FACTS:

The petitioner, GSIS, filed a Petition for Review on Certiorari before the Supreme Court seeking to nullify the Decision and Resolution of the Court of Appeals. The respondent, Fernando P. de Leon, retired as Chief State Prosecutor of the DOJ in 1992 and applied for retirement under RA No. 910, invoking RA No. 3783, as amended by RA No. 4140. GSIS stopped the payment of his monthly pension in 2001 after being informed by the DBM that respondent was not qualified to retire under RA No. 910. Respondent filed a petition for mandamus before the Court of Appeals, which granted the petition and ordered GSIS to continue paying his monthly pension and the unpaid benefits from 2001. GSIS appealed the decision before the Supreme Court.

The respondent retired under RA No. 910 but later sought to convert his retirement to one governed by GSIS. However, GSIS refused to allow the conversion, citing RA No. 8291. GSIS argues that the CA erred in issuing a writ of mandamus without specifying the law under which the respondent's retirement benefits should be paid. GSIS also argues that the respondent cannot claim benefits from GSIS anymore because he had refunded his premium payments. The respondent argues that he has a clear legal right to receive retirement benefits under either RA No. 660 or PD No. 1146 and that the return of his contributions does not bar him from pursuing his claims. He requests the court to modify the CA decision to use the provisions of PD No. 1146 or RA No. 660 as the basis for his retirement benefits.

ISSUES:

1. Whether the respondent has a clear legal right to the reinstatement of his retirement benefits.

2. Whether the respondent is entitled to retirement benefits under any other existing retirement law.

3. Whether the retiree is entitled to a monthly pension for life under P.D. No. 1146.

4. Whether retirement benefits are considered part of an employee's compensation and a vested right protected by the due process clause.

5. Whether the retiree can be prejudiced by a new interpretation of the law.

6. Whether the retiree's situation constitutes a conversion of retirement mode under R.A. No. 8291.

7. Whether GSIS can demand the return of the retiree's premium payments.

8. Whether the respondent should be entitled to receive retirement benefits under P.D. No. 1146 or R.A. No. 910.

9. Whether the Government Service Insurance System (GSIS) should be ordered to compute and pay the respondent's retirement benefits.

RULING:

1. The respondent has a clear legal right to the reinstatement of his retirement benefits. Retirement laws are liberally construed in favor of the retiree to achieve their humanitarian purpose, which is to provide for the retiree's sustenance and well-being. In this case, the respondent has established that he is entitled to retirement benefits.

2. The respondent is entitled to retirement benefits under P.D. No. 1146. Prior to the effectivity of R.A. No. 8291, retiring government employees who were not entitled to benefits under R.A. No. 910 had the option to retire under either Commonwealth Act No. 186, as amended by R.A. No. 660, or P.D. No. 1146. Since P.D. No. 1146 provides for higher benefits and it was the latest law at the time of the respondent's retirement, he is entitled to retire under this law as long as he satisfies the requirements.

3. Yes, the retiree is entitled to a monthly pension for life under P.D. No. 1146.

4. Yes, retirement benefits are considered part of an employee's compensation and a vested right protected by the due process clause.

5. No, the retiree cannot be prejudiced by a new interpretation of the law.

6. No, the retiree's situation does not constitute a conversion of retirement mode under R.A. No. 8291.

7. Yes, GSIS can demand the return of the retiree's premium payments.

8. The Supreme Court affirmed with modification the decision of the Court of Appeals. The GSIS was ordered to pay the respondent's retirement benefits in accordance with P.D. No. 1146, subject to deductions, if any, computed from the time the same were withheld until April 7, 2010. The GSIS was also ordered to pay the respondent's retirement benefits in accordance with R.A. No. 910, computed from April 8, 2010 onwards.

PRINCIPLES:

• Social legislation must be liberally construed in favor of the beneficiaries.

• Retirement laws are liberally construed in favor of the retiree to achieve their humanitarian purpose of providing for the retiree's sustenance and well-being.

• Rules of procedure should be relaxed in order to protect substantive rights and prevent manifest injustice to a party.

• Retirement benefits should be administered and applied in the spirit in which they were enacted.

• Retirement benefits to government employees are part of emolument to encourage and retain qualified employees in the government service.

• Retirement benefits to government employees reward them for giving the best years of their lives in the service of their country.

• Retirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law.

• No law can deprive a person of his pension rights without due process of law.

• Retirement benefits are a form of reward for an employee's loyalty and service to the employer.

• A pension partakes of the nature of "retained wages" of the retiree for a dual purpose: to entice competent people to enter the government service and to permit them to retire from the service with relative security.

• Conversion of retirement mode under R.A. No. 8291 is voluntary and a choice to be made by the retiree.

• GSIS can demand the return of erroneous payments or deduct the amount from future benefits in a cost-efficient and beneficial manner.

• Under R.A. No. 10071, members of the National Prosecution Service are entitled to retirement benefits under R.A. No. 910.

• GSIS, as the agency tasked with administering the benefits of retired government employees, has the mandate to promote the efficiency and welfare of the employees of the government and should perform its tasks with competence, proficiency, and compassion.