The Government Service Insurance System is studying proposals to increase the premium rates of members amid moves in Congress to pass measures granting additional benefits for government workers, which could strain the insurance firm’s finances.
This was revealed at a public hearing conducted by the House committee on public accounts chaired by Probinsyano Ako Partylist Rep. Jose Singson Jr., where GSIS chief legal officer Lucio Yu Jr. briefed legislators on the GSIS’s current financial state “in connection with the proposed increase in member premium contribution.”
During the meeting, Singson noted that GSIS officials were unable to respond satisfactorily to queries from committee members as to the financial status of the firm.
Neither did Yu nor his colleagues presented a clear picture of the condition of investments made by GSIS to guarantee sound financial position.
Singson said handling social pension funds for government workers is vital in guaranteeing additional benefits for members.
“There should be a breakdown of your income from investments. How much is coming from financial instruments; how much is the principal amount for investments and other important information,” Singson said, as he lamented that GSIS officials were unprepared to brief them on the public sector insurer’s financial status.
Yu admitted that there are indeed plans to increase premium rates from members but stressed that “this has always been our last resort.”
“As much as possible we want to maintain premium rates, but we also wish that benefits will be somehow stable. That has always been our position,” Yu added.
He said the studies for additional premium were launched as the House of Representatives started to consider bills that would somehow affect the current financial state of GSIS.
One such measure is the lowering of the optional retirement age from 60 to 55. Another is the proposal to amend the GSIS charter to loosen up restrictions among single government employees to assign beneficiaries outside the list of primary dependents of the member.
Singson urged GSIS to study the possibility of adopting a policy that would relax the Charter provision affecting unmarried members. He said this would address promptly the concerns of single members, most of them public school teachers.
During the same meeting, GSIS manager Jenny Lobas disclosed that the firm maintains a fund life that would last until 2044, based on cash flow projections, benefits, contribution rates and other factors.
Together with Kabayan Partylist Rep. Ron Salo, Singson noted that the GSIS actuarial life is ten years shorter compared to the Social Security System.
Singson and Salo commented that unlike GSIS, the SSS already imposed an adjustment in membership premium starting January 2021 and has aired misgivings to bills proposing to grant the president the authority to suspend increases in members contributions in times of emergency.
