LGUs, agencies neglect to pay P1B in GSIS contributions

These agencies owe the state pension fund P1B in premium payments deducted from over 11,300 employees

ARREARS. Many LGUs and agencies neglect to pay employee contributions to the Government Service Insurance System. File photo by Dennis Sabangan/EPA

MANILA, Philippines – Close to 180 government agencies and local government units (LGUs) owe state pension fund Government Service Insurance System (GSIS) around P1 billion in premium contributions deducted from employees.

GSIS will condone interest and surcharges if these agencies sign agreements to settle their obligations.

GSIS President and General Manager said 178 government agencies and LGUs have been “suspended” by the state pension fund for non-remittance of premium contributions.

The suspension affects over 11,300 employees, who cannot avail of loans and other benefits.

“Of the total number of suspended agencies, 83 are from the Autonomous Region of Muslim Mindanao, while the rest are other government agencies, the national government, government-owned and -controlled corporations, and local government units,” Vergara said.

“We’re actually spending a lot of time trying to reconcile with the ARMM provinces on how they will settle their arrears,” he added.

Vergara said it is vital for these agencies to avail of a restructuring plan “so that when an employee of that agency retires now, he will get his full benefits as if there was no premium gap.” (READ: Higher pensions for retired, disabled gov’t workers)

Over the past 3 years, Vergara said some 168 government agencies and LGUs signed memoranda of agreement with GSIS to restructure their obligations. These covered some P8 billion worth of non-remitted premiums.

“We calculate the premiums that they weren’t able to pay. When they show willingness to reconcile, we wipe out all the penalties and surcharges,” he noted.

“The (GSIS) board has also empowered me to condone up to 60% of the interest that’s been charged for overdue payment, or up to a maximum of P75 million,” the GSIS chief said.

Currently, there are 7,100 agencies remitting to GSIS nationwide. – Rappler.com