outbrain
Close  

GSIS warns against proposed reduction in retirement age to 56

With the measure, fund to get depleted 12 years earlier than programmed
By: - Reporter / @bendeveraINQ
/ 05:36 AM January 31, 2019

State-run Government Service Insurance System (GSIS) stands to lose 12 years from its fund life if the House-approved bill reducing the optional retirement age of government personnel to 56 becomes a law, officials of the pension fund warned yesterday.

If ever Congress would push through with the measure that would allow government workers to retire even earlier than the current early-retirement age of 60, GSIS president and general manager Jesus Clint O. Aranas said the pension fund was hoping it would be applied only to new entrants to public service.

ADVERTISEMENT

“The only viable option is to do this prospectively—for the new members, for the new entrants, they can have this package. But the old pensioners should not be made to suffer

the challenges, because as studies would show, it will reduce the fund life of the GSIS,” Aranas said.

FEATURED STORIES

“It destroys and erodes job security—the pension of a government worker is his job security. It is very important that the government employee knows that he has a solid pension and a retirement when he does retire at the end of the day. That’s job security,” he added.

GSIS chief legal counsel Isagani L. Cruz Jr. said the proposed reduction in optional retirement age would shorten GSIS’ fund life by 12 years to 2039 from 2051 at present.

It means that the GSIS could no longer have funds to disburse benefits by 2039, unless its fund is replenished.

“In money terms, to sustain the fund life, we will need an additional reserve requirement of P176.36 billion,” Cruz added.

Cruz said that besides capital infusion, the GSIS might have no other option but to either increase members’ contribution rate or slash benefits in order to mitigate the impact of the planned retirement age cut and sustain the fund life.

“I think both alternatives will not be really welcome. In the absence of these alternatives, we’ll just have to bite the bullet and face the reduction of the fund life, and expect the fund to be depleted 12 years earlier [than previously programmed],” Cruz warned.

ADVERTISEMENT
Subscribe to Inquirer Business Newsletter
Read Next
EDITORS' PICK
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Government Service Insurance System (GSIS), retirement age
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.