G.R. No. 116422 November 4, 1996
AVELINA B. CONTE and LETICIA BOISER-PALMA, petitioners, vs. COMMISSION ON AUDIT (COA), respondent.

FACTS

Petitioners Avelina B. Conte and Leticia Boiser-Palma were former employees of the Social Security System (SSS) who retired under Republic Act No. 660 . In addition to their statutory retirement benefits, they claimed “financial assistance” under SSS Resolution No. 56, series of 1971. This resolution encouraged employees to choose the life annuity under R.A. 660 over the lump-sum gratuity under R.A. 1616 by granting them financial assistance equivalent to the difference between the benefits under the two laws.
The Commission on Audit (COA) disallowed these claims. COA ruled that the scheme under Resolution No. 56 effectively constituted a supplementary retirement plan, which is proscribed by Republic Act No. 4968 . This law, amending the GSIS Charter, declared all supplementary retirement plans in government instrumentalities inoperative. The SSS Administrator sought presidential authority to continue the scheme, but the Office of the President declined, upholding COA’s position. Petitioners then filed this certiorari petition seeking to reverse COA’s decision.

ISSUE

Whether SSS Resolution No. 56, which grants financial assistance to retiring employees, constitutes a prohibited supplementary retirement plan under R.A. No. 4968 .

RULING

The Supreme Court DISMISSED the petition and AFFIRMED the COA decision. The Court held that SSS Resolution No. 56 created an illegal supplementary retirement plan. The legal logic is grounded on the clear prohibition in R.A. No. 4968 , which abolished all supplementary pension or retirement plans in any government office or corporation. The Court examined the substantive effect of Resolution No. 56, not merely its label as “financial assistance.” The resolution systematically provided a benefit calculated precisely on the difference between two existing retirement laws, ensuring retirees received a total package mirroring the more favorable option. This scheme operated as a formal, additional benefit layer tied directly to retirement, making it a supplementary plan by operation and design. The law expressly aims to prevent the proliferation of such separate plans to ensure uniformity and fiscal control. Since the resolution was promulgated after R.A. No. 4968 ’s effectivity, it was void from inception. However, in equity, the Court urged the SSS to assist petitioners in promptly processing their applications under R.A. No. 1616 , the alternative benefit they were originally qualified to receive.