Good news awaits pensioners of the Government Service Insurance System (GSIS) as the state-run pension fund is considering to give a pension increase this year.
GSIS President Atty. Jesus Clint Aranas said that the Board of Commissioners is set to issue a resolution providing for an increase in the minimum basic pension rate from the previous P5,000 to P6,000. Aranas expects that the said Board Resolution will approved in February or March.
He added that the said increase in pension rates will not affect the viability of the GSIS’ fund life which is currently expected to last until 2051.
Photo Credit: GSIS
Lowering the age of retirement
He warned, however, against the proposed lowering of retirement age, as it will shorten the pension fund’s life by 12 years—or from 2051 to 2039.
Aranas explained that once the proposed bill becomes a law, it will destroy and erode job security. He further added that it is very important that a government employee knows that he has a solid pension and retirement when he retires.
Sustaining the pension fund life
Unless replenished, reduction in the fund life means that the GSIS will no longer be capable of disbursing benefits for the government employees. In terms of actual amount, GSIS Chief Legal Counsel Isagani L. Cruz, Jr. said that the agency needed an additional reserve worth P176.36 million, in order to sustain the pension fund’s life.
Photo Credit: GSIS
Another option for the GSIS to mitigate the impact of lowering the retirement age cut is to either increase the members’ contribution or to reduce the benefits being currently enjoyed by government workers.
If the bill was approved, Aranas is hoping that it will be applied prospectively, or only for the new entrants to the government service.
In December last year, 260 congressmen unanimously voted to approve House Bill No. 8683 lowering the optional retirement age for government employees from 60 to 56.
- Due to Unfair Practices, SEC Bars Lending Firm’s Operation - December 30, 2020
- Motorists Can Use Partially Open Skyway 3, Free for a Month - December 28, 2020
- Monthly Contributions to the SSS’s Mandatory Provident Fund Starts in January 2021 - December 26, 2020