Republic of the Philippines Congress of the Philippines Metro Manila Tenth Congress Republic Act No.

8291 May 3 ! 199"

AN ACT AM#N$%N& PR#'%$#NT%A( $#CR## N). 11*+! A' AM#N$#$! #,PAN$%N& AN$ %NCR#A'%N& T-# C).#RA&# AN$ /#N#0%T' )0 T-# &).#RNM#NT '#R.%C# %N'1RANC# '2'T#M! %N'T%T1T%N& R#0)RM' T-#R#%N AN$ 0)R )T-#R P1RP)'#'

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: 'ection 1. Presidential Decree No !!"#$ as amended$ other%ise &no%n as the 3Re4ise5 &o4ern6ent 'er4ice %nsurance Act of 19""3! is hereby further amended to read as follo%s: 'S(C)*+N ! )itle , )he title of this -ct shall be: ')he .overnment Service *nsurance System -ct of !//0 ' 3A. $#0%N%T%)N' 'S(C 1 Definition of terms , 2nless the conte3t other%ise indicates$ the follo%ing terms shall mean: '4a5 .S*S, )he .overnment Service *nsurance System created by Common%ealth -ct No !6#7 '4b5 Board, )he Board of )rustees of the .overnment Service *nsurance System7 '4c5 (mployer, )he national government$ its political subdivisions$ branches$ agencies or instrumentalities$ including government, o%ned or controlled corporations$ and financial institutions %ith original charters$ the constitutional commissions and the 8udiciary7

'4d5 (mployee or Member, -ny person receiving compensation %hile in the service of an employer as defined herein$ %hether by election or appointment$ irrespective of status of appointment$ including barangay and Sanggunian officials7 '4e5 -ctive Member, - member %ho is not separated from the service7 '4f5 Dependents, Dependents shall be the follo%ing: 4a5 the legitimate spouse dependent for support upon the member or pensioner7 4b5 the legitimate$ legitimated$ legally adopted child$ including the illegitimate child$ %ho is unmarried$ not gainfully employed$ not over the age of ma8ority$ or is over the age of ma8ority but incapacitated and incapable of self,support due to a mental or physical defect ac9uired prior to age of ma8ority7 and 4c5 the parents dependent upon the member for support7 '4g5 Primary beneficiaries, )he legal dependent spouse until he:she remarries and the dependent children7 '4h5 Secondary beneficiaries, )he dependent parents and$ sub8ect to the restrictions on dependent children$ the legitimate descendants7 '4i5 Compensation, )he basic pay or salary received by an employee$ pursuant to his election:appointment$ e3cluding per diems$ bonuses$ overtime pay$ honoraria$ allo%ances and any other emoluments received in addition to the basic pay %hich are not integrated into the basic pay under e3isting la%s7 '485 Contribution, )he amount payable to the .S*S by the member and the employer in accordance %ith Section ; of this -ct7 '4&5 Current Daily Compensation, )he actual daily compensation or the actual monthly compensation divided by the number of %or&ing days in the month of contingency but not to e3ceed t%enty,t%o 4115 days7

'4l5 -verage Monthly Compensation 4-MC5, )he 9uotient arrived at after dividing the aggregate compensation received by the member during his last thirty,si3 4<#5 months of service preceding his separation:retirement: disability:death by thirty,si3 4<#5$ or by the number of months he received such compensation if he has less than thirty,si3 4<#5 months of service: Provided$ )hat the average monthly compensation shall in no case e3ceed the amount and rate as may be respectively set by the Board under the rules and regulations implementing this -ct as determined by the actuary of the .S*S: Provided$ further$)hat initially the average monthly compensation shall not e3ceed )en thousand pesos 4P!=$=== ==5$ and premium shall be nine percent 4/>5 and t%elve percent 4!1>5 for employee and employer covering the -MC limit and belo% and t%o percent 41>5 and t%elve percent 4!1>5 for employee and employer covering the compensation above the -MC limit7 '4m5 Revalued average monthly compensation, -n amount e9ual to one hundred seventy percent 4!0=>5 of the first +ne thousand pesos 4P!$=== ==5 of the average monthly compensation plus one hundred percent 4!==>5 of the average monthly compensation in e3cess of +ne thousand pesos 4P!$=== ==57 '4n5 ?ump sum, )he basic monthly pension multiplied by si3ty 4#=57 '4o5 Pensioner, -ny person receiving old,age permanent total disability pension or any person %ho has received the lump sum e3cluding one receiving survivorship pension benefits as defined in Section 1= of this -ct7 '4p5 .ainful +ccupation, -ny productive activity that provided the member %ith income at least e9ual to the minimum compensation of government employees7

'495 Disability, -ny loss or impairment of the normal functions of the physical and:or mental faculty of a member %hich reduces or eliminates his:her capacity to continue %ith his:her current gainful occupation or engage in any other gainful occupation7 '4r5 )otal Disability, Complete incapacity to continue %ith 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 member7 '4s5 Permanent )otal Disability, -ccrues or arises %hen recovery from the impairment mentioned in Section 1 4@5 is medically remote7 '4t5 )emporary )otal Disability, -ccrues or arises %hen the impaired physical and:or mental faculties can be rehabilitated and:or restored to their normal functions7 '4u5 Permanent Partial Disability, -ccrues or arises upon the irrevocable loss or impairment of certain portion:s of the physical faculties$ despite %hich the member is able to pursue a gainful occupation

3/. M#M/#R'-%P %N T-# &'%' 'S(C < Compulsory Membership , Membership in the .S*S shall be compulsory for all employees receiving compensation %ho have not reached the compulsory retirement age$ irrespective of employment status$ e3cept members of the -rmed Aorces of the Philippines and the Philippine National Police$ sub8ect to the condition that they must settle first their financial obligation %ith the .S*S$ and contractuals %ho have no employer and employee relationship %ith the agencies they serve '(3cept for the members of the 8udiciary and constitutional commissions %ho shall have life insurance only$ all members of the .S*S shall have life insurance$ retirement$ and all other social security protections such as disability$ survivorship$ separation$ and unemployment benefits

'S(C " (ffect of Separation from the Service , - member separated from the service shall continue to be a member$ and shall be entitled to %hatever benefits he has 9ualified to in the event of any contingency compensable under this -ct

3C. ')1RC#' )0 01N$' 'S(C ; Contributions , 4a5 *t shall be mandatory for the member and employer to pay the monthly contributions specified in the follo%ing schedule: 'Monthly Compensation Percentage of MonthlyCompensation Payable by Member
* Ma3imum -verage Monthly Compensation 4-MC5 ?imit and Belo% +ver the Ma3imum -MC ?imit ,2p to the Ma3imum -MC ?imit ,*n (3cess of the -MC ?imit / => 1 => !1 => !1 =>

(mployer

/ =>

!1 =>

**

'Members of the 8udiciary and constitutional commissioners shall pay three percent 4<>5 of their monthly compensation as personal share and their employers a corresponding three percent 4<>5 share for their life insurance coverage '4b5 )he 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 re9uired on account of the haBards or ris&s of its employeeCs occupation '4c5 *t 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 %ho fail to include the payment of contributions in their annual appropriations or other%ise fail to remit the accurate:e3act amount of contributions on time$ or delay the remittance of premium contributions to the .S*S )he heads of offices and agencies shall be administratively liable for non,remittance or delayed remittance of premium contributions to the .S*S 'S(C # Collection and Remittance of Contributions , 4a5 )he employer shall report to the .S*S the names of all its employees$ their corresponding employment status$ positions$ salaries and such other pertinent information$ including subse9uent changes therein$ if any$ as may be re9uired by the .S*S7 the employer shall deduct each month from the monthly salary or compensation of each employee the contribution payable by him in accordance %ith the schedule prescribed in the rules and regulations implementing this -ct '4b5 (ach employer shall remit directly to the .S*S the employeeCs and employerCs contributions %ithin the first ten 4!=5 days of the calendar month follo%ing the month to %hich the contributions apply )he remittance by the employer of the contribution to the .S*S shall ta&e priority over and above the payment of any and all obligations$ e3cept salaries and %ages of its employees 'S(C 0 *nterest on Delayed Remittances , -gencies %hich delay the remittance of any and all monies due the .S*S shall be charged interests as may be prescribed by the Board but not less than t%o percent 41>5 simple interest per month Such interest shall be paid by the employers concerned

'S(C 6 .overnment .uarantee , )he government of the Republic of the Philippines hereby guarantees the fulfillment of the obligations of the .S*S to its members as and %hen they fall due

3$. /#N#0%T' 'S(C / Computation of the Basic Monthly Pension , 4a5 )he basic monthly pension is e9ual to: '!5 thirty,seven and one,half percent 4<0 ;>5 of the revalued average monthly compensation7 plus '15 t%o and one,half percent 41 ;>5 of said revalued average monthly compensation for each year of service in e3cess of 4!;5 years: Provided$ )hat the basic monthly pension shall not e3ceed ninety percent 4/=>5 of the average monthly compensation '4b5 )he basic monthly pension may be ad8usted upon the recommendation of the President and .eneral Manager of the .S*S and approved by the President of the Philippines in accordance %ith the rules and regulations prescribed by the .S*S: Provided$ ho%ever$ that the basic monthly pension shall not be less than +ne thousand and three hundred pesos 4P!$<== ==5: Provided$ further$ that the basic monthly pension for those %ho have rendered at least t%enty 41=5 years of service after the effectivity of this -ct shall not be less than )%o thousand four hundred pesos 4P1$"== ==5 a month 'S(C != Computation of Service , 4a5 )he computation of service for the purpose of determining the amount of benefits payable under this -ct shall be from the date of original appointment:election$ 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 .S*S in coordination %ith the Civil Service Commission

'4b5 -ll service credited for retirement$ resignation or separation for %hich corresponding benefits have been a%arded under this -ct or other la%s shall be e3cluded in the computation of service in case of reinstatement in the service of an employer and subse9uent retirement or separation %hich is compensable under this -ct 'Aor the purpose of this section$ the term service shall include full,time service %ith compensation: Provided$that part,time and other services %ith compensation may be included under such rules and regulations as may be prescribed by the .S*S

3'#PARAT%)N /#N#0%T' 'S(C !! Separation Benefits , )he separation benefits shall consist of: 4a5 a cash payment e9uivalent to one hundred percent 4!==>5 of his average monthly compensation for each year of service he paid contributions$ but not less than )%elve thousand pesos 4P!1$===5 payable upon reaching si3ty 4#=5 years of age upon separation$ %hichever comes later: Provided$ that the member resigns or separates from the service after he has rendered at least three 4<5 years of service but less than fifteen 4!;5 years7 or '4b5 a cash payment e9uivalent to eighteen 4!65 times his basic monthly pension at the time of resignation or separation$ plus an old,age pension benefit e9ual to the basic monthly pension payable monthly for life upon reaching the age of si3ty 4#=5: Provided$ that the member resigns or separates from the service after he has rendered at least fifteen 4!;5 years of service and is belo% si3ty 4#=5 years of age at the time of resignation or separation 'S(C !1 2nemployment or *nvoluntary Separation Benefits , 2nemployment benefits in the form of monthly cash payments e9uivalent to fifty percent 4;=>5 of the average monthly compensation shall be paid to a permanent employee %ho is

involuntarily separated from the service due to the abolition of his office or position usually resulting from reorganiBation: Provided$ )hat he has been paying integrated contributions for at least one 4!5 year prior to separation 2nemployment benefits shall be paid in accordance %ith the follo%ing schedules:

'Contributions Made Benefit Duration ! year but less than < years 1 months
< or more years but less than # years < months # or more years but less than / years " months / or more years but less than !! years ; months !! or more years but less than !; years # months ')he first payment shall be e9uivalent to t%o 415 monthly benefits - seven,day 405 %aiting period shall be imposed on succeeding monthly payments '-ll accumulated unemployment benefits paid to the employee during his entire membership %ith the .S*S shall be deducted from voluntary separation benefits ')he .S*S shall prescribe the detailed guidelines in the operationaliBation of this section in the rules and regulations implementing this -ct

3R#T%R#M#NT /#N#0%T' 'S(C !< Retirement Benefits , 4a5 Retirement benefits shall be: '4!5 the lump sum payment as defined in this -ct payable at the time of retirement plus an old,age pension benefit e9ual to the basic monthly pension payable monthly for life$ starting upon e3piration of the five,year 4;5 guaranteed period covered by the lump sum7 or

'415 cash payment e9uivalent to eighteen 4!65 months of his basic monthly pension plus monthly pension for life payable immediately %ith no five,year 4;5 guarantee '4b5 2nless the service is e3tended by appropriate authorities$ retirement shall be compulsory for an employee of si3ty,five 4#;5 years of age %ith at least fifteen 4!;5 years of service: Provided$ )hat if he has less than fifteen 4!;5 years of service$ he may be allo%ed to continue in the service in accordance %ith e3isting civil service rules and regulations 'S(C !<,- Conditions for (ntitlement , - member %ho retires from the service shall be entitled to the retirement benefits enumerated in paragraph 4a5 of Section !< hereof: Provided$ )hat: 4!5 he has rendered at least fifteen years of service7 415 he is at least si3ty 4#=5 years of age at the time of retirement7 and 4<5 he is not receiving a monthly pension benefit from permanent total disability 'S(C !" Periodic Pension -d8ustment , )he monthly pension of all pensioners including all those receiving survivorship pension benefits shall be periodically ad8usted as may be recommended by the .S*S actuary and approved by the Board in accordance %ith the rules and regulations prescribed by the .S*S

3P#RMAN#NT $%'A/%(%T2 /#N#0%T' 'S(C !; .eneral Conditions for (ntitlement , - member %ho suffers permanent disability for reasons not due to his grave misconduct$ notorious negligence$ habitual into3ication$ or %illful intention to &ill himself or another$ shall be entitled to the benefits provided for under Sections !# and !0 immediately follo%ing$ sub8ect to the corresponding conditions thereof

'S(C !# Permanent )otal Disability Benefits , 4a5 *f the permanent disability is total$ he shall receive a monthly income benefit for life e9ual to the basic monthly pension effective from the date of disability:Provided$ )hat: 4!5 he is in the service at the time of disability7 or 415 if separated from the service$ he has paid at least thirty, si3 4<#5 monthly contributions %ithin the five 4;5 year period immediately preceding disability$ or has paid a total of at least one hundred eighty 4!6=5 monthly contributions$ prior to his disability: Provided$ further$ )hat if at the time of disability$ he %as in the service and has paid a total of at least one hundred eighty 4!6=5 monthly contributions$ in addition to the monthly income benefit$ he shall receive a cash payment e9uivalent to eighteen 4!65 times his basic monthly pension: Provided$ finally$ )hat a member cannot en8oy the monthly income benefit for permanent disability and the old,age retirement simultaneously '4b5 *f a member %ho suffers permanent total disability does not satisfy conditions 4!5 and 415 in paragraph 4a5 of this section but has rendered at least three 4<5 years of service at the time of his disability$ he shall be advanced the cash payment e9uivalent to one hundred percent 4!==>5 of his average monthly compensation for each year of service he paid contributions$ but not less than )%elve thousand pesos 4P!1$=== ==5 %hich should have been his separation benefit '4c5 2nless the member has reached the minimum retirement age$ disability benefit shall be suspended %hen: '4!5 he is reemployed7 or '415 he recovers from his disability as determined by the .S*S$ %hose decision shall be final and binding7 or '4<5 he fails to present himself for medical e3amination %hen re9uired by the .S*S

'4d5 )he follo%ing disabilities shall be deemed total and permanent: '4!5 complete loss of sight of both eyes7 '415 loss of t%o 415 limbs at or above the an&le or %rist7 '4<5 permanent complete paralysis of t%o 415 limbs7 '4"5 brain in8ury resulting in incurable imbecility or insanity7 and '4;5 such other cases as may be determined by the .S*S 'S(C !0 Permanent Partial Disability Benefits , 4a5 *f the disability is partial$ he shall receive a cash payment in accordance %ith a schedule of disabilities to be prescribed by the .S*S: Provided$ )hat he satisfies either conditions 4!5 or 415 of Section !# 4a57 '4b5 )he follo%ing disabilities shall be deemed permanent partial: '4!5 complete and permanent loss of the use of: 4i5 any finger 4ii5 any toe 4iii5 one arm 4iv5 one hand 4v5 one foot 4vi5 one leg 4vii5 one or both ears 4viii5 hearing of one or both ears 4i35 sight of both eyes '415 such other cases as my be determined by the .S*S

3T#MP)RAR2 $%'A/%(%T2 /#N#0%T' 'S(C !6 )emporary )otal Disability Benefits , 4a5 - member %ho suffers temporary total disability for reasons not due to any

of the conditions enumerated in Section !; hereof shall be entitled to seventy,five percent 40;>5 of his current daily compensation for each day or fraction thereof of temporary disability benefit not e3ceeding one hundred t%enty 4!1=5 days in one calendar year after e3hausting all his sic& leave credits and collective bargaining agreement sic& leave benefits$ if any$ but not earlier than the fourth day of his temporary total disability: Provided$ )hat: '4!5 he is in the service at the time of his disability7 or '415 if separated$ he has rendered at least three 4<5 years of service and has paid at least si3 4#5 monthly contributions in the t%elve,month period immediately preceding his disability

'Provided$ ho%ever$ )hat a member cannot en8oy the temporary total disability benefit and sic& leave pay simultaneously: Provided$ further$ )hat if the disability re9uires more e3tensive treatment that lasts beyond one hundred t%enty 4!1=5 days$ the payment of the temporary total disability benefit may be e3tended by the .S*S but not to e3ceed a total of t%o hundred forty 41"=5 days '4b5 )he temporary total disability benefit shall in no case be less than Seventy pesos 4P0= ==5 a day '4c5 )he notices re9uired of the member and the employer$ the mode of payment$ and the other re9uirements for entitlement to temporary total disability benefits shall be provided in the rules and regulations to be prescribed by the .S*S 'S(C !/ Non,scheduled Disability , Aor in8uries or illnesses resulting in a disability not listed in the schedule of partial:total disability provided herein$ the .S*S shall determined the nature of the disability and the corresponding benefits therefor 3'1R.%.)R'-%P /#N#0%T'

'S(C 1= Survivorship Benefits dies$ the beneficiaries shall be provided in Sections 1! and conditions therein provided for consist of:

, Dhen a member or pensioner entitled to survivorship benefits 11 hereunder sub8ect to the )he survivorship pension shall

4!5 the basic survivorship pension %hich is fifty percent 4;=>5 of the basic monthly pension7 and 415 the dependent childrenCs pension not e3ceeding fifty percent 4;=>5 of the basic monthly pension 'S(C 1! Death of a Member , 4a5 2pon the death of a member$ the primary beneficiaries shall be entitled to: 4!5 survivorship pension: Provided$ )hat the deceased: 4i5 %as in the service at the time of his death7 or 4ii5 if separated from the service$ has at least three 4<5 years of service at the time of his death and has paid thirty,si3 4<#5 monthly contributions %ithin the five,year period immediately preceding his death7 or has paid a total of at least one hundred eighty 4!6=5 monthly contributions prior to his death7 or 415 the survivorship pension plus a cash payment e9uivalent to one hundred percent 4!==>5 of his average monthly compensation for every year of service: Provided$ )hat the deceased %as in the service at the time of his death %ith at least three 4<5 years of service7 or 4<5 a cash payment e9uivalent to one hundred percent 4!==>5 of his average monthly compensation for each year of service he paid contributions$ but not less than )%elve thousand pesos 4P!1$=== ==5: Provided$ )hat the deceased has rendered at least three 4<5 years of service prior to his death but does not 9ualify for the benefits under item 4!5 or 415 of this paragraph

4b5 )he survivorship pension shall be paid as follo%s: 4!5 %hen the dependent spouse is the only survivor$ he:she shall receive the basic survivorship pension for life or until he:she remarries7 415 %hen only dependent children are the survivors$ they shall be entitled to the basic survivorship pension for as long as they are 9ualified$ plus the dependent childrenCs pension e9uivalent to ten percent 4!=>5 of the basic monthly pension for every dependent child not e3ceeding five 4;5$ counted from the youngest and %ithout substitution7 4<5 %hen 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 childrenCs pension mentioned in the immediately preceding paragraph 415 hereof 4c5 *n the absence of primary beneficiaries$ the secondary beneficiaries shall be entitled to: 4!5 the cash payment e9uivalent to one hundred percent 4!==>5 of his average monthly compensation for each year of service he paid contributions$ but not less than )%elve thousand pesos 4P!1$=== ==5: Provided$ )hat the member is in the service at the time of his death and has at least three 4<5 years of service7 or 415 in the absence of secondary beneficiaries$ the benefits under this paragraph shall be paid to his legal heirs 4d5 Aor purposes of the survivorship benefits$ legitimate children shall include legally adopted and legitimated children 'S(C 11 Death of a Pensioner , 2pon the death of an old,age pensioner or a member receiving the monthly income benefit for permanent disability$ the 9ualified beneficiaries shall be entitled

to the survivorship pension defined in Section 1= of this -ct$ sub8ect to the provisions of paragraph 4b5 of Section 1! hereof Dhen the pensioner dies %ithin the period covered by the lump sum$ the survivorship pension shall be paid only after the e3piration of the said period

301N#RA( /#N#0%T' 'S(C 1< Auneral Benefits , )he amount of the funeral benefits shall be determined and specified by the .S*S in the rules and regulations but shall not be less than )%elve thousand pesos 4P!1$=== ==5: Provided$)hat it shall be increased to at least (ighteen thousand pesos 4P!6$=== ==5 after five 4;5 years and shall be paid upon the death of: 4a5 an active member as defined under Section 1 4e5 of this -ct7 or 4b5 a member %ho has been separated from the service$ but %ho may be entitled to future benefit pursuant to Section " of this -ct7 or 4c5 a pensioner$ as defined in Section 1 4o5 of this -ct7 or 4d5 a retiree %ho at the time of his retirement %as of pensionable age under this -ct but %ho opted to retire under Republic -ct No !#!# 3(%0# %N'1RANC# /#N#0%T' 'S(C 1" Compulsory ?ife *nsurance , -ll employees e3cept for Members of the -rmed Aorces of the Philippines 4-AP5 and the Philippine National Police 4PNP5 shall$ under such terms and conditions as may be promulgated by the .S*S$ be compulsorily covered %ith life insurance$ %hich shall automatically ta&e effect as follo%s: 4!5 for those employed after the effectivity of this -ct$ their insurance shall ta&e effect on the date of their employment7

415 for those %hose insurance %ill mature after the effectivity of this -ct$ their insurance shall be deemed rene%ed on the day follo%ing the maturity or e3piry date of their insurance7 4<5 for those %ithout any life insurance as of the effectivity of this -ct$ their insurance shall ta&e effect follo%ing said effectivity 'S(C 1; Dividends , -n annual dividend may be granted to all members of the .S*S %hose life insurance is in force for at least one 4!5 year in accordance %ith a dividends allocation formula to be determined by the .S*S 'S(C 1# +ptional *nsurance , Sub8ect to the rules and regulations prescribed by the .S*S$ a member may apply for insurance and:or pre,need coverage embracing life$ health$ hospitaliBation$ education$ memorial plans$ and such other plans as may be designed by the .S*S$ for himself and:or his dependents -ny employer may li&e%ise apply for group insurance coverage for its employees )he 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 .S*S 'S(C 10 Reinsurance , )he .S*S may reinsure any of its interests or part thereof %ith any private company or reinsurer %hether domestic of foreign: Provided$ )hat the .S*S shall submit an annual report on its reinsurance operations to the *nsurance Commission

3#. A$71$%CAT%)N )0 C(A%M' AN$ $%'P1T#' 'S(C 16 Prescription , Claims for benefits under this -ct e3cept for life and retirement shall prescribe after four 4"5 years from the date of contingency 'S(C 1/ Aacility of Payment , )he .S*S shall prescribe rules and regulations to facilitate payment of benefits$ proceeds$ and claims under this -ct and any other la%s administered by the

.S*S Payments made by the .S*S prior to its receipt of an adverse claim$ to a beneficiary or claimant subse9uently 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 .S*S$ %ho shall$ ho%ever$ have a right to institute the appropriate action in a court of la% against the ineligible recipient 'S(C <= Settlement of Disputes , )he .S*S shall have original and e3clusive 8urisdiction to settle any disputes arising under this -ct and any other la%s administered by the .S*S )he Board may designate any member of the Board$ or official of the .S*S %ho is a la%yer$ to act as hearing officer to receive evidence$ ma&e findings of fact and submit recommendations$ together %ith all documentary and testimonial evidence to the Board %ithin thirty 4<=5 %or&ing days from the time the parties have closed their respective evidence and filed their last pleading )he Board shall decide the case %ithin thirty 4<=5 days from the receipt of the hearing officerCs findings and recommendations )he cases heard directly by the Board shall be decided %ithin thirty 4<=5 %or&ing days from the time they are submitted by the parties for decision 'S(C <! -ppeals , -ppeals from any decision or a%ard of the Board shall be governed by Rules "< and "; of the !//0 Rules of Civil Procedure adopted by the Supreme Court on -pril 6$ !//0 %hich %ill ta&e effect on Euly !$ !//0: Provided$ )hat pending cases and those filed prior to Euly !$ !//0 shall be governed by the applicable rules of procedure: Provided$ further$ )hat the appeal shall ta&e precedence over all other cases e3cept criminal cases %hen the penalty of life imprisonment or death or reclusion perpetua is imposable )he appeal shall not stay the e3ecution of the order or a%ard unless ordered by the Board$ by the Court of -ppeals or by the

Supreme Court and the appeal shall be %ithout pre8udice to the special civil action of certiorari %hen proper 'S(C <1 (3ecution of Decision , Dhen no appeal is perfected and there is no order to stay by the Board$ by the Court of -ppeals or by the Supreme Court$ any decision or a%ard of the Board shall be enforced and e3ecuted in the same manner as decisions of the Regional )rial Court Aor this purpose$ the Board shall have the po%er to issue to the city or provincial sheriff or its appointed sheriff such %rits of e3ecution as may be necessary for the enforcement of such decision or a%ard$ and any person %ho shall fail or refuse to comply %ith such decision$ a%ard$ %rit or process after being re9uired to do so shall$ upon application by the .S*S$ be punished for contempt 'S(C << +aths$ Ditnesses$ and Production of Records , Dhen authoriBed by the Board$ an official or employee of the .S*S shall have the po%er to administer oath and affirmation$ ta&e deposition$ certify to official acts$ and issue subpoena ad testificandum and subpoena duces tecum to compel the attendance of %itnesses and the production of boo&s$ papers$ correspondences$ and other records deemed necessary as evidence in connection %ith any 9uestion arising under this -ct -ny case of contumacy shall be dealt %ith in accordance %ith the provisions of Section ;6= of the Revised -dministrative Code

30. 01N$' )0 T-# &'%' 'S(C <" Aunds , -ll contributions payable under Section ; of this -ct together %ith the earnings and accruals thereon shall constitute the .S*S Social *nsurance Aund )he said fund shall be used to finance the benefits administered by the .S*S under this -ct *n addition$ the .S*S shall administer the optional insurance fund for the insurance coverage described in Section 1# hereof$ the (mployeesC Compensation *nsurance Aund created under P D #1#$ as amended$ .eneral *nsurance Aund created under -ct No

#;#$ as amended$ and such other special funds e3isting or that may be created for special groups or persons rendering services to the government )he .S*S shall maintain the re9uired reserves to guarantee the fulfillment of its obligations under this -ct )he funds of the .S*S shall not be used for purposes other than %hat are provided for under this -ct Moreover$ no portion of the funds of the .S*S or income thereof shall accrue to the .eneral Aund of the national government and its political subdivisions$ instrumentalities and other agencies including government,o%ned and controlled corporations e3cept as may be allo%ed under this -ct 'S(C <; Deposits and Disbursements , -ll revenues collected and all accruals thereto shall be deposited$ administered and disbursed in accordance %ith the la% - ma3imum e3pense loading of t%elve percent 4!1>5 of the yearly revenues from all sources may be disbursed for administrative and operational e3penses e3cept as may be other%ise approved by the President of the Philippines on the basis of actuarial and management studies 'S(C <# *nvestment of Aunds , )he funds of the .S*S %hich 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$ )hat investments shall satisfy the re9uirements of li9uidity$ safety:security and yield in order to ensure the actuarial solvency of the funds of the .S*S: Provided$ further$ )hat the .S*S shall submit an annual report on all investments made to both Houses of Congress of the Philippines$ to %it: 4a5 in interest,bearing bonds or securities or other evidence of indebtedness of the .overnment of the Philippines7 4b5 in interest,bearing deposits or securities in any domestic ban& doing business in the Philippines: Provided$ )hat in the

case of such deposits$ there shall not e3ceed at any time the unimpaired capital and surplus or total private deposits of the depository ban&$ %hichever is smaller: Provided$ further$)hat the said ban& has prior designation as a depository for the purpose by the Monetary Board of the Central Monetary -uthority7 4c5 in direct housing loans to members and group housing pro8ects secured by first mortgage$ giving priority to the lo% income groups and in short and medium term loans to members such as salary$ policy$ educational$ emergency stoc& purchase plan and other similar loans: Provided$ )hat no less than forty percent 4"=>5 of the investible fund of the .S*S Social *nsurance Aund shall be invested for these purposes7 4d5 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 hospitals7 4e5 in real estate property including shares of stoc&s involving real state property and investments secured by first mortgages on real estate or other collaterals acceptable to the .S*S: Provided$ )hat such investment shall$ in the determination of the Board$ redound to the benefit of the .S*S$ its members as %ell as the general public7 4f5 in debt instruments and other securities traded in the secondary mar&ets7 4g5 in loans to$ or in bonds$ debentures$ promissory notes or other evidence of indebtedness of any solvent corporation created or e3isting under the la%s of the Philippines7 4h5 in common and preferred stoc&s of any solvent corporation or financial institution created or e3isting under the la%s of the Philippines listed in the stoc& e3change %ith

proven trac& record of profitability over the last three 4<5 years and payment of dividends at least once over the same period7 4i5 in domestic mutual funds including investments related to the operations of mutual funds7 and 485 in foreign mutual funds and in foreign currency deposits or foreign currency,denominated debts$ non,speculative e9uities and other financial instruments or other assets issued in accordance %ith e3isting la%s of the countries %here such financial instruments are issued: Provided$ )hat these instruments or assets are listed in bourses of the respective countries %here these instruments or assets are issued: Provided$ further$ )hat the issuing company has proven trac& record of profitability over the last three 4<5 years and payment of dividends at least once over the same period 'S(C <0 Records and Reports , )he .S*S shall &eep and cause to &eep such records as may be necessary for the purpose of ma&ing actuarial studies$ calculations and valuations of the funds of the .S*S 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 ad8ustment of the benefits of the members )he .S*S shall maintain appropriate boo&s of accounts to record its assets$ liabilities$ income$ e3penses$ receipts and disbursement of funds and other financial transactions and operations 'S(C <6 (3amination and Faluation of the Aunds , )he .S*S shall ma&e a periodic actuarial e3amination and valuation of its funds in accordance %ith accepted actuarial principles 'S(C </ (3emption from )a3$ ?egal Process and ?ien , *t is hereby declared to be the policy of the State that the actuarial solvency of the funds of the .S*S shall be preserved and

maintained at all times and that contribution rates necessary to sustain the benefits under this -ct shall be &ept as lo% as possible in order not to burden the members of the .S*S and their employers )a3es imposed on the .S*S tend to impair the actuarial solvency of its funds and increase the contribution rate necessary to sustain the benefits of this -ct -ccordingly$ not%ithstanding any la%s to the contrary$ the .S*S$ its assets$ revenues including all accruals thereto$ and benefits paid$ shall be e3empt from all ta3es$ assessments$ fees$ charges$ or duties of all &inds )hese e3emptions shall continue unless e3pressly and specifically revo&ed and any assessment against the .S*S as of the approval of this -ct are hereby considered paid Conse9uently$ all la%s$ ordinances$ regulations$ issuances$ opinions or 8urisprudence contrary to or in derogation of this provision are hereby deemed repealed$ superseded and rendered ineffective and %ithout legal force and effect 'Moreover$ these e3emptions shall not be affected by subse9uent la%s to the contrary unless this section is e3pressly$ specifically and categorically revo&ed or repealed by la% and a provision is enacted to substitute or replace the e3emption referred to herein as an essential factor to maintain or protect the solvency of the fund$ not%ithstanding and independently of the guaranty of the national government to secure such solvency or liability ')he funds and:or the properties referred to herein as %ell as the benefits$ sums or monies corresponding to the benefits under this -ct shall be e3empt from attachment$ garnishment$ e3ecution$ levy or other processes issued by the courts$ 9uasi,8udicial agencies or administrative bodies including Commission on -udit 4C+-5 disallo%ances and from all financial obligations of the members$ including his pecuniary accountability arising from or caused or occasioned by his e3ercise or performance of his official functions or duties$ or incurred relative to or in connection

%ith his position or %or& e3cept %hen his monetary liability$ contractual or other%ise$ is in favor of the .S*S

3&. A$M%N%'TRAT%)N 'S(C "= *mplementing Body , )he .overnment Service *nsurance System as created under Common%ealth -ct No !6# shall implement the provisions of this -ct 'S(C "! Po%ers and Aunctions of the .S*S , )he .S*S shall e3ercise the follo%ing po%ers and functions: 4a5 to formulate$ adopt$ amend and:or rescind such rules and regulations as may be necessary to carry out the provisions and purposes of this -ct$ as %ell as the effective e3ercise of the po%ers and functions$ and the discharge of duties and responsibilities of the .S*S$ its officers and employees7 4b5 to adopt or approve the annual and supplemental budget of receipts and e3penditures including salaries and allo%ances of the .S*S personnel7 to authoriBe such capital and operating e3penditures and disbursements of the .S*S as may be necessary and proper for the effective management and operation of the .S*S7 4c5 to invest the funds of the .S*S$ directly or indirectly$ in accordance %ith the provisions of this -ct7 4d5 to ac9uire$ utiliBe or dispose of$ in any manner recogniBed by la%$ real or personal property in the Philippines or else%here necessary to carry out the purposes of this -ct7 4e5 to conduct continuing actuarial and statistical studies and valuations to determine the financial Gcondition of the .S*S and ta&ing into consideration such studies and valuations and the limitations herein provided$ re,ad8ust the benefits$

contributions$ premium rates$ interest rates or the allocation or re,allocation of the funds to the contingencies covered7 4f5 to have the po%er of succession7 4g5 to sue and be sued7 4h5 to enter into$ ma&e$ perform and carry out contracts of every &ind and description %ith any person$ firm or association or corporation$ domestic or foreign7 4i5 to carry on any other la%ful business %hatsoever in pursuance of$ or in connection %ith the provisions of this -ct7 485 to have one or more offices in and outside of the Philippines$ and to conduct its business and e3ercise its po%ers throughout and in any part of the Republic of the Philippines and:or in any or all foreign countries$ states and territories: Provided$ )hat the .S*S shall maintain a branch office in every province %here there e3ists a minimum of fifteen thousand 4!;$===5 membership7 4&5 to borro% funds from any source$ private or government$ foreign or domestic$ only as an incident in the securitiBation of housing mortgages of the .S*S and on account of its receivables from any government or private entity7 4l5 to invest$ o%n or other%ise participate in e9uity in any establishment$ firm or entity7 4m5 to approve appointments in the .S*S e3cept appointments to positions %hich are policy determining$ primarily confidential or highly technical in nature according to the Civil Service rules and regulations: Provided$ )hat all positions in the .S*S shall be governed by the compensation and position classification system and 9ualifications standards approved by the .S*S Board of )rustees based on a comprehensive 8ob analysis and audit of actual duties and responsibilities: Provided$ further$ )hat the compensation

plan shall be comparable %ith the prevailing compensation plans in the private sector and shall be sub8ect to the periodic revie% by the Board no more than once every four 4"5 years %ithout pre8udice to yearly merit revie%s or increases based on productivity and profitability7 4n5 to design and adopt an (arly Retirement *ncentives Plan 4(R*P5 and:or financial assistance for the purpose of retirement for its o%n personnel7 4o5 to fi3 and periodically revie% and ad8ust the rates of interest and other terms and conditions for loans and credits e3tended to members or other persons$ %hether natural or 8uridical7 4p5 to enter into agreement %ith the Social Security System or any other entity$ enterprise$ corporation or partnership for the benefit of members transferring from one system to another sub8ect to the provisions of Republic -ct No 0#//$ other%ise &no%n as the Portability ?a%7 495 to be able to float proper instrument to li9uefy long,term maturity by pooling funds for short,term secondary mar&et7 4r5 to submit annually$ not later than Eune <=$ 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 -ct during the preceding year including information and recommendations on board policies for the development and perfection of the programs of the .S*S7 4s5 to maintain a provident fund$ %hich consists of contributions made by both the .S*S 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 prescribe7 4t5 to approve and adopt guidelines affecting investments$ insurance coverage of government properties$ settlement of

claims$ disposition of ac9uired assets$ privatiBation or e3pansion of subsidiaries$ development of housing pro8ects$ increased benefit and loan pac&ages to members$ and the enforcement of the provision of this -ct7 4u5 any provision of la% to the contrary not%ithstanding$ to authoriBe the payment of e3tra remuneration to the officials and employees directly involved in the collection and:or remittances of contributions$ loan repayments$ and other monies due to the .S*S at such rates and under such conditions as it may adopt: Provided$ )hat the best interest of the .S*S shall be observed thereby7 4v5 to determine$ fi3 and impose interest upon unpaid premiums due from employers and employees7 4%5 to ensure the collection or recovery of all indebtedness$ liabilities and:or accountabilities$ including unpaid premiums or contributions in favor of the .S*S arising from any cause or source %hatsoever$ due from obligors$ %hether public or private )he Board shall demand payment or settlement of the obligations referred to herein %ithin thirty 4<=5 days from the date the obligation becomes due$ and in the event of failure or refusal of the obligor or debtor to comply %ith the demand$ to initiate or institute the necessary or proper actions or suits$ criminal$ civil or administrative or other%ise$ before the courts$ tribunals$ commissions$ boards$ or bodies of proper 8urisdiction %ithin thirty 4<=5 days rec&oned from the e3piry date of the period fi3ed in the demand %ithin %hich to pay or settle the account7 435 to design and implement programs that %ill promote and mobiliBe savings and provide additional resources for social security e3pansion and at the same time afford individual members appropriate returns on their savings:investments

)he programs shall be so designed as to spur socio, economic ta&e,off and maintain continued gro%th7 and 4y5 to e3ercise such po%ers and perform such other acts as may be necessary$ useful$ incidental or au3iliary to carry out the provisions of this -ct$ or to attain the purposes and ob8ectives of this -ct 'S(C "1 )he Board of )rustees7 its Composition7 )enure and Compensation , )he corporate po%ers and functions of the .S*S shall be vested in and e3ercised by the Board of )rustees composed of the President and .eneral Manager of the .S*S and eight 465 other members to be appointed by the President of the Philippines$ one 4!5 of %hom shall be either the President of the Philippine Public School )eachers -ssociation 4PPS)-5 or the President of the Philippine -ssociation of School Superintendents 4P-SS5$ another t%o 415 shall represent the leading organiBations or associations of government employees:retirees$ another four 4"5 from the ban&ing$ finance$ investment$ and insurance sectors$ and one 4!5 recogniBed member of the legal profession %ho at the time of appointment is also a member of the .S*S )he )rustees shall elect from among themselves a Chairman %hile the President and .eneral Manager of the .S*S shall automatically be the vice,chairman )he )rustees$ e3cept the President and .eneral Manager %ho shall cease as trustee upon his separation$ shall hold office for si3 4#5 years %ithout reappointment$ or until their successors are duly appointed and 9ualified Facancy$ other than through the e3piration of the term$ shall be filled for the une3pired term only )he members of the Board shall be entitled to a per diem of )%o thousand five hundred pesos 4P1$;== ==5 for each board meeting actually attended by them$ but not to e3ceed )en thousand pesos 4P!=$=== ==5 a month and reasonable transportation and representation allo%ances as may be fi3ed by the Board

'S(C "< Po%ers and Aunctions of the Board of )rustees , )he Board of )rustees shall have the follo%ing po%ers and functions: '4a5 to formulate the policies$ guidelines and programs to effectively carry out the purposes of this -ct7 '4b5 to promulgate such rules and regulations as may be necessary or proper for the effective e3ercise of the po%ers and functions as %ell as the discharge of the duties and responsibilities of the .S*S$ its officers and employees7 '4c5 upon the recommendation of the President and .eneral Manager$ to approve the annual and supplemental budget of receipts and e3penditures of the .S*S$ and to authoriBe such operating and capital e3penditures and disbursements of the .S*S as may be necessary or proper for the effective management$ operation and administration of the .S*S7 '4d5 upon the recommendation of the President and .eneral Manager$ to approve the .S*S organiBational and administrative structure and staffing pattern$ and to establish$ fi3$ revie%$ revise and ad8ust the appropriate compensation pac&ages for the officers and employees of the .S*S and reasonable allo%ances$ incentives$ bonuses$ privileges and other benefits as may be necessary or proper for the effective management$ operation and administration of the .S*S$ %hich shall be e3empt from Republic -ct No #0;6$ other%ise &no%n as the -ttrition ?a%7 '4e5 to fi3 and periodically revie% and ad8ust the rates of interest and other terms and conditions for loans and credits e3tended to its members or other persons$ %hether natural or 8uridical7 '4f5 the provision of any la% to the contrary not%ithstanding$ to compromise or release$ in %hole or in part$ any claim or settle liability to the .S*S$ regardless of the amount involved$

under such terms and conditions as it may impose for the best interest of the .S*S7 '4g5 to approve and adopt guidelines affecting investments$ insurance coverage of government properties$ settlement of claims$ disposition of ac9uired assets$ development of housing pro8ects$ increased benefit and loan pac&ages to members$ and the enforcement of the provisions of this -ct7 '4h5 to determine$ fi3$ and impose interest upon unpaid or unremitted premiums and:or contributions7 and '4i5 to do and perform any and all acts necessary$ proper or incidental to the attainment of the purposes and ob8ectives of this -ct 'S(C "" -ppointment$ @ualifications$ and Compensation of the President and .eneral Manager and of other Personnel , )he President and .eneral Manager of the .S*S shall be its Chief (3ecutive +fficer and shall be appointed by the President of the Philippines He shall be a person %ith management and investments e3pertise necessary for the effective performance of his duties and functions under this -ct ')he .S*S President and .eneral Manager shall be assisted by one or more e3ecutive vice,presidents$ senior vice,presidents and managers in addition to the usual supervisory and ran&,and,file positions %ho shall be appointed and removed by the President and .eneral Manager %ith the approval of the Board$ in accordance %ith the e3isting Civil Service rules and regulations 'S(C "; Po%ers and Duties of the President and .eneral Manager , )he President and .eneral Manager of the .S*S shall$ among others$ e3ecute and administer the policies and resolutions approved by the Board and direct and supervise the administration and operations of the .S*S )he President and .eneral Manager$ sub8ect to the approval of the Board$ shall appoint the personnel of the .S*S$ remove$ suspend or other%ise

discipline them for cause$ in accordance %ith the e3isting Civil Service rules and regulations$ and prescribe their duties and 9ualifications to the end that only competent persons may be employed 'S(C "# -uditor , 4a5 )he Chairman of the Commission on -udit shall be the e3 officio auditor of the .S*S$ and the necessary personnel to assist said representative in the performance of his duties '4b5 )he Chairman of the Commission on -udit or his authoriBed representatives$ shall submit to the Board soon after the close of each calendar year$ an audited statement sho%ing the financial condition and progress of the .S*S for the calendar year 8ust ended 'S(C "0 ?egal Counsel , )he .overnment Corporate Counsel shall be the legal adviser and consultant of the .S*S$ but the .S*S may assign to the +ffice of the .overnment Corporate Counsel 4+.CC5 cases for legal action or trial$ issues for legal opinions$ preparation and revie% of contracts:agreements and others$ as the .S*S may decide or determine from time to time: Provided$ ho%ever$ )hat the present legal services group in the .S*S shall serve as its in,house legal counsel ')he .S*S may$ sub8ect to approval by the proper court$ deputiBe any personnel of the legal service group to act as special sheriff in the enforcement of %rits and processes issued by the court$ 9uasi,8udicial agencies or administrative bodies in cases involving the .S*S 'S(C "6 Po%ers of the *nsurance Commission , )he *nsurance Commissioner or his authoriBed representatives shall ma&e an e3amination of financial condition and methods of transacting business of the .S*S at least once every three 4<5 years and the report of said e3amination shall be submitted to the Board of )rustees and copies thereof be furnished the +ffice of the

President of the Philippines and the t%o houses of the Congress of the Philippines %ithin five 4;5 days after the close of e3amination: Provided$ ho%ever$ )hat for each e3amination$ the .S*S shall pay the office of the *nsurance Commissioner an amount e9ual to the actual e3penses incurred by the said office in the conduct of e3amination$ including the salaries of the e3aminers and of the actuary of such e3amination for the actual time spent

3-. &#N#RA( PR).%'%)N 'S(C "/ Dispensation of Social *nsurance Benefits , 4a5 )he .S*S shall pay the retirement benefits to the employee on his last day of service in the government: Provided$ )hat all re9uirements are submitted to the .S*S %ithin a reasonable period prior to the effective date of the retirement7 '4b5 )he .S*S shall discontinue the processing and ad8udication of retirement claims under R - No !#!# e3cept refund of retirement premium under R - No /!= *nstead$ all agencies concerned shall process and pay the gratuities of their employees )he Board shall adopt the proper rules and procedures for the implementation of this provision 'S(C ;= Development and Disposition of -c9uired -ssets , )he .S*S shall have the right to develop and dispose of its ac9uired assets obtained in the ordinary course of its business )o add value to$ improve profitability on$ and:or enhance the mar&etability of an ac9uired asset$ the .S*S may further develop:renovate the same either %ith its o%n capital or through a 8oint venture arrangement %ith private companies or individuals ')he .S*S may sell its ac9uired assets in accordance %ith e3isting Commission on -udit 4C+-5 rules and regulations for an amount not lo%er than the current mar&et value of the property Aor this purpose$ the .S*S shall conduct an annual appraisal of

its property or ac9uired assets to determine its current mar&et value -ll notices of sale shall be published in ne%spapers of general circulation 'No in8unction or restraining order issued by any court$ commission$ tribunal or office shall bar$ impede or delay the sale and disposition by the .S*S of its ac9uired assets e3cept on 9uestions of o%nership and national or public interest 'S(C ;! .overnment -ssistance to the .S*S , )he .S*S may call upon any employer for such assistance as may be necessary in the discharge of its duties and functions

3%. P#NA( PR).%'%)N' 'S(C ;1 Penalty , 4a5 -ny person found to have participated directly or indirectly in the commission of fraud$ collusion$ falsification$ or misrepresentation in any transaction %ith the .S*S$ %hether for him or for some other persons$ shall suffer the penalties provided for in -rticle !01 of the Revised Penal Code '4b5 Dhoever shall obtain or receive any money or chec& invo&ing any provision of this -ct or any agreement thereunder$ %ithout being entitled thereto %ith the intent to defraud any member$ any employer$ the .S*S$ or any third party$ shall be punished by a fine of not less than Aive thousand pesos 4P;$=== ==5 nor more than )%enty thousand pesos 4P1=$=== ==5 or by imprisonment of not less than si3 4#5 years and one 4!5 day to t%elve 4!15 years$ or both$ at the discretion of the court '4c5 Dhoever fails or refuses to comply %ith the provisions of this -ct or %ith the rules and regulations adopted by the .S*S$ shall be punished by a fine of not less than Aive thousand pesos 4P;$=== ==5 nor more than )%enty thousand pesos 4P1=$=== ==5 or imprisonment of not less than si3 4#5 years and one 4!5 day to t%elve 4!15 years$ or both$ at the discretion of the court '4d5 )he treasurer$ finance officer$ cashier$ disbursing officer$ budget officer or other official or employee %ho fails to include in

the annual budget the amount corresponding to the employer and employee contributions$ or %ho fails or refuses or delays by more than thirty 4<=5 days from the time such amount becomes due and demandable$ or to deduct the monthly contributions of the employee shall$ upon conviction by final 8udgment$ suffer the penalties of imprisonment from si3 4#5 months and one 4!5 day to si3 4#5 years$ and a fine of not less than )hree thousand pesos 4P<$=== ==5 but not more than Si3 thousand pesos 4P#$=== ==5$ and in addition$ shall suffer absolute perpetual dis9ualification from holding public office and from practicing any profession or calling licensed by the government '4e5 -ny employee or member %ho receives or &eeps fund or property belonging$ payable or deliverable to the .S*S and appropriates the same$ or ta&es or misappropriates or uses the same for any purpose other than authoriBed by this -ct$ or permits another person to ta&e$ misappropriate or use said fund or property by e3pressly consenting thereto$ or through abandonment or negligence$ or is other%ise guilty of the misappropriation of said fund or property$ in %hole or in part$ shall suffer the penalties provided in -rticle 1!0 of the Revised Penal Code$ and in addition$ shall suffer absolute perpetual dis9ualification from holding public office and from practicing any profession or calling licensed by the government '4f5 -ny employee %ho$ after deducting the monthly contribution or loan amortiBation from a memberCs compensation$ fails to remit the same to the .S*S %ithin thirty 4<=5 days from the date they should have been remitted under Section #4a5$ shall be presumed to have misappropriated such contribution or loan amortiBation and shall suffer the penalties provided in -rticle <!; of the Revised Penal Code$ and in addition$ shall suffer absolute perpetual dis9ualification from holding public office and from practicing any profession or calling licensed by the government

'4g5 )he heads of the offices of the national government$ its political subdivisions$ branches$ agencies and instrumentalities$ including government,o%ned or controlled corporations and government financial institutions$ and the personnel of such offices %ho are involved in the collection of premium contributions$ loan amortiBation and other accounts due the .S*S %ho shall fail$ refuse or delay the payment$ turnover$ remittance or delivery of such accounts to the .S*S %ithin thirty 4<=5 days from the time that the same shall have been due and demandable shall$ upon conviction by final 8udgment$ suffer the penalties of imprisonment of not less than one 4!5 year nor more than five 4;5 years and a fine of not less than )en thousand pesos 4P!=$=== ==5 nor more than )%enty thousand pesos 4P1=$=== ==5$ and in addition$ shall suffer absolute perpetual dis9ualification from holding public office and from practicing any profession or calling licensed by the government '4h5 )he officers and:or personnel referred to in paragraph 4g5 of this section shall be liable not only criminally but also civilly to the .S*S or to the employee or member concerned in the form of damages$ including surcharges and interests '4i5 Aor the charges or complaints referred to in paragraph 4g5 of this section$ the liabilities therein set forth shall be construed as %aiver of the State of its immunity from suit$ hence$ the above, mentioned officials and:or personnel may not invo&e the defense of non,suability of the State '485 Aailure of the Members of the .S*S Board$ including the chairman and the vice,chairman$ to comply %ith the provisions of paragraph 4%5 of Section "! hereof$ shall sub8ect them to imprisonment of not less than si3 4#5 months nor more than one 4!5 year or a fine of not less than Aive thousand pesos 4P;$=== ==5 nor more than )en thousand pesos 4P!=$=== ==5 %ithout pre8udice to any civil or administrative liability %hich may also arise therefrom

'4&5 Criminal actions arising from violations of the provisions of this -ct may be commenced by the .S*S or by the aggrieved member$ either under this -ct or$ in appropriate cases$ under the Revised Penal Code 'S(C ;< *mplementing Rules and Regulations , )he implementing rules and regulations to carry out the provisions of this -ct shall be adopted and promulgated by the .S*S not later than ninety 4/=5 days after the approval of this -ct 'S(C ;" Non,impairment of Benefits$ Po%ers$ Eurisdiction$ Rights$ Privileges$ Aunctions and -ctivities , Nothing in this -ct shall be construed to repeal$ amend or limit any provision of e3isting la%s$ Presidential Decrees and ?etters of *nstructions$ not other%ise specifically inconsistent %ith the provisions of this -ct 'S(C ;; (3clusiveness of Benefits , Dhenever other la%s provide similar benefits for the same contingencies covered by this -ct$ the member %ho 9ualifies to the benefits shall have the option to choose %hich benefits %ill be paid to him Ho%ever$ if the benefits provided by the la% chosen are less than the benefits provided under this -ct$ the .S*S shall pay only the difference 'S(C ;# -ppropriations , )he amount necessary to carry out the provisions of this -ct shall be included in the respective budgets of the agencies in the national government obligation program of the year follo%ing its enactment into la% and thereafter ' 'ection 2. 'eparability Clause. , Should any provision of this -ct 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 'ection 3. Repealing Clause. , -ll la%s and any other la% or parts of la% specifically inconsistent here%ith are hereby repealed or

modified accordingly: Provided$ )hat the rights under the e3isting la%s$ rules and regulations vested upon or ac9uired by an employee %ho is already in the service as of the effectivity of this -ct shall remain in force and effect: Provided$ further$ )hat subse9uent to the effectivity of this -ct$ a ne% employee or an employee %ho has previously retired or separated and is reemployed in the service shall be covered by the provisions of this -ct 'ection *. #ffecti4ity. , )his -ct shall ta&e effect fifteen 4!;5 days after its publication in the +fficial .aBette or in at least t%o 415 ne%spapers of general circulation )his -ct$ %hich is a consolidation of Senate Bill No 1=!< and House Bill No 6;#!$ %as finally passed by the Senate and the House of Representatives on May 1/$ !//0 and May 16$ !//0$ respectively -pproved: May 3 ! 199"