STATE pension fund Government Service Insurance System (GSIS) announced last Friday that beginning July 2013, government employees working in agencies who are delayed or deficient in their premium payments will not have their loan privileges suspended anymore. The new policy also provides remedial guidelines for agencies already suspended so that their employees’ GSIS privileges can be restored.
On April 25, the GSIS Board approved a new policy which addressed agencies’ non-remittance of premium contributions, without resorting to the suspension of the loan privileges of its employees.
“It’s wrong that these employees lose their access to GSIS loan windows and dividends when their social insurance contributions are mandatorily deducted from their salaries,” said President and General Manager Robert Vergara.
Suspended agencies may choose any of three options to restore their regular status.
They may pay their premium delinquencies in full; or restructure their arrearages and commit to settling these through a Memorandum of Agreement (MOA) with GSIS; or upon payment of at least 90% of any three consecutive months’ premium obligations beginning July 2013, sign an undertaking to enter into a MOA with GSIS for the settlement of its premium deficiencies.
To date, more than 200 agencies have concluded similar agreements with the pension fund — restoring the full benefits of over 800,000 employees, including the Department of Education.
PGM Vergara explained that unless the suspended agency pays its arrears in full or honors its obligation to pay under the terms of the agreement, retirement benefits of employees will be based on periods with paid premiums. However, GSIS will still consider the total length of service in determining the eligibility of members to retirement, or a minimum of 15 years.
Meanwhile, delinquent agencies defined as those who fail to remit at least 90% of the mandatory premium contributions for a due month (10th day of the following month) or comply with the terms of their agreement, will receive the appropriate demand letter and a subsequent notice of default from GSIS should the amounts remain unpaid.
These notices will remind agencies that GSIS has not received the prescribed amount for the due month and continued non-payment will reduce their employees’ entitlements adversely impacting their loanable amounts and retirement benefits.
GSIS will also coordinate with Agency Authorized Officers and heads of employees’ union and personnel office to inform them on the failure of their agencies to remit the required payments.
This latest policy forms part of the continuing efforts of the Board and Management to provide a more member-focused and responsive service to its more than 1.4 million active members. (GSIS)
