issuing company has proven track record of
profitability over the last three (3) years and payment of dividends at least once
over the same period.

"SEC. 37. Records and Reports. - The GSIS shall keep and cause to keep such records
as may be necessary for the purpose of making actuarial studies, calculations and
valuations of the funds of the GSIS including such data needed in the computation
of rates of disability, mortality, morbidity, separation and retirement among the
members and any other information useful for the adjustment of the benefits of the
members. The GSIS shall maintain appropriate books of accounts to record its
assets, liabilities, income, expenses, receipts and disbursement of funds and other
financial transactions and operations.

"SEC. 38. Examination and Valuation of the Funds. - The GSIS shall make a periodic
actuarial examination and valuation of its funds in accordance with accepted
actuarial principles.

"SEC. 39. Exemption from Tax, Legal Process and Lien. - It is hereby declared to be
the policy of the State that the actuarial solvency of the funds of the GSIS shall
be preserved and maintained at all times and that contribution rates necessary to
sustain the benefits under this Act shall be kept as low as possible in order not
to burden the members of the GSIS and their employers. Taxes imposed on the GSIS
tend to impair the actuarial solvency of its funds and increase the contribution
rate necessary to sustain the benefits of this Act. Accordingly, notwithstanding
any laws to the contrary, the GSIS, its assets, revenues including all accruals
thereto, and benefits paid, shall be exempt from all taxes, assessments, fees,
charges, or duties of all kinds. These exemptions shall continue unless expressly
and specifically revoked and any assessment against the GSIS as of the approval of
this Act are hereby considered paid. Consequently, all laws, ordinances,
regulations, issuances, opinions or jurisprudence contrary to or in derogation of
this provision are hereby deemed repealed, superseded and rendered ineffective and
without legal force and effect.

"Moreover, these exemptions shall not be affected by subsequent laws to the

contrary unless this section is expressly, specifically and categorically revoked
or repealed by law and a provision is enacted to substitute or replace the
exemption referred to herein as an essential factor to maintain or protect the
solvency of the fund, notwithstanding and independently of the guaranty of the
national government to secure such solvency or liability.

"The funds and/or the properties referred to herein as well as the benefits, sums
or monies corresponding to the benefits under this Act shall be exempt from
attachment, garnishment, execution, levy or other processes issued by the courts,
quasi-judicial agencies or administrative bodies including Commission on Audit
(COA) disallowances and from all financial obligations of the members, including
his pecuniary accountability arising from or caused or occasioned by his exercise
or performance of his official functions or duties, or incurred relative to or in
connection with his position or work except when his monetary liability,
contractual or otherwise, is in favor of the GSIS.

"G. ADMINISTRATION

"SEC. 40. Implementing Body. - The Government Service Insurance System as created
under Commonwealth Act No. 186 shall implement the provisions of this Act.

"SEC. 41. Powers and Functions of the GSIS. - The GSIS shall exercise the following
powers and functions:

(a) to formulate, adopt, amend and/or rescind such rules and regulations as may be
necessary to carry out the provisions and purposes of this Act, as well as the
effective exercise of the powers and functions, and the discharge of duties and
responsibilities of the GSIS, its officers and employees;

(b) to adopt or approve the annual and supplemental budget of receipts and
expenditures including salaries and allowances of the GSIS personnel; to authorize
such capital and operating expenditures and disbursements of the GSIS as may be
necessary and proper for the effective management and operation of the GSIS;
(c) to invest the funds of the GSIS, directly or indirectly, in accordance with the
provisions of this Act;

(d) to acquire, utilize or dispose of, in any manner recognized by law, real or
personal property in the Philippines or elsewhere necessary to carry out the
purposes of this Act;

(e) to conduct continuing actuarial and statistical studies and valuations to

determine the financial condition of the GSIS and taking into consideration such
studies and valuations and the limitations herein provided, re-adjust the benefits,
contributions, premium rates, interest rates or the allocation or re-allocation of
the funds to the contingencies covered;

(f) to have the power of succession;

(g) to sue and be sued;

(h) to enter into, make, perform and carry out contracts of every kind and
description with any person, firm or association or corporation, domestic or
foreign;

(i) to carry on any other lawful business whatsoever in pursuance of, or in

connection with the provisions of this Act;

(j) to have one or more offices in and outside of the Philippines, and to conduct
its business and exercise its powers throughout and in any part of the Republic of
the Philippines and/or in any or all foreign countries, states and territories:
Provided, That the GSIS shall maintain a branch office in every province where
there exists a minimum of fifteen thousand (15,000) membership;

(k) to borrow funds from any source, private or government, foreign or domestic,
only as an incident in the securitization of housing mortgages of the GSIS and on
account of its receivables from any government or private entity;

(l) to invest, own or otherwise participate in equity in any establishment, firm or

entity;

(m) to approve appointments in the GSIS except appointments to positions which are
policy determining, primarily confidential or highly technical in nature according
to the Civil Service rules and regulations: Provided, That all positions in the
GSIS shall be governed by the compensation and position classification system and
qualifications standards approved by the GSIS Board of Trustees based on a
comprehensive job analysis and audit of actual duties and responsibilities:
Provided, further, That the compensation plan shall be comparable with the
prevailing compensation plans in the private sector and shall be subject to the
periodic review by the Board no more than once every four (4) years without
prejudice to yearly merit reviews or increases based on productivity and
profitability;

(n) to design and adopt an Early Retirement Incentives Plan (ERIP) and/or financial
assistance for the purpose of retirement for its own personnel;

(o) to fix and periodically review and adjust the rates of interest and other terms
and conditions for loans and credits extended to members or other persons, whether
natural or juridical;

(p) to enter into agreement with the Social Security System or any other entity,
enterprise, corporation or partnership for the benefit of members transferring from
one system to another subject to the provisions of Republic Act No. 7699, otherwise
known as the Portability Law;

(q) to be able to float proper instrument to liquefy long-term maturity by pooling

funds for short-term secondary market;

(r) to submit annually, not later than June 30, a public report to the President of
the Philippines and the Congress of the Philippines regarding its activities in the
administration and enforcement of this Act during the preceding year including
information and recommendations on board policies for the development and
perfection of the programs of the GSIS;

(s) to maintain a provident fund, which consists of contributions made by both the
GSIS and its officials and employees and their earnings, for the payments of
benefits to such officials and employees or their heirs under such terms and
conditions as it may prescribe;

(t) to approve and adopt guidelines affecting investments, insurance coverage of

government properties, settlement of claims, disposition of acquired assets,
privatization or expansion of subsidiaries, development of housing projects,
increased benefit and loan packages to members, and the enforcement of the
provision of this Act;

(u) any provision of law to the contrary notwithstanding, to authorize the payment
of extra remuneration to the officials and employees directly involved in the
collection and/or remittances of contributions, loan repayments, and other monies
due to the GSIS at such rates and under such conditions as it may adopt: Provided,
That the best interest of the GSIS shall be observed thereby;

(v) to determine, fix and impose interest upon unpaid premiums due from employers
and employees;

(w) to ensure the collection or recovery of all indebtedness, liabilities and/or

accountabilities, including unpaid premiums or contributions in favor of the GSIS
arising from any cause or source whatsoever, due from obligors, whether public or
private. The Board shall demand payment or settlement of the obligations referred
to herein within thirty (30) days from the date the obligation becomes due, and in
the event of failure or refusal of the obligor or debtor to comply with the demand,
to initiate or institute the necessary or proper actions or suits, criminal, civil
or administrative or otherwise, before the courts, tribunals, commissions, boards,
or bodies of proper jurisdiction within thirty (30) days reckoned from the expiry
date of the period fixed in the demand within which to pay or settle the account;

(x) to design and implement programs that will promote and mobilize savings and
provide additional resources for social security expansion and at the same time
afford individual members appropriate returns on their savings/investments. The
programs shall be so designed as to spur socio-economic take-off and maintain
continued growth; and

(y) to exercise such powers and perform such other acts as may be necessary,
useful, incidental or auxiliary to carry out the provisions of this Act, or to
attain the purposes and objectives of this Act.

"SEC. 42. The Board of Trustees; its Composition; Tenure and Compensation. - The
corporate powers and functions of the GSIS shall be vested in and exercised by the
Board of Trustees composed of the President and General Manager of the GSIS and
eight (8) other members to be appointed by the President of the Philippines, one
(1) of whom shall be either the President of the Philippine Public School Teachers
Association (PPSTA) or the President of the Philippine Association of School
Superintendents (PASS), another two (2) shall represent the leading organizations
or associations of government employees/retirees, another four (4) from the
banking, finance, investment, and insurance sectors, and one (1) recognized member
of the legal profession who at the time of appointment is also a member of the
GSIS. The Trustees shall elect from among themselves a Chairman while the President
and General Manager of the GSIS shall automatically be the vice-chairman.

The Trustees, except the President and General Manager who shall cease as trustee
upon his separation, shall hold office for six (6) years without reappointment, or
until their successors are duly appointed and qualified. Vacancy, other than
through the expiration of the term, shall be filled for the unexpired term only.
The members of the Board shall be entitled to a per diem of Two thousand five
hundred pesos (P2,500.00) for each board meeting actually attended by them, but not
to exceed Ten thousand pesos (P10,000.00) a month and reasonable transportation and
representation allowances as may be fixed by the Board.

"SEC. 43. Powers and Functions of the Board of Trustees. - The Board of Trustees
shall have the following powers and functions:

"(a) to formulate the policies, guidelines and programs to effectively carry out
the purposes of this Act;

"(b) to promulgate such rules and regulations as may be necessary or proper for the
effective exercise of the powers and functions as well as the discharge of the
duties and responsibilities of the GSIS, its officers and employees;

"(c) upon the recommendation of the President and General Manager, to approve the
annual and supplemental budget of receipts and expenditures of the GSIS, and to
authorize such operating and capital expenditures and disbursements of the GSIS as
may be necessary or proper for the effective management, operation and
administration of the GSIS;

"(d) upon the recommendation of the President and General Manager, to approve the
GSIS organizational and administrative structure and staffing pattern, and to
establish, fix, review, revise and adjust the appropriate compensation packages for
the officers and employees of the GSIS and reasonable allowances, incentives,
bonuses, privileges and other benefits as may be necessary or proper for the
effective management, operation and administration of the GSIS, which shall be
exempt from Republic Act No. 6758, otherwise known as the Attrition Law;

"(e) to fix and periodically review and adjust the rates of interest and other
terms and conditions for loans and credits extended to its members or other
persons, whether natural or juridical;

"(f) the provision of any law to the contrary notwithstanding, to compromise or

release, in whole or in part, any claim or settle liability to the GSIS, regardless
of the amount involved, under such terms and conditions as it may impose for the
best interest of the GSIS;

"(g) to approve and adopt guidelines affecting investments, insurance coverage of

government properties, settlement of claims, disposition of acquired assets,
development of housing projects, increased benefit and loan packages to members,
and the enforcement of the provisions of this Act;

"(h) to determine, fix, and impose interest upon unpaid or unremitted premiums
and/or contributions; and

"(i) to do and perform any and all acts necessary, proper or incidental to the
attainment of the purposes and objectives of this Act.
"SEC. 44. Appointment, Qualifications, and Compensation of the President and
General Manager and of other Personnel. - The President and General Manager of the
GSIS shall be its Chief Executive Officer and shall be appointed by the President
of the Philippines. He shall be a person with management and investments expertise
necessary for the effective performance of his duties and functions under this Act.

"The GSIS President and General Manager shall be assisted by one or more executive
vice-presidents, senior vice-presidents and managers in addition to the usual
supervisory and rank-and-file positions who shall be appointed and removed by the
President and General Manager with the approval of the Board, in accordance with
the existing Civil Service rules and regulations.

"SEC. 45. Powers and Duties of the President and General Manager. - The President
and General Manager of the GSIS shall, among others, execute and administer the
policies and resolutions approved by the Board and direct and supervise the
administration and operations of the GSIS. The President and General Manager,
subject to the approval of the Board, shall appoint the personnel of the GSIS,
remove, suspend or otherwise discipline them for cause, in accordance with the
existing Civil Service rules and regulations, and prescribe their duties and
qualifications to the end that only competent persons may be employed.

"SEC. 46. Auditor. - (a) The Chairman of the Commission on Audit shall be the ex
officio auditor of the GSIS, and the necessary personnel to assist said
representative in the performance of his duties.

"(b) The Chairman of the Commission on Audit or his authorized representatives,

shall submit to the Board soon after the close of each calendar year, an audited
statement showing the financial condition and progress of the GSIS for the calendar
year just ended.

"SEC. 47. Legal Counsel. - The Government Corporate Counsel shall be the legal
adviser and consultant of the GSIS, but the GSIS may assign to the Office of the
Government Corporate Counsel (OGCC) cases for legal action or trial, issues for
legal opinions, preparation and review of contracts/agreements and others, as the
GSIS may decide or determine from time to time: Provided, however, That the present
legal services group in the GSIS shall serve as its in-house legal counsel.

"The GSIS may, subject to approval by the proper court, deputize any personnel of
the legal service group to act as special sheriff in the enforcement of writs and
processes issued by the court, quasi-judicial agencies or administrative bodies in
cases involving the GSIS.

"SEC. 48. Powers of the Insurance Commission. - The Insurance Commissioner or his
authorized representatives shall make an examination of financial condition and
methods of transacting business of the GSIS at least once every three (3) years and
the report of said examination shall be submitted to the Board of Trustees and
copies thereof be furnished the Office of the President of the Philippines and the
two houses of the Congress of the Philippines within five (5) days after the close
of examination: Provided, however, That for each examination, the GSIS shall pay
the office of the Insurance Commissioner an amount equal to the actual expenses
incurred by the said office in the conduct of examination, including the salaries
of the examiners and of the actuary of such examination for the actual time spent.

"H. GENERAL PROVISION

"SEC. 49. Dispensation of Social Insurance Benefits. - (a) The GSIS shall pay the
retirement benefits to the employee on his last day of service in the government:
Provided, That all requirements are submitted to the GSIS within a reasonable
period prior to the effective date of the retirement;

"(b) The GSIS shall discontinue the processing and adjudication of retirement
claims under R.A. No. 1616 except refund of retirement premium under R. A. No. 910.
Instead, all agencies concerned shall process and pay the gratuities of their
employees. The Board shall adopt the proper rules and procedures for the
implementation of this provision.

"SEC. 50. Development and Disposition of Acquired Assets. - The GSIS shall have the
right to develop and dispose of its acquired assets obtained in the ordinary course
of its business. To add value to, improve profitability on, and/or enhance the
marketability of an acquired asset, the GSIS may further develop/renovate the same
either with its own capital or through a joint venture arrangement with private
companies or individuals.

"The GSIS may sell its acquired assets in accordance with existing Commission on
Audit (COA) rules and regulations for an amount not lower than the current market
value of the property. For this purpose, the GSIS shall conduct an annual appraisal
of its property or acquired assets to determine its current market value. All
notices of sale shall be published in newspapers of general circulation.

"No injunction or restraining order issued by any court, commission, tribunal or

office shall bar, impede or delay the sale and disposition by the GSIS of its
acquired assets except on questions of ownership and national or public interest.

"SEC. 51. Government Assistance to the GSIS. - The GSIS may call upon any employer
for such assistance as may be necessary in the discharge of its duties and
functions.

"I. PENAL PROVISIONS

"SEC. 52. Penalty. - (a) Any person found to have participated directly or
indirectly in the commission of fraud, collusion, falsification, or
misrepresentation in any transaction with the GSIS, whether for him or for some
other persons, shall suffer the penalties provided for in Article 172 of the
Revised Penal Code.

"(b) Whoever shall obtain or receive any money or check invoking any provision of
this Act or any agreement thereunder, without being entitled thereto with the
intent to defraud any member, any employer, the GSIS, or any third party, shall be
punished by a fine of not less than Five thousand pesos (P5,000.00) nor more than
Twenty thousand pesos (P20,000.00) or by imprisonment of not less than six (6)
years and one (1) day to twelve (12) years, or both, at the discretion of the
court.

"(c) Whoever fails or refuses to comply with the provisions of this Act or with the
rules and regulations adopted by the GSIS, shall be punished by a fine of not less
than Five thousand pesos (P5,000.00) nor more than Twenty thousand pesos
(P20,000.00) or imprisonment of not less than six (6) years and one (1) day to
twelve (12) years, or both, at the discretion of the court.

"(d) The treasurer, finance officer, cashier, disbursing officer, budget officer or
other official or employee who fails to include in the annual budget the amount
corresponding to the employer and employee contributions, or who fails or refuses
or delays by more than thirty (30) days from the time such amount becomes due and
demandable, or to deduct the monthly contributions of the employee shall, upon
conviction by final judgment, suffer the penalties of imprisonment from six (6)
months and one (1) day to six (6) years, and a fine of not less than Three thousand
pesos (P3,000.00) but not more than Six thousand pesos (P6,000.00), and in
addition, shall suffer absolute perpetual disqualification from holding public
office and from practicing any profession or calling licensed by the government.

"(e) Any employee or member who receives or keeps fund or property belonging,
payable or deliverable to the GSIS and appropriates the same, or takes or
misappropriates or uses the same for any purpose other than authorized by this Act,
or permits another person to take, misappropriate or use said fund or property by
expressly consenting thereto, or through abandonment or negligence, or is otherwise
guilty of the misappropriation of said fund or property, in whole or in part, shall
suffer the penalties provided in Article 217 of the Revised Penal Code, and in
addition, shall suffer absolute perpetual disqualification from holding public
office and from practicing any profession or calling licensed by the government.

"(f) Any employee who, after deducting the monthly contribution or loan
amortization from a members compensation, fails to remit the same to the GSIS
within thirty (30) days from the date they should have been remitted under Section
6(a), shall be presumed to have misappropriated such contribution or loan
amortization and shall suffer the penalties provided in Article 315 of the Revised
Penal Code, and in addition, shall suffer absolute perpetual disqualification from
holding public office and from practicing any profession or calling licensed by the
government.

"(g) The heads of the offices of the national government, its political
subdivisions, branches, agencies and instrumentalities, including government-owned
or controlled corporations and government financial institutions, and the personnel
of such offices who are involved in the collection of premium contributions, loan
amortization and other accounts due the GSIS who shall fail, refuse or delay the
payment, turnover, remittance or delivery of such accounts to the GSIS within
thirty (30) days from the time that the same shall have been due and demandable
shall, upon conviction by final judgment, suffer the penalties of imprisonment of
not less than one (1) year nor more than five (5) years and a fine of not less than
Ten thousand pesos (P10,000.00) nor more than Twenty thousand pesos (P20,000.00),
and in addition, shall suffer absolute perpetual disqualification from holding
public office and from practicing any profession or calling licensed by the
government.

"(h) The officers and/or personnel referred to in paragraph (g) of this section
shall be liable not only criminally but also civilly to the GSIS or to the employee
or member concerned in the form of damages, including surcharges and interests.

"(i) For the charges or complaints referred to in paragraph (g) of this section,
the liabilities therein set forth shall be construed as waiver of the State of its
immunity from suit, hence, the above-mentioned officials and/or personnel may not
invoke the defense of non-suability of the State.

"(j) Failure of the Members of the GSIS Board, including the chairman and the vice-
chairman, to comply with the provisions of paragraph (w) of Section 41 hereof,
shall subject them to imprisonment of not less than six (6) months nor more than
one (1) year or a fine of not less than Five thousand pesos (P5,000.00) nor more
than Ten thousand pesos (P10,000.00) without prejudice to any civil or
administrative liability which may also arise therefrom.

"(k) Criminal actions arising from violations of the provisions of this Act may be
commenced by the GSIS or by the aggrieved member, either under this Act or, in
appropriate cases, under the Revised Penal Code.

"SEC. 53. Implementing Rules and Regulations. - The implementing rules and
regulations to carry out the provisions of this Act shall be adopted and
promulgated by the GSIS not later than ninety (90) days after the approval of this
Act.

"SEC. 54. Non-impairment of Benefits, Powers, Jurisdiction, Rights, Privileges,

Functions and Activities. - Nothing in this Act shall be construed to repeal, amend
or limit any provision of existing laws, Presidential Decrees and Letters of
Instructions, not otherwise specifically inconsistent with the provisions of this
Act.

"SEC. 55. Exclusiveness of Benefits. - Whenever other laws provide similar benefits
for the same contingencies covered by this Act, the member who qualifies to the
benefits shall have the option to choose which benefits will be paid to him.
However, if the benefits provided by the law chosen are less than the benefits
provided under this Act, the GSIS shall pay only the difference.

"SEC. 56. Appropriations. - The amount necessary to carry out the provisions of
this Act shall be included in the respective budgets of the agencies in the
national government obligation program of the year following its enactment into law
and thereafter."

Section 2. Separability Clause. - Should any provision of this Act or any part
thereof be declared invalid, the other provisions, so far as they are separable
from the invalid ones, shall remain in force and effect.

Section 3. Repealing Clause. - All laws and any other law or parts of law
specifically inconsistent herewith are hereby repealed or modified accordingly:
Provided, That the rights under the existing laws, rules and regulations vested
upon or acquired by an employee who is already in the service as of the effectivity
of this Act shall remain in force and effect: Provided, further, That subsequent to
the effectivity of this Act, a new employee or an employee who has previously
retired or separated and is reemployed in the service shall be covered by the
provisions of this Act.

Section 4. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2) newspapers of general
circulation.

This Act, which is a consolidation of Senate Bill No. 2013 and House Bill No. 8561,
was finally passed by the Senate and the House of Representatives on May 29, 1997
and May 28, 1997, respectively.

Approved: May 30, 1997.

REPUBLIC ACT NO. 7699

AN ACT INSTITUTING LIMITED PORTABILITY SCHEME IN THE SOCIAL SECURITY INSURANCE
SYSTEMS BY TOTALIZING THE WORKERS' CREDITABLE SERVICES OR CONTRIBUTIONS IN EACH OF
THE SYSTEMS.

SECTION 1. It is hereby declared the policy of the State to promote the welfare of
our workers by recognizing their efforts in productive endeavors and to further
improve their conditions by providing benefits for their long years of contribution
to the national economy. Towards this end, the State shall institute a scheme for
totalization and portability of social security benefits with the view of
establishing within a reasonable period a unitary social security system.
Sec. 2. Definition of Terms. As used in this Act, unless the context indicates
otherwise, the following terms shall mean:
(a) "Contributions" shall refer to the contributions paid by the employee or worker
to either the Government Service Insurance System (GSIS) or the Social Security
System (SSS) on account of the worker's membership;
(b) "Portability" shall refer to the transfer of funds for the account and benefit
of a worker who transfers from one system to the other;
(c) "Sector" shall refer to employment either in the public or private sector;

(d) "System" shall refer to either the SSS as created under Republic Act No. 1161,
as amended or the GSIS as created under Presidential Decree No. 1146, as amended;
and

(e) "Totalization" shall refer to the process of adding up the periods of

creditable services or contributions under each of the Systems, for purposes of
eligibility and computation of benefits.

Sec. 3. Provisions of any general or special law or rules and regulations to the
contrary notwithstanding, a covered worker who transfers employment from one sector
to another or is employed in both sectors shall have his credible services or
contributions in both Systems credited to his service or contribution record in
each of the Systems and shall be totalized for purposes of old-age, disability,
survivorship and other benefits in case the covered member does not qualify for
such benefits in either or both Systems without totalization: Provided, however,
That overlapping periods of membership shall be credited only once for purposes of
totalization.

Sec. 4. All contributions paid by such member personally, and those that were paid
by his employers to both Systems shall be considered in the processing of benefits
which he can claim from either or both Systems: Provided, however, That the amount
of benefits to be paid by one System shall be in proportion to the number of
contributions actually remitted to that System.
Sec. 5. Nothing in this Act shall be construed to diminish or reduce the benefits
being enjoyed by a covered worker arising from existing laws, issuances, and
company policies or practices or agreements between the employer and the employees.

Sec. 6. The Department of Labor and Employment for the private sector and the Civil
Service Commission for the government sector, together with the SSS and the GSIS
shall, within ninety (90) days from the effectivity of this Act, promulgate the
rules and regulations necessary to implement the provisions hereof: Provided, That
any conflict in the interpretation of the law and the implementing rules and
regulations shall be resolved in favor of the workers.

Sec. 7. All laws, decrees, orders, rules and regulations, or parts thereof, which
are inconsistent with the provisions of this Act are hereby repealed or modified
accordingly.

Sec. 8. This Act shall take effect fifteen (15) days after its complete publication
in the Official Gazette or in at least two (2) national newspapers of general
circulation, whichever comes earlier.

Approved: May 1, 1994