MANILA, Philippines — The Quezon City local government has committed to pay the Government Service Insurance System (GSIS) to settle the city hall’s previous non-remittance of premium contributions from its employees for over 15 years.
In a statement Friday, the GSIS said its president and general manager Jesus Clint O. Aranas and Quezon City Mayor Herbert Bautista last May 2 signed a memorandum of agreement (MOA), under which the local government will pay the state-run pension fund P53 million in unpaid interest on premium arrearages, even as its outstanding obligations already reached nearly P139 million.
Under the MOA, the GSIS will condone P75 million out of the Quezon City government’s unpaid dues.
In 2015, the GSIS board clarified that only unpaid premium contributions were covered by condonation through MOAs to be undertaken with delinquent agencies.
Also, the GSIS president and general manager had been granted authority to condone up to 60 percent of interest on premium arrearages, but not exceeding P75 million.
The GSIS said this MOA will benefit 8,422 employees of the Quezon City government.
“Since the computation of GSIS benefits is essentially anchored on the members’ length of service with paid premiums, affected former and present Quezon City government employees will receive higher loanable amounts, retirement and pension benefits, and life insurance claims. After the payment has been posted, inactive Quezon City government employees with previously processed and paid benefits can expect recomputation of their separation or retirement benefit, which may bring about increase in their monthly basic pension,” Aranas said.
“Moreover, those who are still in the service are assured to receive the correct level of benefits when they apply for loan privileges and claim benefits. Active and inactive members whose maturity or cash surrender value claim proceeds have been reduced due to deducted arrears in premium can likewise expect a refund,” the GSIS chief added.
“Efforts to settle GSIS premium arrearages incurred by the Quezon City government from July 1997 to December 2013 goes as far back as the administration of former Mayor Ismael Mathay Jr. It was only on November 22, 2018, under the leadership of Mayor Bautista, when the parties finally established that the outstanding interest obligation of Quezon City government is almost P139 million,” he further explained.
“After the P53 million settled by Quezon City government under the MOA has been posted, all premium arrearages incurred by the affected members during reconciliation period will be fully paid,” according to Aranas.