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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
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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.
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Page 2 of// Aluino P. Tolentino vs. GSIS
GSIS Case No. 005-06
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
Page 3 ofll Aluino P. Tolentino vs. GSIS
GSIS Case No. 005-06
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.
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Page 4 of 11 Aluino P. Tolentino vs. GSIS
GSIS Case No. 005-06
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:
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Page 5 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
Page 6 of /1 Aluino P. Tolentino vs. GS/S
GSIS Case No. 005-06
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.
Page 7 ofll Aluino P. Tolentino vs. GSIS
GSIS Case No. 005-06
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.
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Page 8 of II Aluino P. Tolentino vs. GS!S
GSIS Case No. 005-06
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).
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Page 9 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 __
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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
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Page 11 ofll Aluino P. Tolentino vs. GSIS
GSIS Case No. 005-06
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, ______________ __
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RESOLUTION NO. 71
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BOARD MEETING NO. 5 MARCH 10, 2011
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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.