decision - government service insurance system

! . '· . .... ...

: .

Republic of the Philippines GOVERNMENT SERVICE INSURANCE SYSTEM

Financial Center, Roxas Boulevard, Pasay City

BOARD OF TRUSTEES

ALVINO P. TOLENTINO, Petitione~

-versus-

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS),

Respondent.

GSIS Case No. 005-06

x-------------------------------------------------------------------------------------------------------x

DECISION

This is a Petition for re-computation of benefits under RA 8291

and for reimbursement of the following:

1. interest imposed on the retirement premiums previously

refunded to petitioner in his first retirement under RA 1616 on

July 25, 1987; and

2. interest imposed on the 5-year lump sum Basic Monthly Pension

(BMP) received by petitioner in his second retirement under RA

8291 onjanuary 10, 2004.

• .. '·

·-

of// Aluino P. Tolentino vs. GSIS


FACTS OF THE CASE

Petitioner retired from the service for the first time on July 25,

1987. He was then forty eight (48) years old and with a record of

creditable service (RCS) of 27.80753 years. He filed a claim for and

was paid retirement benefits under RA 1616 consisting of gratuity

benefit paid by his last employer and refund of retirement premiums -

government share without interest and personal share with interest -

paid by the GSIS.

On July 26, 1987, petitioner was re-employed in the Senate of

the Philippines until he retired for the second time after reaching the

age of 65 years old on january 10, 2004. When he filed a claim for

retirement benefit under RA 8291, his RCS of 27.80753 years credited

in his first retirement were not included in the computation of

retirement benefit in his second retirement. Only his 15.98058 years

service in the Senate of the Philippines was considered in the

computation of retirement benefit in his second retirement. For this

reason, he received his 5-year lump sum BMP in the amount of

PhP643,180.03 UNDER PROTEST.

The prayer of petitioner for re-computation of his retirement

benefit under RA 8291 was addressed and rendered moot and

academic when this Board promulgated Policy and Procedural

Guidelines No. 183-06 governing the processing of retirement claims

of re-employed government officials/employees who had previously

received retirement benefits, which provides:

III COVERAGE

The guidelines shall cover the following members who had previously retired and re-entered government service before june 24, 1997:

1. Those who had previously resigned/retired and reentered government service prior to the effective date of RA 8291 on june 24, 1997 and had received the corresponding benefits;

XXX XXX XXX

IV IMPLEMENTING POUCIES

ofll Aluino P. Tolentino vs. GSIS


1. An employee or member under any of the following situations shall be allowed to retire again with full service credit provided he refunds whatever benefits he had previously received, to wit:

1.1 Already retired and had received the corresponding GSIS retirement/separation benefit to the exclusion of service rendered under previous retirement;

2. The requirement for refund shall be subject to the following conditions:

2.1 the affected members shall have thirty (30) days, counted from the date of publication of this Policy, within which to refund to the System the applicable retirement benefits received by him from his previous retirement/separation, as follows:

o retirement gratuity paid by previous employer pursuant to Section 12 (g) of CA 186, as amended

o refund of retirement premiums personal and/or government shares paid by GSIS.

The claim of petitioner falls squarely under the aforequoted

provisions of PPG No. 183-06 because he previously retired and

received retirement benefits under Section 12 (g) of CA 186, as

amended by RA 1616, and re-entered government service on July 26,

1987 before the effectivity of RA 8291 on june 24, 1997.

. l :.

.·

of 11 Aluino P. Tolentino vs. GSIS


When petitioner filed his Letter of Intent (LOI) to refund to GSIS

the benefits he received from previous retirement, he was made to

refund to GSIS the following:

1. gratuity benefit, without interest, received by petitioner

from his last employer when he retired for the first

time under RA 1616;

2. retirement premiums, with interest previously

refunded to petitioner by GSIS when he retired for the

first time under RA 1616; and

3. 5-year lump sum BMP, with interest, received by

petitioner from GSIS when he retired for the second

time under RA 8291.

After the refund was made, the claim of petitioner was

recomputed. His previous services, which were considered in the

computation of his retirement benefits in his first retirement under RA

1616, were included in the computation of his retirement benefit in

his second retirement under RA 8291.

Accordingly, the retirement benefit of petitioner under RA 8291

was adjusted but he received the proceeds thereof UNDER PROTEST

on the ground that the imposition of interest on the retirement

premiums previously refunded to him under RA 1616 and 5-year lump

sum BMP he received under RA 8291 has no legal basis.

ISSUE

Whether the imposition of interest on the following has legal

basis:

. . .

off 1 Aluino P. Tolentino vs. GSJS

GSJS Case No. 005-06

1. retirement premiums previously refunded to petitioner

by GSIS when he retired for the first time under RA

1616;and

2. 5-year lump sum BMP received by petitioner from GSIS

when he retired for the second time under RA 82 91.

DISCUSSION

The respondents argued that they imposed interest on the

amount of retirement benefit (refund of retirement premiums under

RA 1616) paid by GSIS to petitioner in his previous retirement

pursuant to PPG No. 183-06 which provides:

2.2 with respect to the retirement/separation benefits actually paid by the GSIS to the retiree in his previous retirement/separation, the gross amount thereof shall be assessed a corresponding simple interest at the rate of two percent (2%) per month, computed from the date the said benefits were paid to him up to the actual date of his refund to the GSIS of the said benefits.

With regard to the interest imposed on the 5-year lump sum

BMP received by petitioner in his second retirement under RA 8291,

respondents argued that the same was imposed pursuant also to the

said provision of PPG No. 183-06. They further argued that they have

no authority to question the said PPG and have no other option but to

implement the same.

On respondents' argument that they imposed interest on the

amount of retirement benefit (refund of retirement premiums under

RA 1616) paid by GSIS pursuant to PPG No. 183-06, petitioner

of /1 Aluino P. Tolentino vs. GS/S


countered that he has vested rights acquired before the effectivity of

RA 8291 on June 24, 1997. These vested rights are protected under

Section 3 (Repealing Clause) of RA 8291, viz:

All laws and any other law or parts of law specifically inconsistent herewith are hereby repealed or modified accordingly: Provided, That the rights under existing laws, rules and regulations, vested upon or acquired by an employee who is already in the service as of the effectivity Qune 24, 1997) of this Act shall remain in force and effect :xxx

The vested rights referred to by the petitioner are those

provided for under Batas Pambansa Bilang 704, otherwise known as

An Act Amending Sections 10 and 12 of PD 1146, otherwise known as

the "Revised Government Service Insurance System Act of 1977", viz:

For the purpose of this section, all services rendered in the government by an employee, who was separated from office not for cause but due to government reorganization and subsequently reinstated in another office, shall be considered in the computation of his retirement benefits :xxx

All retirement benefits previously paid by the Government Service Insurance System, and not by a government office or agency which has been abolished, to an employee who was separated from office not for cause but due to government reorganization and subsequently reinstated in another office shall be accumulated and deducted, without interest, from the retirement benefits to be received by the employee upon his retirement. (underlining supplied)

On the issue of imposition of interest on the 5-year lump sum

BMP received by petitioner in his second retirement under RA 8291,

petitioner countered that no interest should be imposed because to do

so would be tantamount to penalizing him for the wrong done to him

by the GSIS.

We agree with the petitioner that the amount of retirement

premiums previously refunded to him by the GSIS, when he retired for

the first time under RA 1616, should not be imposed interest.



Petitioner correctly invoked the provisions of Batas Pambansa Bilang

704 (BP 704) in relation to Section 3 of RA 8291, which were earlier

quoted in this Decision. The provisions of BP 704 simply means that-

1. The services of a government employee, who was

separated from the service by reason of government

reorganization, shall be considered in the computation

of retirement benefits in case of re-employment and

subsequent retirement; and

2. The benefits previously paid by the GSIS to the said

employee shall be deducted, without interest, from the

retirement benefits of the said employee in case of re

employment and subsequent retirement.

The claim of petitioner falls squarely under the provisions of BP

704. Petitioner was separated (retired) from the service for the first

time in january 25, 1987 when his position of Chief Legal Counsel was

abolished pursuant to Executive Order No. 297 authorizing the

reorganization of the Office of the Press Secretary. He received

gratuity benefit from his last employer and refund of retirement

premiums - government share without interest and personal share

with interest- from the GSIS. Thereafter, he was re-employed in the

Senate of the Philippines on July 26, 1987 and retired again after

reaching the age of 65 years old on january 10, 2004. This being the

case, the benefits previously paid by GSIS to petitioner in his first

retirement under RA 1616 should only be deducted, without interest,

from the proceeds of his retirement under RA 8291. The processing,

therefore, of his claim for retirement benefit under RA 8291 was

flawed because -

1. the retirement premiums refunded to petitioner was

imposed interest ; and

2. he was made to produce cash and pay GSIS the

retirement premiums previously refunded to him.

.. . 0 •

of II Aluino P. Tolentino vs. GS!S


Nevertheless, we also agree with respondent in the sense that

PPG No. 183-06 was validly issued by this Board under its rule-making

power granted by the GSIS Charter. We likewise agree with

respondent that PPG No. 183-06, as a general rule, applies to the

processing of claims of re-employed government officials/employees

who previously received retirement benefit. However, the claim of

petitioner, more particularly on the issue of imposition of interest on

the benefit paid by GSIS, is an exception to PPG No. 183-06 because

BP 704 categorically stated that benefits paid by GSIS should not be

imposed interest if the member was separated from the service by

reason of government reorganization. However, BP 704 is part of

GSIS laws inasmuch as it amended certain provision thereof. In case

of conflict, therefore, between BP 704 and GSIS administered

retirement laws, the former shall prevail.

On the issue of imposition of interest on the 5-year lump sum

BMP received by petitioner from GSIS in his second retirement under

RA 8291, we disagree with the respondents that it is authorized under

PPG No. 183-06. In fact, there is no provision in PPG No. 183-06

requiring the petitioner to refund to GSIS the 5-year lump sum BMP.

PPG No. 183-06 is replete with provisions on this matter, viz:

2.1 the affected member/s shall have thirty (30) days xxx within which to refund to the System the applicable retirement benefits received by him from his previous retirement/separation xxx (underlining supplied).

2.2 with respect to the retirement/separation benefits actually paid by GSIS to the retiree in his previous retirement/separation, the gross amount thereof shall be assessed a corresponding simple interest of two percent (2%) per month xxx (underlining supplied).

2. 7 no refund of retirement/separation benefits received from previous retirement/separation shall be allowed to an employee/member who reentered government service on or after june 24, 1997 xxx (underlining supplied).

.. • • . ..

. · ~ .

of 11 Aluino P. Tolentino vs. GSIS

GSJS Case No. 005-06

It is very clear from the underlined provisions of PPG No. 183-

06 that only retirement/separation benefits received from previous

retirement/separation shall be refunded to GSIS and imposed interest.

The 5-year lump sum BMP is not a benefit received by petitioner from

his previous retirement under RA 1616. It is a retirement benefit he

received from his present retirement claim which is the subject

matter of this Petition. Therefore, if refund is not required, there is

no amount where the interest should be imposed.

WHEREFORE, premises considered, the Petition is hereby

GRANTED ordering the respondent to reimburse to petitioner the

total amount of interest imposed on the following;

1. retirement premiums previously refunded by the GSIS

to petitioner when he retired for the first time under

RA 1616; and

2. 5-year lump sum BMP received by petitioner from GSIS

when he retired for the second time under RA 8291.

SO ORDERED.

Pasay City, Philippines, __ 1 _0 _M_A_R_2_0_1l __

. . - of 11

Aluino P. Tolentino vs. GSIS GSJS Case No. 005-06

IEL L. IACSON, Jr. Chairman

:;: ?fdid; Re~GARA fB~~!~hQ=n GERALDINE MARIE BERBERABE-MARTINEZ Trustee

(ABSENT)

FRANCISCO T. DUQUE III Trustee

Copy furnished:

Rodelio T. Dascil, ESQ., MNSA Unit D, 140 M. Santos St., Pasay City

Atty. Aluino P. Tolentino 139 Evangelista St., Santolan, Pasig City

Trustee

(ABSENT) ROMAN FELIPE S. REYES

Trustee

.. J . } . , . . .... .

~. ,



CERTIFICATION

I, WILFREDO P. ONG, a Corporate Attorney in the GSIS Law

Office, having been assigned as Hearing Officer to draft a decision in

GSIS Board of Trustees Case No. 005-06 entitled "Aluino P. Tolentino

vs. Government Service Insurance System (GSIS)" hereby certify that

the statement of facts herein stated and being presented before this

Board is accurate and true, based on the records of the case, the

pleadings and other documents submitted by the parties.

This certification is issued this ________________ , in

compliance with Board Resolution No. 198-A adopted on September

15, 2004.

Pasay City, Philippines, ______________ __

.-

RESOLUTION NO. 71

)

BOARD MEETING NO. 5 MARCH 10, 2011

Page 23

RESOLVED, to APPROVE the Decision in GSIS Case No. 005-06 entitled Aluino P. Tolentino versus GSIS (for recomputation of benefits under RA 8291 and for reimbursement of the following: 1) interest imposed on the retirement premiums previously refunded to petitioner in his first retirement under RA 1616 on July 25, 1987; and 2) interest imposed on the 5-year lump sum Basic Monthly Pension (BMP) received by petitioner in his second retirement under RA 8291 on January 10, 2004), the dispositive portion of which reads as follows:

"WHEREFORE, premises considered, the Petition is hereby GRANTED ordering the respondent to reimburse to petitioner the total amount of interest imposed on the following:

1. retirement premiums previously refunded by the GSIS to petitioner when he retired for the first time under RA 1616; and

2. 5-year lump sum BMP received by petitioner from GSIS when he retired for the second time under RA 8291 ."

A copy of the Decision in GSIS Case No. 005-06 is attached and made an integral part of this Resolution.

decision - government service insurance system

Documents