GSIS premium rate hike eyed

MANILA, Philippines — Government personnel might soon have to pay more for their retirement benefits.

Officials of the Government Service Insurance System (GSIS) have expressed support for a proposal to increase premium rate contributions in the retirement fund.

At a virtual meeting last Wednesday, the House committee on public accounts started looking into the feasibility of also increasing the premium rates in GSIS following laws increasing the premium rate contributions in the Social Security System (SSS) and Philippine Health Insurance Corp. (PhilHealth).

GSIS vice president for legal affairs Lucio Yu Jr. said that while the government corporation is not in financial trouble – unlike SSS and PhilHealth – increasing the premium rates would be beneficial to the fund and its members.

“We are delighted not because we are in very dire need of finances, but in view of the different developments, such as the lowering of retirement age bill and other increases in salaries, we might have to explore that possibility just to sustain the fund,” he told the panel chaired by Probinsyano Ako party-list Rep. Jose Singson Jr.

But Yu clarified that such increase in contributions “is our last resort.”

The lawmaker also tackled the financial status of GSIS during the hearing.
During the presentation, GSIS operations group vice president Vilma Fuentes revealed that the fund’s actuarial life is presently at 25 years.

When asked if such period would not be a cause for alarm, GSIS actuary manager Jenny Lobas explained that “the program of GSIS would still be able to pay for the scheduled benefits, however, up to the extent of contributions that would be collected by GSIS.”

GSIS officials further bared that, based on 2019 data, the income of the fund from premium payments amounted to P131 billion, income from loans was around P39 billion, while its income from various investments was P48 billion.

They explained that GSIS charged different interest rates in its different loan programs.
The panel has set another hearing pending submission of the financial statement of the GSIS.

Under Republic Act 8291 or the GSIS law, it is “mandatory for the member and the employer to pay the monthly contributions.”

The rate of contribution payable by the member and the government agency shall be nine percent and 12 percent, respectively, based on the actual monthly salary of the member.

The proposal to increase the GSIS premium rate came just weeks after the scheduled increases in contributions to SSS and PhilHealth this year were deferred due to the ongoing COVID-19 pandemic.