GSIS cool to idea of lowering retirement age in Philippines


MANILA (Philippine Daily Inquirer/Asia News Network): The Government Service Insurance System (GSIS) is cool to the proposal to lower workers’ retirement age, as doing so will slash its contribution collections while prolonging the benefit disbursement period for early retirees.

While the state-run pension fund for government workers and pensioners said it would “comply” in case the bills aimed at bringing down the optional retirement age to 56, from 65 at present, were passed into law, documents flagged risks to the GSIS’s fund life.

“Our mandate is to protect and grow the funds of our members so that we can grant their benefits as and when they fall due. The GSIS has expressed its reservations on this proposal as lowering the optional retirement age would have a negative impact on the actuarial life of the social insurance fund of the GSIS,” it said.

As of 2021, the GSIS’s actuarial life spans 32 years, which means its fund cannot be depleted until 2053.

“Setting an earlier retirement age would shorten contributions,” resulting in “less collection,” the GSIS noted.

Allowing government employees to retire earlier than usual would also “lengthen the period of benefit payments,” resulting in more disbursements, the GSIS added.

“This change in the basic design of the retirement package entails additional cost and would require an additional increase in reserves in order to preserve the actuarial life of the social insurance fund,” the GSIS said.

Also, the GSIS said it would review the proposed hike in the minimum basic monthly pension, to P6,000 from P5,000 at present. This proposal will cover more than 67,000 old-age and disability pensioners.

“The proposal was submitted to the Office of the President in 2019. However, the Office of the President returned the proposal to the GSIS on May 31, 2022, and advised us to resubmit it to the new [Marcos] administration,” it noted.

Article type: free
User access status:
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

Philippines , GSIS , retirement , age

   

Next In Aseanplus News

Realpolitik the order of the day
Being appointed DPM a recognition for GPS, Borneo bloc, says Fadillah
Pakistan ex-PM Khan urges government to hold talks over snap polls
Anwar hopes to restore economic confidence through new approaches in Finance Ministry
INTERACTIVE: Sizing up Malaysia's new Cabinet
Asean News Headlines at 9pm on Friday (Dec 2, 2022)
Ringgit strengthens further to 4.38 against US dollar, highest since June
Numbers rising as Thailand receives over nine million foreign tourist arrivals in Jan-Nov; Malaysians biggest source market
Philippines logs 1,283 new Covid-19 cases and 24 more deaths on Friday (Dec 2)
India extends deadline to levy cap on digital payment transactions

Others Also Read