The Supreme Court ruled that the Government Service Insurance System (GSIS) must publish its policies that substantially affect the rights of its members. Specifically, GSIS Resolutions 238, 90, and 179—concerning the Claims and Loans Interdependency Policy (CLIP), Premium-Based Policy (PBP), and Automatic Policy Loan and Policy Lapse (APL)—were invalidated because they were not published in the Official Gazette or a newspaper of general circulation. This decision protects GSIS members from the retroactive application of policies that could reduce their benefits without proper notice and opportunity to be heard, ensuring transparency and due process in the administration of government service insurance.

Can GSIS Change the Rules Without Telling Anyone? Teachers Challenge Retroactive Policy Changes

The Manila Public School Teachers’ Association and others challenged the GSIS’s implementation of the CLIP, PBP, and APL, arguing that these policies were applied retroactively and without proper notice, thereby reducing their retirement benefits. These policies altered how GSIS benefits were calculated and administered. The teachers claimed that these resolutions were intrinsically unconstitutional, illegal, unjust, and oppressive.

At the heart of the controversy was whether the GSIS could enforce these resolutions without publishing them, as required by law. The petitioners argued that these policies substantially altered the terms of their GSIS coverage, impacting their vested rights to retirement benefits. On the other hand, GSIS contended that the policies were merely reiterations of existing insurance principles and did not require publication.

The Supreme Court emphasized the importance of publication for administrative rules and regulations, particularly those that affect the rights and benefits of individuals. Citing Tañada v. Tuvera, the Court reiterated that administrative rules must be published if their purpose is to enforce or implement existing law pursuant to a valid delegation. The Court noted that the resolutions substantially increased the burden on GSIS members by making the crediting of service and loan repayments contingent on proper posting by GSIS, a process outside the members’ control.

The Court scrutinized the specific resolutions. Resolution No. 238 introduced CLIP, which allowed GSIS to deduct arrears from a member’s new loans or retirement benefits and suspend loan privileges. Resolution No. 90 adopted the PBP, under which the creditable service of a member is determined by the monthly premium contributions that were timely and correctly remitted to GSIS. Petitioners claimed this policy shifted the basis for GSIS benefits from the actual length of service to the creditable years of service.

Furthermore, Resolution No. 179 approved the APL, which keeps a GSIS life insurance policy in force by taking out a loan against the policy’s accumulated cash value in case of nonpayment of premiums. APL imposed a 6% annual interest compounded monthly and was independent of the 2% monthly interest charged to the agency for delayed remittances.

The Supreme Court found that these resolutions went beyond mere interpretation of R.A. 8291. The Court considered the cumulative impact of the policies and the fact that GSIS did not consider certifications issued by DepEd as sufficient proof of payment. GSIS’s stance imposed an additional burden on the employees to ensure that their agency included the government share in the budget, deducted the employee share, and timely remitted all payments, actions beyond their direct control.

In Veterans Federation of the Philippines v. Reyes, the Court stated that interpretative regulations that do not add anything to the law or affect substantial rights of any person do not require publication. However, the Court clarified that when an administrative rule substantially adds to or increases the burden of those governed, the agency must provide notice, hearing, and publication before the new issuance is given the force and effect of law.

The Court highlighted the resolutions’ impact on the employees’ vested property rights to retirement benefits. The resolutions imposed additional obligations on member-employees, making them responsible for their employer-agency’s actions regarding premium remittances and GSIS’s posting of payments. The Supreme Court therefore declared GSIS Resolutions Nos. 238, 90, and 179 invalid and of no force and effect.

FAQs

What was the key issue in this case?	The key issue was whether GSIS Resolutions 238, 90, and 179, concerning CLIP, PBP, and APL, were valid despite not being published in the Official Gazette or a newspaper of general circulation.
What is the Claims and Loans Interdependency Policy (CLIP)?	CLIP allows GSIS to deduct arrears from a member’s new loans or retirement benefits and suspend loan privileges when a loan account is in default.
What is the Premium-Based Policy (PBP)?	PBP calculates a member’s creditable service based on the monthly premium contributions that were timely and correctly remitted to GSIS, potentially reducing benefits based on remittance accuracy.
What is the Automatic Policy Loan and Policy Lapse (APL)?	APL keeps a GSIS life insurance policy in force by taking out a loan against the policy’s accumulated cash value if premiums are not paid, accruing interest on the loan.
Why did the Supreme Court invalidate the GSIS resolutions?	The Court invalidated the resolutions because they were not published, and they substantially increased the burden on GSIS members by affecting their vested rights to retirement benefits.
What is the effect of the Supreme Court’s decision on GSIS members?	The decision protects GSIS members from the retroactive application of unpublished policies that could reduce their benefits, ensuring they receive due process and proper notice.
Did the Supreme Court address the issue of unremitted premiums?	Yes, the Supreme Court forwarded the concerns to Congress and the Ombudsman to address the non-remittance or delayed remittance of premiums and loan repayments.
What is the implication for the Department of Education (DepEd) and other government agencies?	The Supreme Court recognized that DepEd executed a MOA with the DBM for settlement of premium deficiencies pertaining to the government share from 1 July 1997 to 31 December 2010.

This ruling underscores the importance of transparency and due process in the implementation of administrative policies. It reinforces the principle that government agencies must adhere to publication requirements, especially when policies affect the rights and benefits of individuals. The decision serves as a reminder to agencies like GSIS to ensure that their policies are accessible to the public and that members are given an opportunity to be heard before changes are implemented.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: MPSTA vs. Garcia, G.R. No. 192708, October 02, 2017