Government Service Insurance

System

The GSIS is a government owned and controlled

corporation (GOCC) of the Philippines by virtue of
Commonwealth Act No. 186 that was passed on
November 14, 1936, and later amended under
Republic Act No. 8291 dated June 24, 1997.
In a nutshell, the law mandates compulsory
membership in the Government Service Insurance
System (GSIS for brevity) for all employees
receiving compensation who have not reached the
compulsory retirement age, irrespective of
employment status.

Purpose

GSIS, as designed in its charter, is a

social insurance institution under a
defined benefit scheme. It insures its
members against the occurrence of
certain contingencies in exchange for
their monthly premium contributions.

Coverage

The GSIS covers all government workers irrespective of their

employment status, except:

Members of the Judiciary and Constitutional Commissions who are covered

by separated retirement laws;
Contractual employees who have no employee-employer relationship with
their agencies;
Uniformed members of the Armed Forces of the Philippines and the
Philippine National Police, including the Bureau of Jail Management and
Penology and the Bureau of Fire Protection.
Barangay and Sanggunian Officials who are not receiving fixed monthly
compensation;
Contractual Employees who are not receiving fixed monthly compensation;
and
Employees who do not have monthly regular hours of work and are not
receiving fixed monthly compensation.

Organization

The governing and policy-making body of the GSIS is

the Board of Trustees, the members of which are
appointed by the President of the Philippines. It is
headed by the President and General Manager of the
GSIS which shall be appointed by the President of the
Philippines.

The President and General Manager of the GSIS shall

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

Membership in the
GSIS

Membership in the GSIS shall be compulsory

for all employees receiving compensation who
have not reached the compulsory retirement
age, irrespective of employment status.
The effective date of membership shall be the
date of the members assumption to duty on
his original appointment or election to public
office. A member separated from the service
shall continue to be a member, and shall be
entitled to whatever benefits he has qualified
to in the event of any contingency
compensable under this Act.

Classes of
Membership

As to type of members, there are regular and

special members:
Regular Members are those employed by the
government of the Republic of the Philippines, national
or local, legislative bodies, government-owned and
controlled corporations (GOCC) with original charters,
government financial institutions (GFIs), who are
required by law to remit regular monthly contributions
to the GSIS.
Special Members are constitutional commissioners,
members of the judiciary, including those with
equivalent
ranks,
who
are
required by law to remit regular monthly contributions
for life insurance policies to the GSIS in order to answer

Classes of
Membership

As to status of membership, there are active and

inactive members.
Active member refers to a member of the
GSIS, whether regular or special, who is still in
the government service and together with the
government agency to which he belongs, is
required to pay the monthly contribution.
Inactive member a member who is separated
from the service either by resignation,
retirement, disability, dismissal from the
service, retrenchment or, who is deemed retired
from the service under this Act.

Computation of Amount of
Contribution

For Regular Members

Employees Share
(Member)

Employers Share
(Government)

9% of Actual Monthly
Salary

12% of Actual Monthly

Salary

For Special Members

The Special Member shall pay the required life
insurance premiums of 3% of the fixed monthly
compensation for both employees and government
agencys share.

Remittance of contribution to GSIS

Each government agency shall remit directly to the GSIS

the employees and government agencys contributions
within the first Ten (10) days of the calendar month
following the month to which the contributions apply and
shall take priority over and above the payment of any and
all obligations, except salaries and wages of its
employees.
The government agency shall also deduct from the fixed
monthly compensation of the employee the loan
amortizations, premium payments and other amounts due
the GSIS. The said amounts shall be remitted to the GSIS
within the first Ten (10) days of the calendar month
following the month when the deductions were effected

Penalty for Late

Remittances

For the Agencies, the following penalties are imposed if it fails

to remit loan amortizations within 30 days from the time it
received a billing notice from GSIS:

Agency pays not less than two percent (2%) interest per
month on unremitted collections computed from the due
date and until the time GSIS receives the payments

The head of agency and other officials who failed to remit

to GSIS the loan amortizations will face administrative and
criminal charges and if convicted by the court, will be
imprisoned from one to five years and be fined with
amount ofP10,000.00 to P20,000.00

Those convicted will pay the surcharges and interests

incurred from the unpaid loans of all the agencys
members.

Penalty for Late Remittances

For the Members the following are the

consequences on the members for refusing to
pay their loan amortizations on time:

Annual dividend privileges are cancelled

All unpaid loans, including interests and
surcharges, will be deducted from the proceeds
of the loans and the claims that will be due the
member especially their retirement claims.