R.A. 4968

REPUBLIC ACT No. 4968

AN ACT AMENDING FURTHER COMMONWEALTH ACT NUMBERED ONE HUNDRED AND EIGHTY-SIX, AS AMENDED.

Section 1. Subparagraph (e) of the first paragraph of Section two of Commonwealth Act Numbered One hundred eighty-six, as amended, is further amended to read as follows:

Section 2. Subsection (a) of Section four of the same Act, as amended, is hereby further amended to read as follows:

Section 3. Subsection (a) of Section five of the same Act is hereby further amended to read as follows:

"Sec. 5. (a) Rates of contribution or premiums. For the benefits described hereunder, each official or employee who is a member of the System and his employer shall pay the monthly rates of contributions or premiums specified in the following schedule:

"It shall be compulsory for each employer to pay its share of the premiums or contributions in accordance with the rates indicated above, unless it requests reduction of said rates and the System finds, after an examination of said employer's financial condition, that it cannot afford to pay said rates, in which case it shall pay only such rates of premiums or contributions as the System may consider within its capacity to pay. In case of such reduction, the benefits payable to the member and/or his beneficiaries shall be adjusted actuarially in accordance with such rules and regulations as the System shall adopt.

"Payment of premium for retirement insurance shall begin on the last day of June, nineteen hundred and fifty-one or of the calendar month the employee entered the service or become covered by his retirement plan, whichever is the later date, and that for life insurance shall begin on the last day of the calendar month preceding the month in which one's insurance takes effect: Provided, however, That retirement premiums shall not be required of Justices of the Supreme Court and the Court of Appeals, and Judges of the Courts of First Instance, Agrarian Relations, Industrial Relations, Tax Appeals and Juvenile and Domestic Relation Courts, officers and enlisted men of the Armed Forces of the Philippines who as hereby excluded from said benefit.

"Unpaid premiums or contributions shall bear such rate of interest not exceeding six per centum per annum as the Board may prescribe."

Section 4. Subsection (a) of Section seven of the same Act is hereby further amended to read as follows:

"Sec. 7. Additional amounts or premiums. (a) For the amount of annuity corresponding to the services rendered by an employee prior to June sixteen, nineteen hundred and fifty-one, the National Government shall pay the necessary additional amounts or premiums as may be determined by the System, which shall be paid in equal annual amortizations at the rate of seventeen million three hundred thousand pesos beginning with the year nineteen hundred and sixty-seven for a period of fifty years or until the said additional amounts or premiums shall have been fully paid which amounts of seventeen million three hundred thousand pesos is hereby set aside and appropriated out of any funds in the National Treasury.

"The increase in the additional amounts or premiums for the annuity corresponding to the services rendered prior to the approval of this amendatory Act due to increase in retirement benefits provided for in this amendatory Act, as may be determined by the System shall likewise be paid by the National Government in equal yearly amortizations for a period of forty years, in the same manner as provided for in the next preceding paragraph, such amortization to commence not earlier than ten years from the date of approval of this amendatory Act. The sums necessary for this purpose are deemed appropriated in accordance with Section twenty-seven of this Act."

Section 5. Subsections (a), (b) and (c) of Section eleven of the same Act, as amended are hereby further amended to read as follows:

"Sec. 11(a). Amount of annuity. Upon retirement after faithful and satisfactory service a member shall be automatically entitled to a life annuity guaranteed for at least five years and thereafter as long as he lives. The amount of the monthly annuity at the age of fifty-seven years shall be thirty pesos, plus for each year of service after the sixteenth of June, nineteen hundred and fifty-one, two per centum of the average monthly salary received by him during the last three years of service, plus for each year of service rendered prior to the sixteenth of June, nineteen hundred and fifty-one, one and two-tenths per centum of said average monthly salary: Provided, That this amount shall be adjusted actuarially if retirement be at an age other than fifty-seven years: Provided, further, That the maximum amount of monthly annuity at age fifty-seven shall not in any case exceed three fourths of said average monthly salary: And provided, finally, That retirement benefit shall be paid not earlier than one year after the approval of this Act. In lieu of this annuity, he may prior to his retirement elect one of the following equivalent benefits:

Section 6. Subsection (c) of Section twelve of the same Act, as inserted by Republic Act Numbered One thousand six hundred and sixteen, as amended, is hereby further amended to read as follows:

"An employee who retires under this subsection (c) may not be eligible for retirement with gratuity or pension under Subsection (a) of Section eleven of this Act, as amended, or vice versa, unless he makes a written application therefore within one year after retirement and reimburses the retirement gratuity or pension previously received by him, as well as refunds the personal and employer's premiums as the case may be."

Section 7. Subsection (e) of Section twelve of the same Act, as amended, is hereby further amended to read as follows:

"The automatic and compulsory retirement age for members of the judiciary shall be seventy years under the conditions and with all the benefits provided for in the next preceding paragraph.

"If a member exercises the option to retire pursuant to the provisions of Subsection (a) above at age sixty-three years, he shall likewise be entitled to all the benefits provided for in the first paragraph of this subsection. If the option is exercised at age sixty or over but below sixty-three years, the retiree shall be entitled to a lump-sum payment of present value of annuity for the first three years, with the balance of the five-year guaranteed annuity payable in lump-sum upon reaching the age of sixty-three years, and future annuity to be paid monthly, in addition to other benefits provided for in Republic Act Numbered Six hundred and sixty, as amended.

"It shall be the duty of the employer concerned to notify each employee under its direction of the date of his automatic separation from the service at least sixty days in advance thereof."

Section 8. Section eighteen of the same Act, as amended, is hereby further amended so as the first sentence thereby shall read as follows:

"Sec. 18. The Board shall have the power to appoint a president who shall be a person of recognized experience and capacity in the subject of life and social insurance, and who shall be the chief executive of the System, an executive vice president, a senior vice president and actuary, one or more vice presidents, one or more assistant vice presidents, one or more managers, a medical director, and fix their compensation."

Section 9. A new paragraph is hereby added after subsection (a) of Section twenty-eight of the same Act, as amended, which shall read as follows:

"Republic Act Numbered One thousand five hundred and sixty-eight, as amended, and Republic Act Numbered Three thousand and sixteen are also hereby declared inoperative or abolished; Provided, That the rights of those already retired thereunder shall not be affected; And provided, further, That an official or person who is eligible for retirement under any of the aforementioned acts or any other acts may elect and reserve his right to retire thereunder and shall be entitled to the retirement benefit described therein only if he so chooses and notifies the System in writing within one year from the date of approval of this amendatory Act, otherwise it shall be deemed that he elects to be retired under this Act."

Section 10. Subsection (b) of Section twenty-eight of the same Act, as amended is hereby further amended to read as follows:

Section 11. All laws or parts of laws which are inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

Section 12. This Act shall take effect upon its approval.

Approved: June 17, 1967