REPUBLIC ACT NO.

8291
The Government Service Insurance System Act of 1997

Coverage of the Law:

The GSIS covers government employees, irrespective of employment status, who

are employed with:

a) the national government, its political subdivisions, branches, agencies or

instrumentalities;
b) government-owned or controlled corporations;
c) government financial institutions with original charters;
d) constitutional commissions; and
e) the judiciary

Compulsory membership:

Membership with the GSIS is compulsory upon:

a) All government personnel who are receiving fixed monthly
compensation and have not reached the mandatory retirement age of
65 years (elective or appointive);
b) Elective officials who will be more than 65 years old at the end of his
term, which includes his re-election period without interruption;
c) Appointed officials by the President, who remain in office after reaching
65 years old;
d) Contractual or casual employees who receive fixed monthly
compensations and render complete working hours for the month.

Employees not subject to compulsory coverage:

The following employees are excluded from compulsory coverage of the law:
a) Uniformed personnel of the Armed Forces of the Philippines (AFP),
Philippine National Police (PNP), Bureau of Fire Protection (BFP), and
Bureau of Jail Management and Penology (BJMP);
b) Barangay and Sanggunian officials who are not receiving fixed monthly
pay;
c) Contractual employees who are not receiving fixed monthly pay; and
d) Employees who do not have monthly regular hours of work and are not
receiving fixed monthly pay.

Classes of GSIS Membership:

GSIS membership is classified as follows:

a) Regular or Special
- Regular Members are those employed by the government:
 1. national or local, legislative bodies, government-owned
and controlled corporations (GOCC) with original
charters, government financial institutions (GFIs),
2. EXCEPT: uniformed personnel of the AFP, PNP, BJMP,
and BFP, who are required by law to remit regular
monthly contributions to the GSIS;

- Special Members are those who are part of:

1. the constitutional commissioners, members of the
judiciary
2. including those with equivalent ranks, who are required
by law to remit regular monthly contributions for life
insurance policies and to answer their life insurance
benefits;

b) Active or Inactive
- 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 monthly contributions.
- Inactive member pertains to a member who is separated either
by:
1. resignation, retirement, disability, dismissal from the
service, retrenchment or, who is deemed retired from the
service under this Act.

Date of effectivity :

GSIS membership takes effect of the date of assumption to office by virtue of

the original appointment or election.

Conditions for entitlement :

A member who retires from the service shall be entitled to the retirement
benefits provided, that:

1. he has rendered at least fifteen (15) years of service;

2. he is at least sixty (60) years of age at the time of retirement;
and
3. he is not receiving a monthly pension benefit from permanent
total disability.
 GSIS EMPLOYEE BENEFITS

Members of the GSIS are entitled to the following benefits:

(a) Separation Benefits;
(b) Unemployment or involuntary separation benefits;
(c) Permanent total disability benefits;
(d) Permanent partial disability benefits;
(e) Temporary total disability benefits;
(f) Retirement benefits;
(g) Survivorship benefits;
(h) Funeral benefits;
(i) Life insurance benefits.

Basic Monthly Pension

The basic monthly pension is equal to:

1) Thirty-seven and one-half percent (37.5%) of the revalued average monthly
compensation; plus
2) Two and one-half percent (2.5%) of said revalued average monthly
compensation for each year of service in excess of fifteen (15) years: Provided the
basic monthly pension shall not exceed ninety percent (90%) of the average monthly
compensation. (Sec. 9 [A], RA 8291).

Separation Benefits

(a) For members who resign or are separated from the service after rendering
service for at least three (3) years but less than fifteen (15) years:
Cash payment equivalent to 100% of the average monthly compensation for
each year of service he paid contributions, but not less than P12,000.00, payable
upon reaching the age of sixty (60) years or upon separation, whichever comes
later.(Sec. 11[a])

(b) For members who resign or are separated from the service after rendering at
least fifteen (15) years of service and is below 60 years old at the time of
resignation or separation. (Sec 11[b])
Cash payment equivalent to eighteen (18) times his basic monthly pension
payable at the time of resignation or separation, plus an old-age pension benefit
equal to the basic monthly pension payable monthly for life upon reaching the
age of 60 years.

Unemployment Or Involuntary Separation Benefits

Unemployment benefits in the form of monthly cash payments equivalent to

fifty percent (50%) of the average monthly compensation shall be paid to a
permanent employee who is involuntarily separated from the service due to the
abolition of his office or position usually resulting from reorganization: Provided,
That he has been paying unregistered contributions for at least one (1) year prior
to separation.
 The unemployment benefit is in the form of monthly cash payments equivalent to
50% of the average monthly compensation payable for the following duration:
(a) 2 months - if contributions have been made for 1 year but less than 3
years;
(b) 3 months - if contributions have been made for 3 years but less than 6
years;
(c) 4 months - if contributions have been made for 6 years but less than 9
years;
(d) 5 months - if contributions have been made for 9 years but less than 11
years;
(e) 6 months - if contributions have been made for 11 years but less than 15
years.

The first payment must be equivalent to two (2) monthly benefits. A seven (7)-
day waiting period shall be imposed on succeeding monthly payments.

All accumulated unemployment benefits paid to the employee during his entire
membership with the GSIS shall be deducted from voluntary separation benefits.

The GSIS shall prescribe the detailed guidelines in the organization of this
section in the rules and regulations implementing this Act. (Sec. 12)

Permanent Disability Benefits

Conditions for entitlement - A member who suffers permanent disability for

reasons not due to his grave misconduct, notorious negligence, habitual intoxication,
or willful intention to kill himself or another, shall be entitled to the benefits provided
for under Sections 16 and 17 of this Act. (Sec. 15, RA 8291)

Permanent Total Disability Benefits

Permanent total disability means disability caused by injury or disease resulting in

complete, irreversible and permanent incapacity to work or to engage in any gainful
occupation.

The following disabilities shall be deemed total and permanent: (Sec. 17[a], RA
8291)
(a) Complete loss of sight for both eyes;
(b) Loss of two limbs at or above the ankle or wrists;
(c) Permanent complete paralysis of two limbs; and
(d) Brain injury resulting in incurable imbecility or insanity;
(e) Such other cases as may be determined and approved by the GSIS.

The permanent total disability benefits for GSIS members are as follows:

(a) If the permanent total disability was suffered while in the service (Sec. 16[a],
RA 8291)
Lifetime monthly income benefit equal to the basic monthly pension plus
cash equivalent to 18 times his basic monthly pension, provided that a total of at
least 180 monthly contributions has been paid;
 (b) If the permanent total disability was suffered after separation from service
Lifetime monthly income benefit equal to the basic monthly pension effective
from the date of disability, provided that the member has paid:
I. 36 monthly contributions within the five-year period immediately
preceding his disability, or;
II. 180 monthly contributions, prior to his disability

(c) If the member has not paid the required minimum contributions and the
permanent total disability was suffered after separation from service
His separation benefit equivalent to 100% of his average monthly
compensation for each year of service (but not less than P12,000.00) shall be
paid in advance, provided that he has rendered at least three (3) years of service
at the time of his permanent total disability. (Sec. 16[b], RA 8291)

(d) Unless the member has reached the minimum retirement age, disability
benefit shall be suspended when:
(1) he is reemployed; or
(2) he recovers from his disability as determined by the GSIS, whose
decision shall be final and binding; or
(3) he fails to present himself for medical examination when required by the
GSIS (Sec. 16[c], RA 8291).

NOTE: A member cannot simultaneously enjoy the monthly income benefit for
permanent disability and the old-age retirement. A member is not entitled to the
benefit if the permanent total disability was caused by his grave misconduct,
notorious negligence, habitual intoxication, or willful intention to kill himself or
another.

Permanent Partial Disability Benefits

(a) If the disability is partial, he shall receive a cash payment in accordance with a
schedule of disabilities to be prescribed by the GSIS: Provided, That he
satisfies either conditions (1) or (2) of Sec. 16(a) (Sec. 17[a], RA 8291).
(b) The disability is permanent and partial when the GSIS member is
incapacitated to work for a limited period of time because of complete and
permanent loss of any of the following body parts:
(1) Complete and permanent loss of the use of:
(i) Any finger
(ii) Any toe
(iii) One arm
(iv) One hand
(v) One foot
(vi) One leg
(vii) One or both ears
(viii) Hearing of one or both ears
(ix) Sight of both eyes
(2) Such other cases as may be determined by the GSIS (Sec. 17[b],
RA 8291)
 A GSIS member is entitled to permanent partial disability benefit if he was in the
service at the time of the disability. If separated from the service, he has paid at least
36 months contributions within the five-year period immediately preceding his
disability; or has paid a total of at least 180 months contributions prior to the
disability.

Temporary Total Disability Benefits

The disability is temporary and total when the GSIS member is momentarily
incapacitated to work or engage in any gainful occupation as a result of impairment
of physical or mental faculties which can be rehabilitated or restored to their normal
functions.

The temporary total disability benefit of GSIS members is:

75% of the current daily compensation foe each day of disability for a period not
exceeding 120 days in one calendar year.

If the disability requires more extensive treatment beyond 120 days, the payment
of the temporary total disability benefit may be extended by the GSIS for a period not
exceeding 240 days.

A GSIS member is entitled to temporary total disability benefit under the

following conditions:
(a) The GSIS member must be in the service at the time of his disability or, if
separated, he has:
I. Rendered at least three (3) years of service; and
II. Paid at least six (6) monthly contributions in the 12-month period
immediately preceding his disability
(b) The GSIS member must have exhausted all his sick leave credits.

“Provided, however, That a member cannot enjoy the temporary total disability
benefit and sick leave pay simultaneously: Provided, further, That if the disability
requires more extensive treatment that lasts beyond one hundred twenty (120) days,
the payment of the temporary total disability benefit may be extended by the GSIS
but not to exceed a total of two hundred forty (240) days. (Sec. 18[a], RA 8291)

(a) The temporary total disability benefit shall in no case be less than seventy
pesos (P70.00) a day (Sec. 18[b], RA 8291)
(b) The notices required of the member and the employer, the mode of payment,
and the other requirements for entitlement to temporary total disability benefits
shall be provided in the rules and regulations to be prescribed by the GSIS
(Sec. 18[c], RA 8291).

A member is not entitled to the benefit if the permanent partial disability was caused
by his grave misconduct, notorious negligence, habitual intoxication, or willful
intention to kill himself or another.

Retirement Benefits
 The GSIS offers four (4) retirement benefits depending on the qualifications of
the members as provided by the following laws:

RA 8291 - At least sixty (60) years old, has rendered a minimum of fifteen (15)
years in the government service and not a permanent total disability pensioner:
(a) Retirement benefits shall be:
1. The lump sum payment as defined in this Act at the time of retirement plus
an old-age pension benefit equal to the basic monthly pension payable
monthly for life, starting upon expiration of the five (5) year guaranteed
period covered by the lump sum; or
2. Cash payment equivalent to eighteen (18) months of his basic monthly
pension plus monthly pension for life payable immediately with no five (5)
year guarantee. (Sec. 13[a], RA 8291)
3. Unless the Service is extended by appropriate authorities, retirement shall
be compulsory for an employee at sixty-five (65) years of age with at least
fifteen (15) years of service, he may be allowed to continue in the service in
accordance with existing civil service rules and regulations. (Sec. 13[a], RA
8291)

PD 1146 - if in service after May 31, 1997 but before June 24, 1997
This retirement scheme shall be entitled to an employee with the following
benefits depending on the years of service:
1. Basic monthly pension. If an employee is at least sixty (60) years old and
has rendered fifteen (15) years of service. The Basic monthly pension is
guaranteed for five seventeen (17) years. After the five-seventeen year
guarantee period, the employee will receive the sum of the basic monthly
pension for life. The employee may request for the payment in lump sum of the
basic monthly pension for the guaranteed period of five years at a discounted
rate not less than 6%.
2. If an employee is at least sixty (60) years old and has rendered at least
three (3) years but less than fifteen (15) years of service, would be entitled to a
cash payment equivalent to 100% of the average monthly compensation for
every year of service.

RA No. 660 - Magic 87

This kind of retirement scheme is given to an employee whose sum of age
and years of service is eighty-seven (87) and at least fifty-two (52) years old or
that they have been in the service for thirty-five (35) years.

The employee must have entered the service on or before May 31, 1977. His
last three years of service prior to retirement should have been continuous,
except in cases of death, disability, abolition, and phase-out of position due to
reorganization. His appointment status must be permanent; and that he must
meet the age and service requirements under the Magic 87 formula.

The maximum monthly pension for those 57 years old shall be 80% of the
Average Monthly Salary received during the last three years immediately
preceding retirement. The maximum pension for those aged 57 and below shall
be 75% of their Average Monthly Salary.
Survivorship Benefits
When a member or pensioner dies, the beneficiaries shall be entitled to survivorship
benefits provided in Secs. 21 and 22 hereunder subject to the conditions therein
provided for. The survivorship pension shall consist of:
(1) The basic survivorship pension which is fifty percent (50%) of the monthly
pension; and
(2) The dependent children’s pension not exceeding fifty percent (50%) of the
basic monthly pension .

If the GSIS member dies, the primary beneficiaries are entitled to the following
survivorship benefits, whichever is applicable:
(a) Survivorship pension, under the following conditions:
I. The deceased was in the service at the time of his death; or
II. If separated from the service;
l Has at least three (3) years of service at the time of his death and
has paid thirty-six (36)monthly contributions within the five-year
period immediately preceding his death; or
l Has paid a total of at least one hundred eighty (180) monthly
contributions prior to his death;

(b) Survivorship pension plus a cash payment equivalent to one hundred percent
(100%) of average monthly compensation for every year of service, under the
following conditions:
I. The deceased was in the service at the time of his death; and
II. Must have rendered at least three (3) years of service.

(c) Cash payment equivalent to one hundred percent (100%) of his average
monthly compensation for each year of service he paid contributions, but less than
Twelve thousand pesos (P12,000.00), under the following conditions:(Sec. 21[a], RA
8291)
I. The deceased has rendered at least three (3) years of service prior to his
death;
II. But does not qualify for survivorship pension mentioned above.

The survivorship pension shall be paid to:

(a) The dependent spouse - if she is the only survivor, to be enjoyed for life or
until he/she remarries;
(b) The dependent children – if they are the only survivors, to be enjoyed for
as long as they are qualified, plus the dependent children’s pension;
(c) The dependent spouse and the dependent children, if they are survivors –
the dependent spouses shall receive the basic survivorship pension for life
or until he/she remarries, while the dependent children shall receive the
dependent children’s pension equivalent to 10% of the basic monthly
pension for every dependent child not exceeding five (5) years of age,
counted from the youngest and without substitution.(Sec. 21[b], RA 8291)

If there are no primary beneficiaries, the survivorship benefits shall be paid to the
secondary beneficiaries in the following amount: (Sec. 21[c], RA 8291)
 (a) Cash payment equivalent to 100% of the average monthly compensation
for each year of service he paid contributions, but less than Twelve
thousand pesos (P12,000.00), if the GSIS member:
(i) Was in the service at the time of his death; and
(ii) Has at least three (3) years of service.

For purposes of the survivorship benefits, legitimate children shall include legally
adopted and legitimated children (Sec. 21[d], RA 8291)

In the absence of secondary beneficiaries, the benefits shall be paid to his legal
heirs.

Death of a Pensioner

(a) If the deceased member opted for 5-year lump sum benefit, his legal heirs
shall be entitled to 5-year lump sum benefit equivalent to 60 months basic monthly
pension. But the survivorship pension shall be granted only after the end of the 5-
year guaranteed period;
(b) If the deceased member opted for immediate pension, his legal heirs shall be
entitled to the cash payment benefit equivalent to 18 months of basic monthly
pension, plus accrued pension up to the date of death of the retiree;
(c) If the deceased member failed to indicate any retirement option, the
retirement benefit shall be computed as if he opted for immediate pension.(Sec. 22,
RA 8291).

Suspension Of Disability Benefits

Unless the member has reached the minimum retirement age, disability benefits
shall be suspended when he:
(a) Is reemployed; or
(b) Recovers from the disability as determined by the GSIS; or
(c) Fails to present himself for medical examination when required by the GSIS.

Forfeiture Of Disability Benefits

The disability benefits will be automatically forfeited if the GSIS member refuses
or fails:
(a) To have himself medically treated by a physician when required by the
GSIS;
(b) To take the prescribed medications;
(c) To have himself confined in a hospital, when such confinement is
required by the GSIS; or
(d) To avail himself of rehabilitation facilities as may be duly recommended
by the GSIS; or
(e) To observe such precautionary or preventive measures as prescribed by
a physician to prevent the aggravation or continuance of his disability.
Funeral Benefits

The amount of the funeral benefits shall be determined and specified by the GSIS in
the rules and regulations but shall not be less then Twelve thousand pesos
(P12,000.00): Provided, That it shall be increased to at least Eighteen thousand
pesos (P18,000.00) after five (5) years and shall be paid upon the death of:

(a) An active member as defined under Sec. 2(e) of this Act; or

(b) A member who has been separated from the service, but who may be
entitled to future benefit pursuant to Sec. 4 of this Act; or
(c) A pensioner, as defined in Sec. 2(o) of this Act; or
(d) A retiree who at the time of his retirement was of pensionable age under
this Act but who opted to retire under RA 1616 (Sec. 23, RA 8291).

It is payable to any qualified individual, in accordance with the following order of

priority:
(a) Legitimate spouse;
(b) Legitimate child who spent for the funeral services; or
(c) Any other person who can show incontrovertible proof that he shouldered
the funeral expenses of the deceased.

The funeral benefit is:

(a) The prevailing amount approved by the Board of Trustees at the time of
death of the member or pensioner;
(b) P10,000.00 – For uniformed members of the Philippine National Police,
Bureau of Jail Management and Penology, and Bureau of Fire Protection.

Compulsory Life Insurance

The GSIS life insurance benefit is compulsory and available to all employees, except
for Members of the Armed Forces of the Philippines and the Philippine National
Police under the following conditions:.
(1) For those employed after the effectivity of this Act, their insurance shall
take effect on the date of their employment;
(2) For those whose insurance will mature after the effectivity of this Act, their
insurance shall be deemed renewed on the day following the maturity or
expiry date of their insurance;
For those without any life insurance as of the effectivity of this Act, their insurance
shall take effect following said effectivity (Sec. 24, RA 8291).

Prescriptive Period For Filing Claims

Claims for GSIS benefits except for life insurance and retirement must be filed
within four (4) years from the date of contingency. Claims filed after four (4) years will
be barred by prescription.
CASE: G.R. No. 217949

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), Petitioner

vs.
REYNALDO P. PALMIERY, Respondent

FACTS: Respondent Reynaldo was a government employee starting May 2, 1961 in

the Phil. Veterans Administration. He served in the DBP, which he retired as
manager. The DBP then paid his gratuity under RA 1616. Reynaldo received the
refund of his contributions. In total, he received Php 250,014.31.

On January 2, 1987, Reynaldo worked again in the government and was appointed
as Manager III in the SSS and worked there until he retired as Deputy Administrator
on June 1, 1994. He then claimed his retirement benefits under RA 660, where he
was given a five-year lump sum pension. It was still subject to deductions of the
amount of benefits he received before and his outstanding payables (i.e. Php
57,774.64). He received the aggregate amount of Php 224,836.73 on July 4, 1994.

He was then appointed as member of the GSIS Board of Trustees on July 7, 1998
where he concurrently served as GSIS Exec. VP. He refunded to GSIS the amount
of Php 895,320.78, or the benefits he received from his retirement and requested
that his monthly pension be suspended, which became effective on July 1, 1999, or
five (5) years after the payment of his lump sum pension. The total amounted to Php
920,566.72. The GSIS thus received this amount and gave him receipts.

Reynaldo compulsorily retired on May 28, 2005 and requested that he be credited for
his full service of 38 years, starting from July 1, 1961, to which he applied for his
benefits under RA 8291.

The GSIS rejected Reynaldo’s claim for retirement benefits under RA 8291, for not
meeting the required years of service. GSIS would only credit Reynaldo's service
after his re-entry to the government in 1998. Reynaldo was likewise informed that the
amount previously refunded to the GSIS would be returned to him without interest.

When the GSIS did not respond, Reynaldo filed a petition to the GSIS Committee on
Claims, but was rejected. He then filed a petition with the GSIS Corp. Sec., which
was then forwarded to the GSIS Chief Legal Counsel.

The GSIS Board of Trustees thus acted on his petition, but it was dismissed for lack
of merit. They were to refund him the amount of Php920,566.72, which he returned
to the GSIS. Under the Policy and Procedural Guidelines (PPG), government
employees who re-entered on or after the effectivity of R.A. No. 8291, or on June 24,
1997, cannot claim their previous years of service upon retirement. Since Reynaldo
re-entered government service after June 24, 1997, the GSIS Board of Trustees
excluded the years of service prior to his re-entry in the computation of his service
under R.A. No. 8291.

The decision was appealed to the CA and the CA granted Reynaldo’s petition.
Respondent GSIS is DIRECTED to process the total retirement benefits accruing in
favor of [Reynaldo], based on his total length of government service.
Under Section 12(g) of Commonwealth Act (C.A.) No. 186,a reinstated government
employee may receive full credit for the years of service, provided that the retirement
and pension benefits previously received are refunded to the GSIS.

ISSUE: Whether Reynaldo’s previous years in government should be included in the

computation for his retirement benefits.

RULING: YES. Reynaldo’s previous years in government service should be included

in the computation for his retirement benefits.

Under RA 8291 or the GSIS Act of 1997 , all government employees who have not
reached the mandatory retirement age are compulsorily required to become
members of the GSIS and this membership entitles employees, except those in the
judiciary and constitutional commissions, to life insurance, retirement and other
benefits.

For retirement benefits, RA 8291 provides the following conditions before a member
may become qualified to receive this benefit:

(a) the employee must have rendered at least 15 years of service;

(b) the employee must be at least 60 years old at the time of retirement; and

(c) the employee must not be receiving a monthly pension as a result of permanent
total disability.

It further provides for the manner by which service is computed:

SECTION 10. Computation of Service. — (a) The computation of service for the
purpose of determining the amount of benefits payable under this Act shall be from
the date of original appointment/election, including periods of service at
different times under one or more employers, those performed overseas under
the authority of the Republic of the Philippines, and those that may be prescribed by
the GSIS in coordination with the Civil Service Commission.

(b) All service credited for retirement, resignation or separation for which
corresponding benefits have been awarded under this Act or other laws shall
be excluded in the computation of service in case of reinstatement in the
service of an employer and subsequent retirement or separation which is
compensable under this Act.

For the purpose of this section the term service shall include full time service with
compensation: Provided, That part time and other services with compensation may
be included under such rules and regulations as may be prescribed by the GSIS.

In line with this provision, even though RA 8291 does not expressly provide for giving
full credit to prior years of service upon the refund of benefits previously received
unlike Section 12 (g) of CA 186, it does not mean that RA 8291 has abandoned this
policy.
Section 12(g) of C.A. No. 186 specifically makes reference to Section 12(f), which
disqualifies separated employees receiving the annuity under Section 11 of C.A. No.
186, from being appointed to another appointive position, unless he or she
possesses special qualifications. During the period of new employment, the annuity
payment is suspended. Payment of the annuity resumes only after the termination of
the employment.

Thus, taken in its proper context, Section 12(g) of C.A. No. 186 applies to a specific
category of employees and their corresponding benefits. The provision's subsequent
absence in R.A. No. 8291 is attributable to the revised conditions for retirement
under the new law, which was streamlined to only three (3) requirements for
eligibility. The Court cannot interpret its absence in R.A. No. 8291 as an express
prohibition against refunding previously received benefits for purposes of claiming
retirement benefits under the law. The GSIS, therefore, erroneously relied on the
absence of this provision to deny the claim of Reynaldo.

More importantly, a plain reading of Section 10(b) of R.A. No. 8291 reveals that
employees who already received the retirement benefits under R.A. No. 8291, or the
other laws, cannot credit their years of service prior to their re-entry in the
government. Conversely, this means that employees who have not received
their retirement benefits are entitled to full credit of their service.

In this regard, those similarly situated, or those who refunded their retirement
benefits to the GSIS after they re-entered government service should be allowed to
include their prior years of service in the computation of their eligibility and retirement
benefits. This is consistent with the legal precept against double compensation,
which prohibits payment for the same services covering the same period. Thus, if the
employee has not received his/her retirement benefits, or has returned them to the
GSIS, as the case may be, then the prohibition against double retirement benefits
cannot apply.

For this reason, giving full credit to Reynaldo's years of service in the government
does not contravene any existing statute or policy, especially since it is undisputed
that Reynaldo refunded his previously received benefits to the GSIS. The GSIS even
suspended his monthly pension effective October 1, 2001, pursuant to the request of
Reynaldo. His re-entry into government service after the effectivity of R.A. No. 8291
is, therefore, inconsequential to the present case. The distinction that the GSIS
created between individuals who re-entered government service before the effectivity
of R.A. No. 8291, and those who re-entered after its effectivity, cannot supersede the
unambiguous policy in Section 10(b) of the new GSIS Law.

When Reynaldo refunded his benefits, the GSIS subscribed to the policy that the
prior services of an employee reinstated in the government may be credited as long
as a refund of the previously received retirement benefits is made.

Notably, the GSIS did not dispute Reynaldo's refund. The GSIS accepted the
amount and even issued a receipt in his favor. Reynaldo's request to suspend the
payment of his monthly pension was also granted, as a result of which, the monthly
pension under R.A. No. 660 was suspended effective October 1, 2001. Pending the
suspension of his monthly pension, Reynaldo made succeeding refunds of the
amounts he received from the GSIS. His total refund thus amounted to Php
920,566.72.

In accepting the refund of Reynaldo, the GSIS cannot subsequently apply PPG No.
183-06, which adopts a new policy prejudicial to the retiree. The GSIS is the primaiy
agency tasked with administering the government's retirement system. Reynaldo,
thus, correctly assumed that when the GSIS accepted the refund of his retirement
benefits, the agency would grant full credit to his years of service in the government.

Granting full credit to Reynaldo's years of service is neither unjust enrichment nor
violative of the principle against double compensation. There is no express
prohibition under R.A. No. 8291 against crediting the years of service upon the
refund of previously received retirement benefits. In this case, Reynaldo refunded his
retirement pay and monthly pension; and, from the time his monthly pension was
suspended, Reynaldo no longer received the benefits due him. Denying his claim is,
therefore, tantamount to depriving Reynaldo of his compensation for the years of
service he rendered to the government, despite being eligible under the law.

Ultimately, in our jurisdiction, the inflexible rule is that social legislation must be
liberally construed in favor of the beneficiaries.