Be it  enacted by the  Senate and House of Representatives of the Philippines in Legislature assembled and  by the authority of the same:

SECTION 1.  Section one of Act Numbered Three thousand and fifty is hereby amended to read as follows:

"SECTION 1. Beginning on the first day of April  next following the date of the approval of this Act, all teachers, principals, supervisors, inspectors, superintendents, and other  persons employed in supervising  and directing the school work of teachers in the public school service of municipalities, provinces, and the Insular Government of the Philippine Islands, whose positions are not classified as purely clerical, without regard as to status in the classified civil service of the Philippine Islands, who have on that day, or who shall have on any date thereafter, rendered at least twenty  years of service as computed in section seven of this Act, and who  have not been removed from the service for cause, shall be eligible for retirement on an annuity as provided in section two hereof:  Provided, That teachers, principals, supervisors, inspectors, and superintendents detailed or serving in, the Department of  Public Instruction and engaged principally  in the inspection and supervision of  private  schools, in accordance with Act Numbered Twenty-seven hundred and six, shall also be entitled to a pension under the terms  and conditions herein established: Provided,  further, That lecturers and other special instructors who render  provisional service shall not be eligible for pension nor shall such services be counted as teaching service in computing the length of service of a teacher: And provided, finally, That the provisions of this Act shall not include persons who are not  citizens of the Philippine Islands or of  the United States of America."

SEC. 2. Section five of Act Numbered Three thousand and fifty  is hereby amended to read as follows:

"SEC. 5. Upon death of an employee entitled to the provision of this Act who is rendering service at time of death or who is retired on pension, he shall have fifty per cent of the pension to which the employee would be  entitled if alive, paid to surviving acknowledged children of his or her issue for a period of not to exceed ten years, or to the surviving lawful husband or wife if there are no children eligible under the provisions of  this Act to receive the same, or to his or her surviving parents, father or mother, if there are no children or lawful  husband or wife eligible under the provisions of this  Act to receive the benefits thereof:  Provided, That pension funds shall not be  paid to children over eighteen years of age  or to married  children, or to a remarried surviving wife  or husband, nor to parents under the age of sixty years."

SEC. 3.  Section eight of Act Numbered Three  thousand and fifty is hereby amended to read as follows:

"SEC. 8. Beginning on the first day of the fiscal year fol- lowing the approval  of this Act and  annually thereafter there  shall be included  in the total sums appropriated for pay or compensation of employees to whom this Act applies a sum equal to three per centum of the total sum for pay or compensation made by Insular, provincial, or municipal legislation, and the said sum shall be transferred on the books of the Insular Treasurer to the  credit of a special fund to be known as the 'Teachers Retirement and Disability Fund,' and said fund is hereby appropriated for the payment of annuities, allowances, and expenses as provided in this Act, and for investment by the 'Tension and Investment  Board' created in section twelve of this Act.  The 'Pension and Investment Board" is hereby directed to invest from time to time such portions of the 'Teachers Pension and Disability  Fund' as shall not be required to  meet the current payments, in the form of annuities or otherwise, and expenses, incident to the carrying on of the provisions of this Act, in any or all of the following ways and in no others:

"(a)  In interest-bearing bonds or securities of the Government of the United States or of the Philippine Islands, or bonds or securities of said countries for the payment of the interest and principal of which the faith and credit of said countries is pledged.

" (b) In  interest-bearing  deposits,  under  security approved  by the  Board, in  any bank doing  business in the United States or in the Philippine Islands having an unimpaired  paid-up  capital and  surplus equivalent to one million five  hundred thousand pesos  or over:  Provided, That  said bank shall first have been designated as a depository for this purpose by the Governor-General, upon the recommendation of  the insular Treasurer.

"(c)  In first liens upon  improved, productive, and unencumbered real estate in the City of Manila with a title duly  registered under  Act Numbered  Four hundred and ninety-six, as amended: Provided, That no loan shall be made upon the security of real estate in excess of fifty per centum of the fair appraised value thereof, to be determined in such manner as the Board shall prescribe, subject to the rule that the durable income from  such real estate shall constitute the main factor  in the determination  of value: And provided, further, That no loan  shall be made  for a period exceeding three years, and that not more than thirty per  centum of the total investments made by the Board shall be on the security of real estate.

"The Board shall  have the right to foreclose any loan  in the event of any material depreciation  of the value of the security or if the terms of the loan contract are not complied with.  It shall also make proper provision for the insurance of all property, subject to damage by fire, which shall be held by it as security.  The Board shall also have the right to hold, for a period not exceeding five years, such real estate as may come into its possession on  account  of money loaned.

"(d)  In commuting installment payments due from the Government of the Philippine Islands to individuals upon the proper assignment of the individual's claim to the Board. "(e)  No  loan shall  be made by  the  Board  from  the 'Teachers' Pension and  Disability Fund,' directly or indirectly, to any member of said Board, and any member of said  Board receiving  such a loan or authorizing or making any such loan shall be guilty of a felony and be punished by imprisonment for not less than five years or by a fine of not less  than two  thousand  nor  more than  twenty thousand pesos, or both, in the  discretion of the Court.

"(f)  Whenever the  current surplus  of the  'Teachers' Pension and Disability Fund' shall fall below the amount of fifty thousand pesos, no  new real-estate loan shall be made by  the Board.

" (g)  The Board is authorized, in making investments pursuant to this section,  to fix the terms thereof in such a way as shall preserve the  funds from any loss due to depression in the medium of payment and to take any other precautions which in its judgment are deemed necessary for the adequate conservation of said Pension Fund."

SEC.  4. Section twelve of Act Numbered  Three thousand and  fifty is hereby amended to read as follows:

"SEC.  12. There is  hereby constituted for the enforcement of this Act  a 'Pension and Investment Board'  composed of the Secretary of Public Instruction, who shall be chairman, ex-officio, the Director of Education, the Insular Treasurer, the Insular  Auditor, and the Director of Civil Service, none of whom shall receive additional compensation, and of three other persons appointed by the Governor-General, with the advice and consent of the Senate.  Said three persons shall not  receive any compensation.  The 'Pension and  Investment Board' shall during the month of July of  each fiscal year submit to the Governor-General a report of operations under the provisions  of this Act and shall recommend to the Governor-General for including in the Insular budget for the fiscal year to follow,  a sum sufficient to pay the retirement allowances and other expenses for that fiscal year whenever the funds made available by  the operation of sections eight, nine, and ten of this Act are insufficient."

SEC.  5. This Act shall take effect on its approval.

Approved, March 16, 1923.