G.R. No. 210328 . January 30, 2017.
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), Petitioner, vs. APOLINARIO C. PAUIG, Respondent.

FACTS

Respondent Apolinario C. Pauig, Municipal Agriculturist of San Pablo, Isabela, entered government service on February 12, 1964, as an emergency laborer on casual status. He later became a temporary employee from July 5, 1972, to July 18, 1977, and was appointed as a permanent employee only on July 19, 1977. He became a GSIS member on August 1, 1977. Upon his mandatory retirement on November 3, 2004, GSIS processed his claim based on a Record of Creditable Service covering only 27 years, excluding his first 14 years of casual and temporary service.
GSIS justified the exclusion under its Premium-Based Policy, effective August 1, 2003, which requires that only periods where premium payments were actually remitted to the System shall be credited for retirement benefits. Since no premiums were paid or remitted during Pauig’s initial 14 years, GSIS excluded this period. Pauig contested this before the Regional Trial Court (RTC) of Cabagan, Isabela.

ISSUE

Whether the GSIS should include Pauig’s first fourteen (14) years of casual and temporary government service in the computation of his retirement benefits.

RULING

The Supreme Court ruled in the negative, reversing the RTC. The Court held that the applicable laws governing compulsory GSIS membership during the contested period (February 12, 1964, to July 18, 1977) explicitly limited membership to “permanent” employees. Commonwealth Act No. 186 , as amended, provided that compulsory membership applied to “regularly and permanently appointed employees.” This was reiterated in subsequent amendments, including Republic Act No. 4968 (1967), which stated membership was for “all permanent officials and employees.” Presidential Decree No. 1146 (1977), which took effect after Pauig’s permanent appointment, continued this requirement.
Since Pauig was a casual and temporary employee during the excluded 14-year period, he was not compulsorily covered by the GSIS, and no legal obligation existed for the remittance of premium contributions for him at that time. The Court emphasized that while retirement laws are generally construed liberally in favor of the retiree, this doctrine cannot be applied to contravene the clear and unequivocal language of the law. The Premium-Based Policy, which credits only service periods with paid premiums, is consistent with these statutory requirements. To grant creditable service for periods where no premium payments were mandated or remitted would violate the law and the very design of the contributory pension system. Thus, Pauig’s casual and temporary service was correctly excluded from the computation of his retirement benefits.