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Palace spells out retirement benefits for state workers affected by rationalization plan

October 05, 2004

MANILA (PNA) - Government personnel who opt to retire or be separated from the service can avail of either the retirement gratuity provided under Republic Act 1616 or the retirement benefit under Republic Act 660.

This was contained in Executive Order No. 366 signed today by President Gloria Macapagal-Arroyo ordering a strategic review of the operations and organizations of the Executive Branch to improve public service delivery.

The EO provided for options and incentives for government employees who may be affected by the rationalization of the functions and agencies of the Executive Branch.

The Department of Budget and Management (DBM), together with the Civil Service Commission (CSC), will coordinate in implementing the rationalization program.

The retirement gratuity provided under RA 1616 prescribes two other modes of retirement and other purposes payable by the last employer of the affected personnel plus the refund of retirement premiums payable by the Government Service Insurance System (GSIS).

The retirement benefit under RA 660 provides applicable retirement insurance, separation or unemployment benefit plus the following applicable incentives:

month of the present basic salary for every year of government service and a fraction thereof for those who have rendered 20 years of service or below;

month of the present basic salary for every year of government service and a fraction thereof, computed starting from the first year for those who have rendered 21-30 years of service; and

1 month of the present basic salary for every year of government service and a fraction thereof, computed from the first year, for those who have rendered 31 years of service and above.

Those with less than three years of government service may opt to avail of the separation gratuity under RA 6656 (An Act to Protect the Security of Tenure of Civil Service Officers and employees in the Implementation of Government Reorganization).

No affected employee who opted for retirement/separation shall receive less than an aggregate of P50, 000 as his retirement/gratuity benefit from the national government and the GSIS.

In the case of employees belonging to agencies and government-owned and controlled corporations (GOCCs) exempted from or not following the Salary Standardization law, the total amount of incentives to be received shall not exceed P1,500,000.

Except for newly created agencies, the hiring of additional personnel and the renewal of contracts/appointments of all employees hired on contractual, casual or temporary basis is prohibited during the preparation of the Rationalization Plan.

Personnel who may be affected by the rationalization have the option to remain in government service if they have permanent appointment attested to by the CSC. Those with temporary appointments attested by the CSC may opt to remain but are guaranteed tenure up to the expiration of their appointment only.

The rest may avail of the retirement/separation benefits as provided by the EO.

Personnel who opt to remain in government service shall be placed in other agencies by the CSC where additional personnel are required. However, the position of the transferred personnel in the recipient agency shall be co-terminus with the incumbent.

Such affected personnel shall not suffer any diminution in pay, except for certain allowances that used to be given corresponding to the performance of specific functions which would no longer form part of their new functions.

Personnel who would choose to remain in government service but would later object to his/her new assignment shall be deemed separated/retired and shall be paid retirement/separation or unemployment benefit whichever is applicable under existing retirement/separation laws, without the incentives provided therein.


The Executive Order covers all departments of the Executive Branch and their component units. bureaus, including all corporations, boards, task forces, councils, commission and all other agencies attached to or under the administrative supervision of a department.


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