AN ACT PROVIDING BENEFITS FOR EARLY RETIREMENT AND VOLUNTARY SEPARATION FROM THE GOVERNMENT SERVICE

Case Overview and Summary

Declaration of Policy
Section 1: The State shall promote economy, efficiency and effectiveness in government operations, particularly in the delivery of essential public services, by streamlining government functions and maintaining necessary positions through an appropriate retirement and voluntary separation scheme.

Coverage
• Section 2: The Act covers all appointive officials and employees of the National Government, government-owned or controlled corporations with original charters, and personnel of all local government units.
• It applies to regular, temporary, casual and emergency employees who have rendered at least two consecutive years of government service as of the date of separation.
• Uniformed personnel of the Armed Forces of the Philippines, including the PC-INP, are excluded.

Early Retirement and Voluntary Separation Benefits
• Section 3: Eligible officials and employees who voluntarily retire or separate shall receive benefits equivalent to one and one-fourth (1 1/4) month's basic salary for every year of government service, based on the highest salary received.
• The minimum benefit shall be Ten thousand pesos (P10,000).
• Those previously found guilty in an administrative proceeding and had their rank or salary reduced shall be paid based on their last salary.

Additional Benefits
• Section 4: Eligible officials and employees shall be entitled to:
- Return of GSIS personal contributions pertaining to retirement, with interest.
- Commutation of unused vacation and sick leaves.
- Those with 31 years or more of service shall receive an additional 10% of the amount corresponding to the 31st year onward.

Exclusiveness of Benefits
• Section 5: Those who retire or separate under this Act shall not be eligible for optional retirement with gratuity under Republic Act Nos. 1616 and 4968, or with pension under Commonwealth Act No. 186 (as amended), or under Presidential Decree No. 1146 (as amended).

Abolition of Positions
• Section 6: Positions vacated through early retirement or separation shall be abolished, unless the head of the office or agency certifies within 60 days that the position needs to be retained, with approval from the President (Executive Department), Chief Justice (Judiciary), Senate President or Speaker of the House (Congress), or Chairman (Constitutional Commissions).

Discretion of Agency Heads
• Section 7: No official or employee shall be separated or retired unless their application is accepted by the head of the government office or agency, or the chief executive officer of the government-owned or controlled corporation.
• Applications shall be accepted unless the applicant's services are deemed necessary.
• Applications with pending administrative cases punishable by dismissal or removal shall be held in abeyance until final disposition.
• Applications with criminal cases of grave nature committed in relation to their office shall be held in abeyance.

Restriction on Employment and Replacement
• Section 8: Those retired or separated under this Act shall not be eligible for appointment or employment in any government branch, agency, or government-owned or controlled corporation for 5 years after separation, unless they refund the benefits received.
• Reemployed personnel shall be treated as new entrants for GSIS coverage.
• Retained positions shall be filled by deserving employees from the same or other agencies.

Period of Applicability and Effectivity
• Section 9: Applications for early retirement and voluntary separation benefits shall be entertained only if filed within 2 months from the issuance of implementing rules and regulations.
• The oldest and most senior employees shall be given priority in payment of benefits.

Funding
• Section 10: For national government employees, Three billion pesos is authorized to be appropriated from the National Treasury for payment of benefits.
• For government-owned or controlled corporations, benefits shall be paid from internal funds, but not less than existing corporate programs.
• For local government units, benefits shall be paid from available funds.
• Government-owned or controlled corporations and local government units may avail of up to 25% of the Three billion peso fund, subject to conditions.
• Savings from abolished positions shall be earmarked and used exclusively for payment of benefits.

Retroactive Charges
• Section 11: Officials and employees previously separated due to reorganization after the 1987 Constitution shall be deemed covered and entitled to benefits under this Act.

Penalties
• Section 12: Any official who compels an employee to retire or separate under this Act, or otherwise violates its provisions, shall be punished by a fine not exceeding One thousand pesos (P1,000), or imprisonment not exceeding 6 months, or both.

Implementing Rules and Regulations
• Section 13: The Department of Budget and Management, in consultation with the Civil Service Commission, shall issue implementing rules and regulations within 15 days from the effectivity of this Act.
• Only the following documents are required from applicants:
- Approved application under oath for early retirement or voluntary separation, including statement of years of service and highest salary rate.
- Money and property clearance from the agency.
- Simplified statement of assets, liabilities, net worth, and financial and business interests (for regular employees).
• Processing and payment of benefits shall be completed within 15 days from submission of documents.

Compliance and Reporting
• Section 14: Six months from the effectivity of this Act, the Department of Budget and Management and the Civil Service Commission shall report to Congress on the number of employees affected, positions involved, total amount spent, and an evaluation.

Repealing Clause
• Section 15: All laws, rules and regulations inconsistent with this Act are repealed or modified accordingly.

Separability Clause
• Section 16: If any part of this Act is held invalid or unconstitutional, the other parts shall not be affected.

Effectivity
• Section 17: This Act shall take effect upon publication in two newspapers of general circulation.