GSIS Act of 1997

Section 40

The Government Service Insurance System as created under Commonwealth Act No. 186 shall implement the provisions of this Act.

Section 41

The GSIS shall exercise the following powers and functions: (a) to formulate, adopt, amend and/or rescind such rules and regulations as may be necessary to carry out the provisions and purposes of this Act, as well as the effective exercise of the powers and functions, and the discharge of duties and responsibilities of the GSIS, its officers and employees; (b) to adopt or approve the annual and supplemental budget of receipts and expenditures including salaries and allowances of the GSIS personnel; to authorize such capital and operating expenditures and disbursements of the GSIS as may be necessary and proper for the effective management and operation of the GSIS; (c) to invest the funds of the GSIS, directly or indirectly, in accordance with the provisions of this Act; (d) to acquire, utilize or dispose of, in any manner recognized by law, real or personal property in the Philippines or elsewhere necessary to carry out the purposes of this Act; (e) to conduct continuing actuarial and statistical studies and valuations to determine the financial €condition of the GSIS and taking into consideration such studies and valuations and the limitations herein provided, re-adjust the benefits, contributions, premium rates, interest rates or the allocation or re-allocation of the funds to the contingencies covered; (f) to have the power of succession; (g) to sue and be sued; (h) to enter into, make, perform and carry out contracts of every kind and description with any person, firm or association or corporation, domestic or foreign; (i) to carry on any other lawful business whatsoever in pursuance of, or in connection with the provisions of this Act; (j) to have one or more offices in and outside of the Philippines, and to conduct its business and exercise its powers throughout and in any part of the Republic of the Philippines and/or in any or all foreign countries, states and territories: Provided, That the GSIS shall maintain a branch office in every province where there exists a minimum of fifteen thousand (15,000) membership; (k) to borrow funds from any source, private or government, foreign or domestic, only as an incident in the securitization of housing mortgages of the GSIS and on account of its receivables from any government or private entity; (l) to invest, own or otherwise participate in equity in any establishment, firm or entity; (m) to approve appointments in the GSIS except appointments to positions which are policy determining, primarily confidential or highly technical in nature according to the Civil Service rules and regulations: Provided, That all positions in the GSIS shall be governed by the compensation and position classification system and qualifications standards approved by the GSIS Board of Trustees based on a comprehensive job analysis and audit of actual duties and responsibilities: Provided, further, That the compensation plan shall be comparable with the prevailing compensation plans in the private sector and shall be subject to the periodic review by the Board no more than once every four (4) years without prejudice to yearly merit reviews or increases based on productivity and profitability; (n) to design and adopt an Early Retirement Incentives Plan (ERIP) and/or financial assistance for the purpose of retirement for its own personnel; (o) to fix and periodically review and adjust the rates of interest and other terms and conditions for loans and credits extended to members or other persons, whether natural or juridical; (p) to enter into agreement with the Social Security System or any other entity, enterprise, corporation or partnership for the benefit of members transferring from one system to another subject to the provisions of Republic Act No. 7699, otherwise known as the Portability Law; (q) to be able to float proper instrument to liquefy long-term maturity by pooling funds for short-term secondary market; (r) to submit annually, not later than June 30, 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 Act during the preceding year including information and recommendations on board policies for the development and perfection of the programs of the GSIS; (s) to maintain a provident fund, which consists of contributions made by both the GSIS 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 prescribe; (t) to approve and adopt guidelines affecting investments, insurance coverage of government properties, settlement of claims, disposition of acquired assets, privatization or expansion of subsidiaries, development of housing projects, increased benefit and loan packages to members, and the enforcement of the provision of this Act; (u) any provision of law to the contrary notwithstanding, to authorize the payment of extra remuneration to the officials and employees directly involved in the collection and/or remittances of contributions, loan repayments, and other monies due to the GSIS at such rates and under such conditions as it may adopt: Provided, That the best interest of the GSIS shall be observed thereby; (v) to determine, fix and impose interest upon unpaid premiums due from employers and employees; (w) to ensure the collection or recovery of all indebtedness, liabilities and/or accountabilities, including unpaid premiums or contributions in favor of the GSIS arising from any cause or source whatsoever, due from obligors, whether public or private. The Board shall demand payment or settlement of the obligations referred to herein within thirty (30) days from the date the obligation becomes due, and in the event of failure or refusal of the obligor or debtor to comply with the demand, to initiate or institute the necessary or proper actions or suits, criminal, civil or administrative or otherwise, before the courts, tribunals, commissions, boards, or bodies of proper jurisdiction within thirty (30) days reckoned from the expiry date of the period fixed in the demand within which to pay or settle the account; (x) to design and implement programs that will promote and mobilize savings and provide additional resources for social security expansion and at the same time afford individual members appropriate returns on their savings/investments. The programs shall be so designed as to spur socio-economic take-off and maintain continued growth; and (y) to exercise such powers and perform such other acts as may be necessary, useful, incidental or auxiliary to carry out the provisions of this Act, or to attain the purposes and objectives of this Act.

Section 42

The corporate powers and functions of the GSIS shall be vested in and exercised by the Board of Trustees composed of the President and General Manager of the GSIS and eight (8) other members to be appointed by the President of the Philippines, one (1) of whom shall be either the President of the Philippine Public School Teachers Association (PPSTA) or the President of the Philippine Association of School Superintendents (PASS), another two (2) shall represent the leading organizations or associations of government employees/retirees, another four (4) from the banking, finance, investment, and insurance sectors, and one (1) recognized member of the legal profession who at the time of appointment is also a member of the GSIS. The Trustees shall elect from among themselves a Chairman while the President and General Manager of the GSIS shall automatically be the vice-chairman. The Trustees, except the President and General Manager who shall cease as trustee upon his separation, shall hold office for six (6) years without reappointment, or until their successors are duly appointed and qualified. Vacancy, other than through the expiration of the term, shall be filled for the unexpired term only. The members of the Board shall be entitled to a per diem of Two thousand five hundred pesos (P2,500.00) for each board meeting actually attended by them, but not to exceed Ten thousand pesos (P10,000.00) a month and reasonable transportation and representation allowances as may be fixed by the Board.

Section 43

The Board of Trustees shall have the following powers and functions: (a) to formulate the policies, guidelines and programs to effectively carry out the purposes of this Act; (b) to promulgate such rules and regulations as may be necessary or proper for the effective exercise of the powers and functions as well as the discharge of the duties and responsibilities of the GSIS, its officers and employees; (c) upon the recommendation of the President and General Manager, to approve the annual and supplemental budget of receipts and expenditures of the GSIS, and to authorize such operating and capital expenditures and disbursements of the GSIS as may be necessary or proper for the effective management, operation and administration of the GSIS; (d) upon the recommendation of the President and General Manager, to approve the GSIS organizational and administrative structure and staffing pattern, and to establish, fix, review, revise and adjust the appropriate compensation packages for the officers and employees of the GSIS and reasonable allowances, incentives, bonuses, privileges and other benefits as may be necessary or proper for the effective management, operation and administration of the GSIS, which shall be exempt from Republic Act No. 6758, otherwise known as the Attrition Law; (e) to fix and periodically review and adjust the rates of interest and other terms and conditions for loans and credits extended to its members or other persons, whether natural or juridical; (f) the provision of any law to the contrary notwithstanding, to compromise or release, in whole or in part, any claim or settle liability to the GSIS, regardless of the amount involved, under such terms and conditions as it may impose for the best interest of the GSIS; (g) to approve and adopt guidelines affecting investments, insurance coverage of government properties, settlement of claims, disposition of acquired assets, development of housing projects, increased benefit and loan packages to members, and the enforcement of the provisions of this Act; (h) to determine, fix, and impose interest upon unpaid or unremitted premiums and/or contributions; and (i) to do and perform any and all acts necessary, proper or incidental to the attainment of the purposes and objectives of this Act.

Section 44

Appointment, Qualifications, and Compensation of the President and General Manager and of other Personnel. - The President and General Manager of the GSIS shall be its Chief Executive Officer and shall be appointed by the President of the Philippines. He shall be a person with management and investments expertise necessary for the effective performance of his duties and functions under this Act. The GSIS President and General Manager shall be assisted by one or more executive vice-presidents, senior 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.

Section 45

The President and General Manager of the GSIS shall, among others, execute and administer the policies and resolutions approved by the Board and direct and supervise the administration and operations of the GSIS. The President and General Manager, subject to the approval of the Board, shall appoint the personnel of the GSIS, remove, suspend or otherwise discipline them for cause, in accordance with the existing Civil Service rules and regulations, and prescribe their duties and qualifications to the end that only competent persons may be employed.

Section 46

(a) The Chairman of the Commission on Audit shall be the ex officio auditor of the GSIS, and the necessary personnel to assist said representative in the performance of his duties. (b) The Chairman of the Commission on Audit or his authorized representatives, shall submit to the Board soon after the close of each calendar year, an audited statement showing the financial condition and progress of the GSIS for the calendar year just ended.

Section 47

The Government Corporate Counsel shall be the legal adviser and consultant of the GSIS, but the GSIS may assign to the Office of the Government Corporate Counsel (OGCC) cases for legal action or trial, issues for legal opinions, preparation and review of contracts/agreements and others, as the GSIS may decide or determine from time to time: Provided, however, That the present legal services group in the GSIS shall serve as its in-house legal counsel. The GSIS may, subject to approval by the proper court, deputize any personnel of the legal service group to act as special sheriff in the enforcement of writs and processes issued by the court, quasi-judicial agencies or administrative bodies in cases involving the GSIS.

Section 48

The Insurance Commissioner or his authorized representatives shall make an examination of financial condition and methods of transacting business of the GSIS at least once every three (3) years and the report of said examination shall be submitted to the Board of Trustees and copies thereof be furnished the Office of the President of the Philippines and the two houses of the Congress of the Philippines within five (5) days after the close of examination: Provided, however, That for each examination, the GSIS shall pay the office of the Insurance Commissioner an amount equal to the actual expenses incurred by the said office in the conduct of examination, including the salaries of the examiners and of the actuary of such examination for the actual time spent.