State agencies hounded for unpaid contributions

GSIS president and general manager Robert Vergara. PHOTO FROM gsis.gov.ph

MANILA, Philippines—The Government Service Insurance System will go after 178 more state agencies for unpaid premium contributions estimated at over P1 billion.

Robert Vergara, president and general manager of the GSIS, said that because of the failure of these agencies to settle their premium liabilities, an estimated 11,000 employees could not secure their loan and pension benefits.

GSIS manages the country’s pension system for government workers.

But the GSIS has a restructuring program that the agencies can avail of in case they decide to settle their obligations, Vergara said without identifying the concerned agencies.

“A way for a government agency to ‘reconcile’ with the GSIS is to enter into a memorandum of agreement with us. Under the MOA, the agency recognizes its liabilities and we offer them an easier payment plan,” Vergara told reporters.

Since 2010, the GSIS has entered into MOAs with 168 government agencies that have failed to remit premium contributions of their employees, he said.

The MOAs led to the lifting of benefits suspension affecting an estimated 801,000 government employees, including public school teachers employed by the Department of Education.

These also led to the restructuring of about P8 billion worth of premium obligations, Vergara added.

Under the restructuring program, the GSIS may lift the penalty interest and allow the concerned agencies to pay their liabilities for up to 10 years. Also, the suspension of benefits of government employees will be automatically lifted.

“There is no reason for concerned government agencies not to want to [avail themselves of the GSIS restructuring program] because this is for the benefit of their employees,” Vergara explained.

The restructuring program is expected to boost the revenue collection of the GSIS, which last year reported a drop in net income because of a hike in pension benefit claims, Vergara said.

The rise in benefit claims was brought on by the ongoing rationalization program of the Aquino administration. Under the program, organizational structures of line agencies are rationalized and affected employees are offered early retirement packages.

The GSIS posted a net income of P49 billion last year, down by nearly 22 percent from P62.5 billion in 2012.

Gross revenue rose by about one percent to P139 billion, while expenditures jumped by about 20 percent to P90 billion.

The GSIS has 1.44 million active members and about 320,000 pensioners.