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THE

GOVERNMENTSERVICEINSURANCESYSTEMACTOF1997

REPUBLICACTNO.8291

ANACTAMENDINGPRESIDENTIALDECREENO.1146,ASAMENDED,EXPANDING

ANDINCREASINGTHECOVERAGEANDBENEFITSOFTHEGOVERNMENTSERVICE

INSURANCESYSTEM,INSTITUTINGREFORMSTHEREINANDFOROTHER

PURPOSES.

SECTION1.PresidentialDecreeNo.1146,asamended,otherwiseknownasthe

"RevisedGovernmentServiceInsuranceActof1977",isherebyfurtheramendedto

readasfollows:

"SECTION1.Title.ThetitleofthisActshallbe:"TheGovernmentServiceInsurance

SystemActof1997."

"A.DEFINITIONS

"SEC.2.Definitionofterms.Unlessthecontextotherwiseindicates,thefollowingtermsshallmean:

"(a)GSISTheGovernmentServiceInsuranceSystemcreatedbyCommonwealthAct

No.186;

"(b)BoardTheBoardofTrusteesoftheGovernmentServiceInsuranceSystem;

"(c)EmployerThenationalgovernment,itspoliticalsubdivisions,branches,agenciesorinstrumentalities,includinggovernmentownedorcontrolled

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corporations,andfinancialinstitutionswithoriginalcharters,theconstitutional

commissionsandthejudiciary;

"(d)EmployeeorMemberAnypersonreceivingcompensationwhileintheservice

ofanemployerasdefinedherein,whetherbyelectionorappointment,irrespectiveofstatusofappointment,includingbarangayandSanggunianofficials;

"(e)ActiveMemberAmemberwhoisnotseparatedfromtheservice;

"(f)DependentsDependentsshallbethefollowing:(a)thelegitimatespouse

dependentforsupportuponthememberorpensioner;(b)thelegitimate,

legitimated,legallyadoptedchild,includingtheillegitimatechild,whoisunmarried,

notgainfullyemployed,notovertheageofmajority,orisovertheageofmajoritybutincapacitatedandincapableofselfsupportduetoamentalorphysicaldefect

acquiredpriortoageofmajority;and(c)theparentsdependentuponthemember

forsupport;

"(g)PrimarybeneficiariesThelegaldependentspouseuntilhe/sheremarriesand

thedependentchildren;

"(h)SecondarybeneficiariesThedependentparentsand,subjecttotherestrictionsondependentchildren,thelegitimatedescendants;

"(i)CompensationThebasicpayorsalaryreceivedbyanemployee,pursuanttohis

election/appointment,excludingperdiems,bonuses,overtimepay,honoraria,

allowancesandanyotheremolumentsreceivedinadditiontothebasicpaywhich

arenotintegratedintothebasicpayunderexistinglaws;

"(j)ContributionTheamountpayabletotheGSISbythememberandtheemployerinaccordancewithSection5ofthisAct;

"(k)CurrentDailyCompensationTheactualdailycompensationortheactual

monthlycompensationdividedbythenumberofworkingdaysinthemonthof

contingencybutnottoexceedtwentytwo(22)days;

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"(r)TotalDisabilityCompleteincapacitytocontinuewithhispresentemployment

orengageinanygainfuloccupationduetothelossorimpairmentofthenormalfunctionsofthephysicaland/ormentalfacultiesofthemember;

"(s)PermanentTotalDisabilityAccruesorariseswhenrecoveryfromtheimpairmentmentionedinSection2(Q)ismedicallyremote;

"(t)TemporaryTotalDisabilityAccruesorariseswhentheimpairedphysical

and/ormentalfacultiescanberehabilitatedand/orrestoredtotheirnormal

functions;

"(u)PermanentPartialDisabilityAccruesorarisesupontheirrevocablelossor

impairmentofcertainportion/softhephysicalfaculties,despitewhichthememberisabletopursueagainfuloccupation.

"B.MEMBERSHIPINTHEGSIS

"SEC.3.CompulsoryMembership.MembershipintheGSISshallbecompulsoryfor

allemployeesreceivingcompensationwhohavenotreachedthecompulsoryretirementage,irrespectiveofemploymentstatus,exceptmembersoftheArmed

ForcesofthePhilippinesandthePhilippineNationalPolice,subjecttotheconditionthattheymustsettlefirsttheirfinancialobligationwiththeGSIS,andcontractualswhohavenoemployerandemployeerelationshipwiththeagenciestheyserve.

"Exceptforthemembersofthejudiciaryandconstitutionalcommissionswhoshall

havelifeinsuranceonly,allmembersoftheGSISshallhavelifeinsurance,

retirement,andallothersocialsecurityprotectionssuchasdisability,survivorship,

separation,andunemploymentbenefits.

"SEC.4.EffectofSeparationfromtheService.Amemberseparatedfromthe

serviceshallcontinuetobeamember,andshallbeentitledtowhateverbenefitshe

hasqualifiedtointheeventofanycontingencycompensableunderthisAct.

"C.SOURCESOFFUNDS

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"SEC.5.Contributions.(a)Itshallbemandatoryforthememberandemployerto

paythemonthlycontributionsspecifiedinthefollowingschedule:

"MonthlyCompensationPercentageofMonthly

Compensation

Payableby

MemberEmployer

I.MaximumAverage

MonthlyCompensation

(AMC)LimitandBelow9.0%12.0%

II.OvertheMaximum

AMCLimit

UptotheMaximum

AMCLimit9.0%12.0%

InExcessofthe

AMCLimit2.0%12.0%

"Membersofthejudiciaryandconstitutionalcommissionersshallpaythreepercent

(3%)oftheirmonthlycompensationaspersonalshareandtheiremployersa

correspondingthreepercent(3%)sharefortheirlifeinsurancecoverage.

"(b)Theemployershallincludeinitsannualappropriationthenecessaryamounts

foritsshareofthecontributionsindicatedabove,plusanyadditionalpremiumsthat

mayberequiredonaccountofthehazardsorrisksofitsemployeesoccupation.

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"(c)Itshallbemandatoryandcompulsoryforallemployerstoincludethepayment

ofcontributionsintheirannualappropriations.Penalsanctionsshallbeimposeduponemployerswhofailtoincludethepaymentofcontributionsintheirannual

appropriationsorotherwisefailtoremittheaccurate/exactamountof

contributionsontime,ordelaytheremittanceofpremiumcontributionstotheGSIS.

TheheadsofofficesandagenciesshallbeadministrativelyliablefornonremittanceordelayedremittanceofpremiumcontributionstotheGSIS.

"SEC.6.CollectionandRemittanceofContributions.(a)Theemployershallreport

totheGSISthenamesofallitsemployees,theircorrespondingemploymentstatus,

positions,salariesandsuchotherpertinentinformation,includingsubsequent

changestherein,ifany,asmayberequiredbytheGSIS;theemployershalldeduct

eachmonthfromthemonthlysalaryorcompensationofeachemployeethe

contributionpayablebyhiminaccordancewiththescheduleprescribedintherules

andregulationsimplementingthisAct.

"(b)EachemployershallremitdirectlytotheGSIStheemployeesandemployerscontributionswithinthefirstten(10)daysofthecalendarmonthfollowingthe

monthtowhichthecontributionsapply.Theremittancebytheemployerofthe

contributiontotheGSISshalltakepriorityoverandabovethepaymentofanyand

allobligations,exceptsalariesandwagesofitsemployees.

"SEC.7.InterestonDelayedRemittances.Agencieswhichdelaytheremittanceof

anyandallmoniesduetheGSISshallbechargedinterestsasmaybeprescribedby

theBoardbutnotlessthantwopercent(2%)simpleinterestpermonth.Suchinterestshallbepaidbytheemployersconcerned.

"SEC.8.GovernmentGuarantee.ThegovernmentoftheRepublicofthePhilippines

herebyguaranteesthefulfillmentoftheobligationsoftheGSIStoitsmembersas

andwhentheyfalldue.

"D.BENEFITS

"SEC.9.ComputationoftheBasicMonthlyPension.(a)Thebasicmonthlypension

isequalto:

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"1)thirtysevenandonehalfpercent(37.5%)oftherevaluedaveragemonthly

compensation;plus

"2)twoandonehalfpercent(2.5%)ofsaidrevaluedaveragemonthly

compensationforeachyearofserviceinexcessof(15)years:Provided,Thatthebasicmonthlypensionshallnotexceedninetypercent(90%)oftheaverage

monthlycompensation.

"(b)Thebasicmonthlypensionmaybeadjustedupontherecommendationofthe

PresidentandGeneralManageroftheGSISandapprovedbythePresidentofthe

PhilippinesinaccordancewiththerulesandregulationsprescribedbytheGSIS:

Provided,however,thatthebasicmonthlypensionshallnotbelessthanOne

thousandandthreehundredpesos(P1,300.00):Provided,further,thatthebasic

monthlypensionforthosewhohaverenderedatleasttwenty(20)yearsofserviceaftertheeffectivityofthisActshallnotbelessthanTwothousandfourhundred

pesos(P2,400.00)amonth.

"SEC.10.ComputationofService.(a)ThecomputationofserviceforthepurposeofdeterminingtheamountofbenefitspayableunderthisActshallbefromthedateof

originalappointment/election,includingperiodsofserviceatdifferenttimesunderoneormoreemployers,thoseperformedoverseasundertheauthorityofthe

RepublicofthePhilippines,andthosethatmaybeprescribedbytheGSISin

coordinationwiththeCivilServiceCommission.

"(b)Allservicecreditedforretirement,resignationorseparationforwhich

correspondingbenefitshavebeenawardedunderthisActorotherlawsshallbe

excludedinthecomputationofserviceincaseofreinstatementintheserviceofan

employerandsubsequentretirementorseparationwhichiscompensableunder

thisAct.

"Forthepurposeofthissection,thetermserviceshallincludefulltimeservicewith

compensation:Provided,thatparttimeandotherserviceswithcompensationmaybeincludedundersuchrulesandregulationsasmaybeprescribedbytheGSIS.

"SEPARATIONBENEFITS

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(3)heisnotreceivingamonthlypensionbenefitfrompermanenttotaldisability.

"SEC.14.PeriodicPensionAdjustment.Themonthlypensionofallpensionersincludingallthosereceivingsurvivorshippensionbenefitsshallbeperiodically

adjustedasmayberecommendedbytheGSISactuaryandapprovedbytheBoardinaccordancewiththerulesandregulationsprescribedbytheGSIS.

"PERMANENTDISABILITYBENEFITS

"SEC.15.GeneralConditionsforEntitlement.Amemberwhosufferspermanent

disabilityforreasonsnotduetohisgravemisconduct,notoriousnegligence,

habitualintoxication,orwillfulintentiontokillhimselforanother,shallbeentitled

tothebenefitsprovidedforunderSections16and17immediatelyfollowing,subjecttothecorrespondingconditionsthereof.

"SEC.16.PermanentTotalDisabilityBenefits.(a)Ifthepermanentdisabilityistotal,heshallreceiveamonthlyincomebenefitforlifeequaltothebasicmonthly

pensioneffectivefromthedateofdisability:Provided,That:

(1)heisintheserviceatthetimeofdisability;or

(2)ifseparatedfromtheservice,hehaspaidatleastthirtysix(36)monthly

contributionswithinthefive(5)yearperiodimmediatelyprecedingdisability,or

haspaidatotalofatleastonehundredeighty(180)monthlycontributions,priorto

hisdisability:Provided,further,Thatifatthetimeofdisability,hewasintheservice

andhaspaidatotalofatleastonehundredeighty(180)monthlycontributions,in

additiontothemonthlyincomebenefit,heshallreceiveacashpaymentequivalent

toeighteen(18)timeshisbasicmonthlypension:Provided,finally,Thatamember

cannotenjoythemonthlyincomebenefitforpermanentdisabilityandtheoldage

retirementsimultaneously.

"(b)Ifamemberwhosufferspermanenttotaldisabilitydoesnotsatisfyconditions

(1)and(2)inparagraph(a)ofthissectionbuthasrenderedatleastthree(3)years

ofserviceatthetimeofhisdisability,heshallbeadvancedthecashpaymentequivalenttoonehundredpercent(100%)ofhisaveragemonthlycompensationfor

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eachyearofservicehepaidcontributions,butnotlessthanTwelvethousandpesos

(P12,000.00)whichshouldhavebeenhisseparationbenefit.

"(c)Unlessthememberhasreachedtheminimumretirementage,disabilitybenefit

shallbesuspendedwhen:

"(1)heisreemployed;or

"(2)herecoversfromhisdisabilityasdeterminedbytheGSIS,whosedecision

shallbefinalandbinding;or

"(3)hefailstopresenthimselfformedicalexaminationwhenrequiredbythe

GSIS.

"(d)Thefollowingdisabilitiesshallbedeemedtotalandpermanent:

"(1)completelossofsightofbotheyes;

"(2)lossoftwo(2)limbsatorabovetheankleorwrist;

"(3)permanentcompleteparalysisoftwo(2)limbs;

"(4)braininjuryresultinginincurableimbecilityorinsanity;and

"(5)suchothercasesasmaybedeterminedbytheGSIS.

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"SEC.17.PermanentPartialDisabilityBenefits.(a)Ifthedisabilityispartial,he

shallreceiveacashpaymentinaccordancewithascheduleofdisabilitiestobeprescribedbytheGSIS:Provided,Thathesatisfieseitherconditions(1)or(2)of

Section16(a);

"(b)Thefollowingdisabilitiesshallbedeemedpermanentpartial:

"(1)completeandpermanentlossoftheuseof:

(i)anyfinger

(ii)anytoe

(iii)onearm

(iv)onehand

(v)onefoot

(vi)oneleg

(vii)oneorbothears

(viii)hearingofoneorbothears

(ix)sightofbotheyes

"(2)suchothercasesasmybedeterminedbytheGSIS.

"TEMPORARYDISABILITYBENEFITS

"SEC.18.TemporaryTotalDisabilityBenefits.(a)Amemberwhosuffers

temporarytotaldisabilityforreasonsnotduetoanyoftheconditionsenumerated

inSection15hereofshallbeentitledtoseventyfivepercent(75%)ofhiscurrent

dailycompensationforeachdayorfractionthereofoftemporarydisabilitybenefit

notexceedingonehundredtwenty(120)daysinonecalendaryearafterexhausting

allhissickleavecreditsandcollectivebargainingagreementsickleavebenefits,ifany,butnotearlierthanthefourthdayofhistemporarytotaldisability:Provided,

That:

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"(1)heisintheserviceatthetimeofhisdisability;or

"(2)ifseparated,hehasrenderedatleastthree(3)yearsofserviceandhaspaidatleastsix(6)monthlycontributionsinthetwelvemonthperiodimmediately

precedinghisdisability.

"Provided,however,Thatamembercannotenjoythetemporarytotaldisability

benefitandsickleavepaysimultaneously:Provided,further,Thatifthedisability

requiresmoreextensivetreatmentthatlastsbeyondonehundredtwenty(120)

days,thepaymentofthetemporarytotaldisabilitybenefitmaybeextendedbythe

GSISbutnottoexceedatotaloftwohundredforty(240)days.

"(b)ThetemporarytotaldisabilitybenefitshallinnocasebelessthanSeventy

pesos(P70.00)aday.

"(c)Thenoticesrequiredofthememberandtheemployer,themodeofpayment,

andtheotherrequirementsforentitlementtotemporarytotaldisabilitybenefitsshallbeprovidedintherulesandregulationstobeprescribedbytheGSIS.

"SEC.19.NonscheduledDisability.Forinjuriesorillnessesresultinginadisabilitynotlistedinthescheduleofpartial/totaldisabilityprovidedherein,theGSISshall

determinedthenatureofthedisabilityandthecorrespondingbenefitstherefor.

"SURVIVORSHIPBENEFITS

"SEC.20.SurvivorshipBenefits.Whenamemberorpensionerdies,the

beneficiariesshallbeentitledtosurvivorshipbenefitsprovidedinSections21and22hereundersubjecttotheconditionsthereinprovidedfor.Thesurvivorship

pensionshallconsistof:

(1)thebasicsurvivorshippensionwhichisfiftypercent(50%)ofthebasic

monthlypension;and

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(2)thedependentchildrenspensionnotexceedingfiftypercent(50%)ofthe

basicmonthlypension

.

"SEC.21.DeathofaMember.(a)Uponthedeathofamember,theprimarybeneficiariesshallbeentitledto:

(1)survivorshippension:Provided,Thatthedeceased:

(i)wasintheserviceatthetimeofhisdeath;or

(ii)ifseparatedfromtheservice,hasatleastthree(3)yearsofserviceatthe

timeofhisdeathandhaspaidthirtysix(36)monthlycontributionswithinthefive

yearperiodimmediatelyprecedinghisdeath;orhaspaidatotalofatleastone

hundredeighty(180)monthlycontributionspriortohisdeath;or

(2)thesurvivorshippensionplusacashpaymentequivalenttoonehundred

percent(100%)ofhisaveragemonthlycompensationforeveryyearofservice:Provided,Thatthedeceasedwasintheserviceatthetimeofhisdeathwithatleast

three(3)yearsofservice;or

(3)acashpaymentequivalenttoonehundredpercent(100%)ofhisaverage

monthlycompensationforeachyearofservicehepaidcontributions,butnotless

thanTwelvethousandpesos(P12,000.00):Provided,Thatthedeceasedhas

renderedatleastthree(3)yearsofservicepriortohisdeathbutdoesnotqualifyfor

thebenefitsunderitem(1)or(2)ofthisparagraph.

(b)Thesurvivorshippensionshallbepaidasfollows:

(1)whenthedependentspouseistheonlysurvivor,he/sheshallreceivethe

basicsurvivorshippensionforlifeoruntilhe/sheremarries;

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(2)whenonlydependentchildrenarethesurvivors,theyshallbeentitledtothe

basicsurvivorshippensionforaslongastheyarequalified,plusthedependentchildrenspensionequivalenttotenpercent(10%)ofthebasicmonthlypensionfor

everydependentchildnotexceedingfive(5),countedfromtheyoungestand

withoutsubstitution;

(3)whenthesurvivorsarethedependentspouseandthedependentchildren,

thedependentspouseshallreceivethebasicsurvivorshippensionforlifeoruntilhe/sheremarries,andthedependentchildrenshallreceivethedependent

childrenspensionmentionedintheimmediatelyprecedingparagraph(2)hereof.

(c)Intheabsenceofprimarybeneficiaries,thesecondarybeneficiariesshallbe

entitledto:

(1)thecashpaymentequivalenttoonehundredpercent(100%)ofhisaverage

monthlycompensationforeachyearofservicehepaidcontributions,butnotless

thanTwelvethousandpesos(P12,000.00):Provided,Thatthememberisinthe

serviceatthetimeofhisdeathandhasatleastthree(3)yearsofservice;or

(2)intheabsenceofsecondarybeneficiaries,thebenefitsunderthisparagraph

shallbepaidtohislegalheirs.

(d)Forpurposesofthesurvivorshipbenefits,legitimatechildrenshallinclude

legallyadoptedandlegitimatedchildren.

"SEC.22.DeathofaPensioner.Uponthedeathofanoldagepensionerora

memberreceivingthemonthlyincomebenefitforpermanentdisability,the

qualifiedbeneficiariesshallbeentitledtothesurvivorshippensiondefinedin

Section20ofthisAct,subjecttotheprovisionsofparagraph(b)ofSection21

hereof.Whenthepensionerdieswithintheperiodcoveredbythelumpsum,thesurvivorshippensionshallbepaidonlyaftertheexpirationofthesaidperiod.

"FUNERALBENEFITS

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"SEC.23.FuneralBenefits.Theamountofthefuneralbenefitsshallbedetermined

andspecifiedbytheGSISintherulesandregulationsbutshallnotbelessthanTwelvethousandpesos(P12,000.00):Provided,Thatitshallbeincreasedtoatleast

Eighteenthousandpesos(P18,000.00)afterfive(5)yearsandshallbepaidupon

thedeathof:

(a)anactivememberasdefinedunderSection2(e)ofthisAct;or

(b)amemberwhohasbeenseparatedfromtheservice,butwhomaybeentitled

tofuturebenefitpursuanttoSection4ofthisAct;or

(c)apensioner,asdefinedinSection2(o)ofthisAct;or

(d)aretireewhoatthetimeofhisretirementwasofpensionableageunderthis

ActbutwhooptedtoretireunderRepublicActNo.1616.

"LIFEINSURANCEBENEFITS

"SEC.24.CompulsoryLifeInsurance.AllemployeesexceptforMembersofthe

ArmedForcesofthePhilippines(AFP)andthePhilippineNationalPolice(PNP)

shall,undersuchtermsandconditionsasmaybepromulgatedbytheGSIS,becompulsorilycoveredwithlifeinsurance,whichshallautomaticallytakeeffectas

follows:

(1)forthoseemployedaftertheeffectivityofthisAct,theirinsuranceshalltake

effectonthedateoftheiremployment;

(2)forthosewhoseinsurancewillmatureaftertheeffectivityofthisAct,their

insuranceshallbedeemedrenewedonthedayfollowingthematurityorexpirydate

oftheirinsurance;

(3)forthosewithoutanylifeinsuranceasoftheeffectivityofthisAct,their

insuranceshalltakeeffectfollowingsaideffectivity.

"SEC.25.Dividends.AnannualdividendmaybegrantedtoallmembersoftheGSIS

whoselifeinsuranceisinforceforatleastone(1)yearinaccordancewithadividendsallocationformulatobedeterminedbytheGSIS.

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"SEC.26.OptionalInsurance.Subjecttotherulesandregulationsprescribedbythe

GSIS,amembermayapplyforinsuranceand/orpreneedcoverageembracinglife,health,hospitalization,education,memorialplans,andsuchotherplansasmaybe

designedbytheGSIS,forhimselfand/orhisdependents.Anyemployermay

likewiseapplyforgroupinsurancecoverageforitsemployees.Thepaymentofthe

premiums/installmentsforoptionalinsuranceandpreneedproductsmaybemadebytheinsuredorhisemployerand/oranypersonacceptabletotheGSIS.

"SEC.27.Reinsurance.TheGSISmayreinsureanyofitsinterestsorpartthereof

withanyprivatecompanyorreinsurerwhetherdomesticofforeign:Provided,That

theGSISshallsubmitanannualreportonitsreinsuranceoperationstothe

InsuranceCommission.

"E.ADJUDICATIONOFCLAIMSANDDISPUTES

"SEC.28.Prescription.ClaimsforbenefitsunderthisActexceptforlifeand

retirementshallprescribeafterfour(4)yearsfromthedateofcontingency.

"SEC.29.FacilityofPayment.TheGSISshallprescriberulesandregulationsto

facilitatepaymentofbenefits,proceeds,andclaimsunderthisActandanyother

lawsadministeredbytheGSIS.PaymentsmadebytheGSISpriortoitsreceiptofan

adverseclaim,toabeneficiaryorclaimantsubsequentlyfoundnotentitledthereto,shallnotbarthelegalandeligiblerecipienttohisrighttodemandthepaymentof

benefits,proceeds,andclaimsfromtheGSIS,whoshall,however,havearightto

institutetheappropriateactioninacourtoflawagainsttheineligiblerecipient.

"SEC.30.SettlementofDisputes.TheGSISshallhaveoriginalandexclusive

jurisdictiontosettleanydisputesarisingunderthisActandanyotherlaws

administeredbytheGSIS.

TheBoardmaydesignateanymemberoftheBoard,orofficialoftheGSISwhoisalawyer,toactashearingofficertoreceiveevidence,makefindingsoffactand

submitrecommendations,togetherwithalldocumentaryandtestimonialevidence

totheBoardwithinthirty(30)workingdaysfromthetimethepartieshaveclosed

theirrespectiveevidenceandfiledtheirlastpleading.TheBoardshalldecidethe

casewithinthirty(30)daysfromthereceiptofthehearingofficersfindingsandrecommendations.ThecaseshearddirectlybytheBoardshallbedecidedwithin

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thirty(30)workingdaysfromthetimetheyaresubmittedbythepartiesfor

decision.

"SEC.31.Appeals.AppealsfromanydecisionorawardoftheBoardshallbe

governedbyRules43and45ofthe1997RulesofCivilProcedureadoptedbytheSupremeCourtonApril8,1997whichwilltakeeffectonJuly1,1997:Provided,

ThatpendingcasesandthosefiledpriortoJuly1,1997shallbegovernedbythe

applicablerulesofprocedure:Provided,further,Thattheappealshalltakeprecedenceoverallothercasesexceptcriminalcaseswhenthepenaltyoflife

imprisonmentordeathorreclusionperpetuaisimposable.

Theappealshallnotstaytheexecutionoftheorderorawardunlessorderedbythe

Board,bytheCourtofAppealsorbytheSupremeCourtandtheappealshallbe

withoutprejudicetothespecialcivilactionofcertiorariwhenproper.

"SEC.32.ExecutionofDecision.Whennoappealisperfectedandthereisnoorder

tostaybytheBoard,bytheCourtofAppealsorbytheSupremeCourt,anydecision

orawardoftheBoardshallbeenforcedandexecutedinthesamemannerasdecisionsoftheRegionalTrialCourt.Forthispurpose,theBoardshallhavethe

powertoissuetothecityorprovincialsherifforitsappointedsheriffsuchwritsofexecutionasmaybenecessaryfortheenforcementofsuchdecisionoraward,and

anypersonwhoshallfailorrefusetocomplywithsuchdecision,award,writor

processafterbeingrequiredtodososhall,uponapplicationbytheGSIS,be

punishedforcontempt.

"SEC.33.Oaths,Witnesses,andProductionofRecords.Whenauthorizedbythe

Board,anofficialoremployeeoftheGSISshallhavethepowertoadministeroath

andaffirmation,takedeposition,certifytoofficialacts,andissuesubpoenaad

testificandumandsubpoenaducestecumtocompeltheattendanceofwitnessesand

theproductionofbooks,papers,correspondences,andotherrecordsdeemed

necessaryasevidenceinconnectionwithanyquestionarisingunderthisAct.Any

caseofcontumacyshallbedealtwithinaccordancewiththeprovisionsofSection

580oftheRevisedAdministrativeCode.

"F.FUNDSOFTHEGSIS

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"SEC.34.Funds.AllcontributionspayableunderSection5ofthisActtogetherwith

theearningsandaccrualsthereonshallconstitutetheGSISSocialInsuranceFund.ThesaidfundshallbeusedtofinancethebenefitsadministeredbytheGSISunder

thisAct.Inaddition,theGSISshalladministertheoptionalinsurancefundforthe

insurancecoveragedescribedinSection26hereof,theEmployeesCompensation

InsuranceFundcreatedunderP.D.626,asamended,GeneralInsuranceFundcreatedunderActNo.656,asamended,andsuchotherspecialfundsexistingorthatmaybecreatedforspecialgroupsorpersonsrenderingservicestothegovernment.

TheGSISshallmaintaintherequiredreservestoguaranteethefulfillmentofits

obligationsunderthisAct.

ThefundsoftheGSISshallnotbeusedforpurposesotherthanwhatareprovided

forunderthisAct.Moreover,noportionofthefundsoftheGSISorincomethereof

shallaccruetotheGeneralFundofthenationalgovernmentanditspolitical

subdivisions,instrumentalitiesandotheragenciesincludinggovernmentowned

andcontrolledcorporationsexceptasmaybeallowedunderthisAct.

"SEC.35.DepositsandDisbursements.Allrevenuescollectedandallaccruals

theretoshallbedeposited,administeredanddisbursedinaccordancewiththelaw.

Amaximumexpenseloadingoftwelvepercent(12%)oftheyearlyrevenuesfrom

allsourcesmaybedisbursedforadministrativeandoperationalexpensesexceptas

maybeotherwiseapprovedbythePresidentofthePhilippinesonthebasisofactuarialandmanagementstudies.

"SEC.36.InvestmentofFunds.ThefundsoftheGSISwhicharenotneededtomeetthecurrentobligationsmaybeinvestedundersuchtermsandconditionsandrules

andregulationsasmaybeprescribedbytheBoard:Provided,Thatinvestments

shallsatisfytherequirementsofliquidity,safety/securityandyieldinorderto

ensuretheactuarialsolvencyofthefundsoftheGSIS:Provided,further,Thatthe

GSISshallsubmitanannualreportonallinvestmentsmadetobothHousesof

CongressofthePhilippines,towit:

(a)ininterestbearingbondsorsecuritiesorotherevidenceofindebtednessoftheGovernmentofthePhilippines;

(b)ininterestbearingdepositsorsecuritiesinanydomesticbankdoing

businessinthePhilippines:Provided,Thatinthecaseofsuchdeposits,thereshall

notexceedatanytimetheunimpairedcapitalandsurplusortotalprivatedeposits

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ofthedepositorybank,whicheverissmaller:Provided,further,Thatthesaidbank

haspriordesignationasadepositoryforthepurposebytheMonetaryBoardoftheCentralMonetaryAuthority;

(c)indirecthousingloanstomembersandgrouphousingprojectssecuredbyfirstmortgage,givingprioritytothelowincomegroupsandinshortandmedium

termloanstomemberssuchassalary,policy,educational,emergencystock

purchaseplanandothersimilarloans:Provided,Thatnolessthanfortypercent(40%)oftheinvestiblefundoftheGSISSocialInsuranceFundshallbeinvestedfor

thesepurposes;

(d)inbonds,securities,promissorynotesorotherevidenceofindebtednessof

educationalormedicalinstitutionstofinancetheconstruction,improvementand

maintenanceofschoolsandhospitals;

(e)inrealestatepropertyincludingsharesofstocksinvolvingrealstateproperty

andinvestmentssecuredbyfirstmortgagesonrealestateorothercollaterals

acceptabletotheGSIS:Provided,Thatsuchinvestmentshall,inthedeterminationoftheBoard,redoundtothebenefitoftheGSIS,itsmembersaswellasthegeneral

public;

(f)indebtinstrumentsandothersecuritiestradedinthesecondarymarkets;

(g)inloansto,orinbonds,debentures,promissorynotesorotherevidenceof

indebtednessofanysolventcorporationcreatedorexistingunderthelawsofthe

Philippines;

(h)incommonandpreferredstocksofanysolventcorporationorfinancial

institutioncreatedorexistingunderthelawsofthePhilippineslistedinthestock

exchangewithproventrackrecordofprofitabilityoverthelastthree(3)yearsandpaymentofdividendsatleastonceoverthesameperiod;

(i)indomesticmutualfundsincludinginvestmentsrelatedtotheoperationsof

mutualfunds;and

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referredtohereinasanessentialfactortomaintainorprotectthesolvencyofthe

fund,notwithstandingandindependentlyoftheguarantyofthenationalgovernmenttosecuresuchsolvencyorliability.

"Thefundsand/orthepropertiesreferredtohereinaswellasthebenefits,sumsormoniescorrespondingtothebenefitsunderthisActshallbeexemptfrom

attachment,garnishment,execution,levyorotherprocessesissuedbythecourts,

quasijudicialagenciesoradministrativebodiesincludingCommissiononAudit(COA)disallowancesandfromallfinancialobligationsofthemembers,includinghis

pecuniaryaccountabilityarisingfromorcausedoroccasionedbyhisexerciseor

performanceofhisofficialfunctionsorduties,orincurredrelativetoorin

connectionwithhispositionorworkexceptwhenhismonetaryliability,contractual

orotherwise,isinfavoroftheGSIS.

"G.ADMINISTRATION

"SEC.40.ImplementingBody.TheGovernmentServiceInsuranceSystemas

createdunderCommonwealthActNo.186shallimplementtheprovisionsofthisAct.

"SEC.41.PowersandFunctionsoftheGSIS.TheGSISshallexercisethefollowing

powersandfunctions:

(a)toformulate,adopt,amendand/orrescindsuchrulesandregulationsasmay

benecessarytocarryouttheprovisionsandpurposesofthisAct,aswellasthe

effectiveexerciseofthepowersandfunctions,andthedischargeofdutiesand

responsibilitiesoftheGSIS,itsofficersandemployees;

(b)toadoptorapprovetheannualandsupplementalbudgetofreceiptsand

expendituresincludingsalariesandallowancesoftheGSISpersonnel;toauthorizesuchcapitalandoperatingexpendituresanddisbursementsoftheGSISasmaybenecessaryandproperfortheeffectivemanagementandoperationoftheGSIS;

(c)toinvestthefundsoftheGSIS,directlyorindirectly,inaccordancewiththeprovisionsofthisAct;

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(d)toacquire,utilizeordisposeof,inanymannerrecognizedbylaw,realor

personalpropertyinthePhilippinesorelsewherenecessarytocarryoutthe

purposesofthisAct;

(e)toconductcontinuingactuarialandstatisticalstudiesandvaluationsto

determinethefinancialconditionoftheGSISandtakingintoconsiderationsuchstudiesandvaluationsandthelimitationshereinprovided,readjustthebenefits,

contributions,premiumrates,interestratesortheallocationorreallocationofthe

fundstothecontingenciescovered;

(f)tohavethepowerofsuccession;

(g)tosueandbesued;

(h)toenterinto,make,performandcarryoutcontractsofeverykindand

descriptionwithanyperson,firmorassociationorcorporation,domesticorforeign;

(i)tocarryonanyotherlawfulbusinesswhatsoeverinpursuanceof,orin

connectionwiththeprovisionsofthisAct;

(j)tohaveoneormoreofficesinandoutsideofthePhilippines,andtoconduct

itsbusinessandexerciseitspowersthroughoutandinanypartoftheRepublicof

thePhilippinesand/orinanyorallforeigncountries,statesandterritories:

Provided,ThattheGSISshallmaintainabranchofficeineveryprovincewherethere

existsaminimumoffifteenthousand(15,000)membership;

(k)toborrowfundsfromanysource,privateorgovernment,foreignordomestic,onlyasanincidentinthesecuritizationofhousingmortgagesoftheGSISandon

accountofitsreceivablesfromanygovernmentorprivateentity;

(l)toinvest,ownorotherwiseparticipateinequityinanyestablishment,firmor

entity;

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(m)toapproveappointmentsintheGSISexceptappointmentstopositionswhich

arepolicydetermining,primarilyconfidentialorhighlytechnicalinnature

accordingtotheCivilServicerulesandregulations:Provided,ThatallpositionsintheGSISshallbegovernedbythecompensationandpositionclassificationsystem

andqualificationsstandardsapprovedbytheGSISBoardofTrusteesbasedonacomprehensivejobanalysisandauditofactualdutiesandresponsibilities:Provided,

further,Thatthecompensationplanshallbecomparablewiththeprevailing

compensationplansintheprivatesectorandshallbesubjecttotheperiodicreview

bytheBoardnomorethanonceeveryfour(4)yearswithoutprejudicetoyearly

meritreviewsorincreasesbasedonproductivityandprofitability;

(n)todesignandadoptanEarlyRetirementIncentivesPlan(ERIP)and/or

financialassistanceforthepurposeofretirementforitsownpersonnel;

(o)tofixandperiodicallyreviewandadjusttheratesofinterestandotherterms

andconditionsforloansandcreditsextendedtomembersorotherpersons,

whethernaturalorjuridical;

(p)toenterintoagreementwiththeSocialSecuritySystemoranyotherentity,

enterprise,corporationorpartnershipforthebenefitofmemberstransferringfrom

onesystemtoanothersubjecttotheprovisionsofRepublicActNo.7699,otherwise

knownasthePortabilityLaw;

(q)tobeabletofloatproperinstrumenttoliquefylongtermmaturitybypoolingfundsforshorttermsecondarymarket;

(r)tosubmitannually,notlaterthanJune30,apublicreporttothePresidentof

thePhilippinesandthe

CongressofthePhilippinesregardingitsactivitiesintheadministrationandenforcementofthisActduringtheprecedingyearincludinginformationandrecommendationsonboardpoliciesforthedevelopmentandperfectionofthe

programsoftheGSIS;

(s)tomaintainaprovidentfund,whichconsistsofcontributionsmadebyboth

theGSISanditsofficialsandemployeesandtheirearnings,forthepaymentsof

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"(c)upontherecommendationofthePresidentandGeneralManager,toapprove

theannualandsupplementalbudgetofreceiptsandexpendituresoftheGSIS,andtoauthorizesuchoperatingandcapitalexpendituresanddisbursementsoftheGSISas

maybenecessaryorproperfortheeffectivemanagement,operationand

administrationoftheGSIS;

"(d)upontherecommendationofthePresidentandGeneralManager,toapprove

theGSISorganizationalandadministrativestructureandstaffingpattern,andtoestablish,fix,review,reviseandadjusttheappropriatecompensationpackagesfor

theofficersandemployeesoftheGSISandreasonableallowances,incentives,

bonuses,privilegesandotherbenefitsasmaybenecessaryorproperforthe

effectivemanagement,operationandadministrationoftheGSIS,whichshallbe

exemptfromRepublicActNo.6758,otherwiseknownastheAttritionLaw;

"(e)tofixandperiodicallyreviewandadjusttheratesofinterestandotherterms

andconditionsforloansandcreditsextendedtoitsmembersorotherpersons,

whethernaturalorjuridical;

"(f)theprovisionofanylawtothecontrarynotwithstanding,tocompromiseor

release,inwholeorinpart,anyclaimorsettleliabilitytotheGSIS,regardlessoftheamountinvolved,undersuchtermsandconditionsasitmayimposeforthebest

interestoftheGSIS;

"(g)toapproveandadoptguidelinesaffectinginvestments,insurancecoverage

ofgovernmentproperties,settlementofclaims,dispositionofacquiredassets,

developmentofhousingprojects,increasedbenefitandloanpackagestomembers,

andtheenforcementoftheprovisionsofthisAct;

"(h)todetermine,fix,andimposeinterestuponunpaidorunremittedpremiums

and/orcontributions;and

"(i)todoandperformanyandallactsnecessary,properorincidentaltothe

attainmentofthepurposesandobjectivesofthisAct.

"SEC.44.Appointment,Qualifications,andCompensationofthePresidentand

GeneralManagerandofotherPersonnel.ThePresidentandGeneralManagerof

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theGSISshallbeitsChiefExecutiveOfficerandshallbeappointedbythePresident

ofthePhilippines.HeshallbeapersonwithmanagementandinvestmentsexpertisenecessaryfortheeffectiveperformanceofhisdutiesandfunctionsunderthisAct.

"TheGSISPresidentandGeneralManagershallbeassistedbyoneormoreexecutivevicepresidents,seniorvicepresidentsandmanagersinadditiontotheusual

supervisoryandrankandfilepositionswhoshallbeappointedandremovedbythe

PresidentandGeneralManagerwiththeapprovaloftheBoard,inaccordancewiththeexistingCivilServicerulesandregulations.

"SEC.45.PowersandDutiesofthePresidentandGeneralManager.ThePresident

andGeneralManageroftheGSISshall,amongothers,executeandadministerthe

policiesandresolutionsapprovedbytheBoardanddirectandsupervisethe

administrationandoperationsoftheGSIS.ThePresidentandGeneralManager,subjecttotheapprovaloftheBoard,shallappointthepersonneloftheGSIS,

remove,suspendorotherwisedisciplinethemforcause,inaccordancewiththe

existingCivilServicerulesandregulations,andprescribetheirdutiesandqualificationstotheendthatonlycompetentpersonsmaybeemployed.

"SEC.46.Auditor.(a)TheChairmanoftheCommissiononAuditshallbetheexofficioauditoroftheGSIS,andthenecessarypersonneltoassistsaidrepresentative

intheperformanceofhisduties.

"(b)TheChairmanoftheCommissiononAuditorhisauthorizedrepresentatives,

shallsubmittotheBoardsoonafterthecloseofeachcalendaryear,anaudited

statementshowingthefinancialconditionandprogressoftheGSISforthecalendar

yearjustended.

"SEC.47.LegalCounsel.TheGovernmentCorporateCounselshallbethelegal

adviserandconsultantoftheGSIS,buttheGSISmayassigntotheOfficeofthe

GovernmentCorporateCounsel(OGCC)casesforlegalactionortrial,issuesforlegal

opinions,preparationandreviewofcontracts/agreementsandothers,astheGSISmaydecideordeterminefromtimetotime:Provided,however,Thatthepresent

legalservicesgroupintheGSISshallserveasitsinhouselegalcounsel.

"TheGSISmay,subjecttoapprovalbythepropercourt,deputizeanypersonnelofthelegalservicegrouptoactasspecialsheriffintheenforcementofwritsand

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itspropertyoracquiredassetstodetermineitscurrentmarketvalue.Allnoticesof

saleshallbepublishedinnewspapersofgeneralcirculation.

"Noinjunctionorrestrainingorderissuedbyanycourt,commission,tribunalor

officeshallbar,impedeordelaythesaleanddispositionbytheGSISofitsacquiredassetsexceptonquestionsofownershipandnationalorpublicinterest.

"SEC.51.GovernmentAssistancetotheGSIS.TheGSISmaycalluponanyemployer

forsuchassistanceasmaybenecessaryinthedischargeofitsdutiesandfunctions.

"I.PENALPROVISIONS

"SEC.52.Penalty.(a)Anypersonfoundtohaveparticipateddirectlyorindirectly

inthecommissionoffraud,collusion,falsification,ormisrepresentationinany

transactionwiththeGSIS,whetherforhimorforsomeotherpersons,shallsuffer

thepenaltiesprovidedforinArticle172oftheRevisedPenalCode.

"(b)Whoevershallobtainorreceiveanymoneyorcheckinvokinganyprovisionof

thisActoranyagreementthereunder,withoutbeingentitledtheretowiththeintenttodefraudanymember,anyemployer,theGSIS,oranythirdparty,shallbe

punishedbyafineofnotlessthanFivethousandpesos(P5,000.00)normorethanTwentythousandpesos(P20,000.00)orbyimprisonmentofnotlessthansix(6)yearsandone(1)daytotwelve(12)years,orboth,atthediscretionofthecourt.

"(c)WhoeverfailsorrefusestocomplywiththeprovisionsofthisActorwiththe

rulesandregulationsadoptedbytheGSIS,shallbepunishedbyafineofnotless

thanFivethousandpesos(P5,000.00)normorethanTwentythousandpesos

(P20,000.00)orimprisonmentofnotlessthansix(6)yearsandone(1)dayto

twelve(12)years,orboth,atthediscretionofthecourt.

"(d)Thetreasurer,financeofficer,cashier,disbursingofficer,budgetofficerorother

officialoremployeewhofailstoincludeintheannualbudgettheamount

correspondingtotheemployerandemployeecontributions,orwhofailsorrefuses

ordelaysbymorethanthirty(30)daysfromthetimesuchamountbecomesdueanddemandable,ortodeductthemonthlycontributionsoftheemployeeshall,

uponconvictionbyfinaljudgment,sufferthepenaltiesofimprisonmentfromsix(6)

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monthsandone(1)daytosix(6)years,andafineofnotlessthanThreethousand

pesos(P3,000.00)butnotmorethanSixthousandpesos(P6,000.00),andinaddition,shallsufferabsoluteperpetualdisqualificationfromholdingpublicoffice

andfrompracticinganyprofessionorcallinglicensedbythegovernment.

"(e)Anyemployeeormemberwhoreceivesorkeepsfundorpropertybelonging,

payableordeliverabletotheGSISandappropriatesthesame,ortakesor

misappropriatesorusesthesameforanypurposeotherthanauthorizedbythisAct,orpermitsanotherpersontotake,misappropriateorusesaidfundorpropertyby

expresslyconsentingthereto,orthroughabandonmentornegligence,oris

otherwiseguiltyofthemisappropriationofsaidfundorproperty,inwholeorin

part,shallsufferthepenaltiesprovidedinArticle217oftheRevisedPenalCode,and

inaddition,shallsufferabsoluteperpetualdisqualificationfromholdingpublic

officeandfrompracticinganyprofessionorcallinglicensedbythegovernment.

"(f)Anyemployeewho,afterdeductingthemonthlycontributionorloan

amortizationfromamemberscompensation,failstoremitthesametotheGSISwithinthirty(30)daysfromthedatetheyshouldhavebeenremittedunderSection

6(a),shallbepresumedtohavemisappropriatedsuchcontributionorloan

amortizationandshallsufferthepenaltiesprovidedinArticle315oftheRevised

PenalCode,andinaddition,shallsufferabsoluteperpetualdisqualificationfrom

holdingpublicofficeandfrompracticinganyprofessionorcallinglicensedbythegovernment.

"(g)Theheadsoftheofficesofthenationalgovernment,itspoliticalsubdivisions,branches,agenciesandinstrumentalities,includinggovernmentownedor

controlledcorporationsandgovernmentfinancialinstitutions,andthepersonnelof

suchofficeswhoareinvolvedinthecollectionofpremiumcontributions,loan

amortizationandotheraccountsduetheGSISwhoshallfail,refuseordelaythe

payment,turnover,remittanceordeliveryofsuchaccountstotheGSISwithinthirty

(30)daysfromthetimethatthesameshallhavebeendueanddemandableshall,

uponconvictionbyfinaljudgment,sufferthepenaltiesofimprisonmentofnotless

thanone(1)yearnormorethanfive(5)yearsandafineofnotlessthanTen

thousandpesos(P10,000.00)normorethanTwentythousandpesos(P20,000.00),

andinaddition,shallsufferabsoluteperpetualdisqualificationfromholdingpublic

officeandfrompracticinganyprofessionorcallinglicensedbythegovernment.

"(h)Theofficersand/orpersonnelreferredtoinparagraph(g)ofthissectionshall

beliablenotonlycriminallybutalsocivillytotheGSISortotheemployeeormemberconcernedintheformofdamages,includingsurchargesandinterests.

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"(i)Forthechargesorcomplaintsreferredtoinparagraph(g)ofthissection,the

liabilitiesthereinsetforthshallbeconstruedaswaiveroftheStateofitsimmunity

fromsuit,hence,theabovementionedofficialsand/orpersonnelmaynotinvokethedefenseofnonsuabilityoftheState.

"(j)FailureoftheMembersoftheGSISBoard,includingthechairmanandthevicechairman,tocomplywiththeprovisionsofparagraph(w)ofSection41hereof,shall

subjectthemtoimprisonmentofnotlessthansix(6)monthsnormorethanone(1)

yearorafineofnotlessthanFivethousandpesos(P5,000.00)normorethanTen

thousandpesos(P10,000.00)withoutprejudicetoanyciviloradministrative

liabilitywhichmayalsoarisetherefrom.

"(k)CriminalactionsarisingfromviolationsoftheprovisionsofthisActmaybe

commencedbytheGSISorbytheaggrievedmember,eitherunderthisActor,in

appropriatecases,undertheRevisedPenalCode.

"SEC.53.ImplementingRulesandRegulations.Theimplementingrulesand

regulationstocarryouttheprovisionsofthisActshallbeadoptedandpromulgatedbytheGSISnotlaterthanninety(90)daysaftertheapprovalofthisAct.

"SEC.54.NonimpairmentofBenefits,Powers,Jurisdiction,Rights,Privileges,

FunctionsandActivities.NothinginthisActshallbeconstruedtorepeal,amendor

limitanyprovisionofexistinglaws,PresidentialDecreesandLettersofInstructions,

nototherwisespecificallyinconsistentwiththeprovisionsofthisAct.

"SEC.55.ExclusivenessofBenefits.Wheneverotherlawsprovidesimilarbenefits

forthesamecontingenciescoveredbythisAct,thememberwhoqualifiestothe

benefitsshallhavetheoptiontochoosewhichbenefitswillbepaidtohim.However,

ifthebenefitsprovidedbythelawchosenarelessthanthebenefitsprovidedunder

thisAct,theGSISshallpayonlythedifference.

"SEC.56.Appropriations.Theamountnecessarytocarryouttheprovisionsofthis

Actshallbeincludedintherespectivebudgetsoftheagenciesinthenational

governmentobligationprogramoftheyearfollowingitsenactmentintolawandthereafter."

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SEC.2.SeparabilityClause.ShouldanyprovisionofthisActoranypartthereofbe

declaredinvalid,theotherprovisions,sofarastheyareseparablefromtheinvalid

ones,shallremaininforceandeffect.

SEC.3.RepealingClause.Alllawsandanyotherlaworpartsoflawspecifically

inconsistentherewithareherebyrepealedormodifiedaccordingly:Provided,Thattherightsundertheexistinglaws,rulesandregulationsvesteduponoracquiredby

anemployeewhoisalreadyintheserviceasoftheeffectivityofthisActshall

remaininforceandeffect:Provided,further,Thatsubsequenttotheeffectivityof

thisAct,anewemployeeoranemployeewhohaspreviouslyretiredorseparated

andisreemployedintheserviceshallbecoveredbytheprovisionsofthisAct.

SEC.4.Effectivity.ThisActshalltakeeffectfifteen(15)daysafteritspublicationin

theOfficialGazetteorinatleasttwo(2)newspapersofgeneralcirculation.

ThisAct,whichisaconsolidationofSenateBillNo.2013andHouseBillNo.8561,

wasfinallypassedbytheSenateandtheHouseofRepresentativesonMay29,1997

andMay28,1997,respectively.

Approved:May30,1997

(Sgd.)FIDELV.RAMOS

PresidentofthePhilippines