THE GOVERNMENT Service Insurance System (GSIS) said its fund life will be depleted by 12 years should the government enact a bill pending in Congress lowering the optional retirement age for government employees to 56 years.
In a press conference on Wednesday, the state pension fund said its fund life will be reduced by 12 years to last until 2039 from the current 2051 if the optional retirement age of state workers will be lowered to 56 years from the current 60 years.
GSIS President and General Manager Jesus Clint O. Aranas said the only viable option to reconcile the intent of the legislature and the health of its fund life is to apply the proposed optional retirement age prospectively.
“The new members…can have this package. The old pensioners should not be made to suffer the challenges, because as studies would show, it will reduce the fund life of GSIS,” Mr. Aranas told reporters yesterday.
To sustain its fund life, the pension fund will need an additional reserve requirement of P176.36 billion, he said.
The lower house in November approved a bill which seeks to lower the optional retirement age for government workers to 56 years.
The substitute bill will amend Republic Act No. 8291 or The Government Service Insurance System Act of 1997, which currently grants employees an option to retire at 60.
“These civil servants dedicate 20, 30 years of their lives in the service of the nation. It is high time that the government heed their clamor for the option to retire at an earlier age in order for them to enjoy their retirement benefits for as long as possible,” said ACT Teachers Representative Antonio L. Tinio, who also principally wrote the bill.
A similar bill filed by Senator Sherwin T. Gatchalian is also pending at the Senate Committee on Government Corporations and Public Enterprises as of January 2017. Senate Bill 1289, which was filed on Dec. 15, 2016, seeks to lower the compulsory retirement age of government employees to 55 years old.
“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…when he does retire at the end of the day,” Mr. Aranas said yesterday.
He added that other alternatives of the GSIS are to increase the members’ contribution rate and to introduce a decrease in benefits, although both alternatives “will not be welcomed.”
If these options are not considered, the pension fund president said GSIS will “have to bite the bullet” and face the reduction in their fund life of 12 years. — Karl Angelo N. Vidal