AUGUST 20, 2011 DATE

NR # 2501B
REF. NO.

Bill bans deduction of unremitted GSIS premium contributions from members benefits
The Vice Chairperson of the House Committee on Banks and Financial Intermediaries has moved to prohibit the deduction of unremitted premium contributions of the Government Service Insurance System (GSIS) members from their social security benefits. Rep. Linabelle Ruth Villarica (4th District, Bulacan) filed House Bill 4966 seeking to amend Republic Act 8291, or the Government Service Insurance System Act of 1997, allowing the GSIS to exclude from a retirees creditable service record the period during which the employees office or agency did not remit his premium contributions. The bill aims to institutionalize reforms and corrective measures in the collection and remittance of GSIS premium contributions to protect the interest of GSIS members, according to Villarica. This is to stop the deduction from the GSIS members creditable service records the periods for which their premium contributions were not remitted to the GSIS, Villarica said. Villarica said RA 8291 provides that the employers shall regularly deduct from the monthly salaries of employees GSIS membership contributions or loan payments and remit these to the GSIS. The delay in remittance shall be penalized with 2 percent interest per month, retroactive to the date when the supposed premium was supposed to have been remitted to the GSIS, Villarica said. In case of non-remittance of premiums or loan payments by employers, the GSIS will not include as part of a retirees creditable service record, for purposes of computing retirement benefits, any period for which the employees premium contributions were not remitted to the GSIS by his office or agency, Villarica said. This shortens the creditable period of service an employee, which in effect reduces the benefits entitled to a member, Villarica emphasized. Villarica said these policies punish the employees for the act, omission and offense of their employers or agency, who under Section 5 (c) of R.A. 8291 and Section 3 (2), (3), (4) and (7) of the Implementing Rules and Regulations have the primary responsibility

AUGUST 20, 2011 DATE

NR # 2501B
REF. NO.

and duty to remit its employees premium contributions to the GSIS. Aside from institutionalizing reforms and corrective measures GSIS collection and remittance, Villarica said the measure also proposes to utilize all unpaid premium contributions for payment of contributions of delinquent GSIS members. Under the bill, all unpaid outstanding premium contributions by any office or agency shall be included in its annual budget and remitted automatically to the GSIS by the Department of Budget and Management (DBM). The amount shall be used to fund the contributions of delinquent government employees. After the payment, the GSIS shall not deny or reduce any benefits of any GSIS member for the failure to remit their contributions by their agency, the bill provides. Villaricas bill proposes to amend Sec. 5 of the GSIS Act of 1997 by including heads of offices and agencies other than employers on the penal sanctions to be imposed. The heads of offices and agencies shall likewise be administratively liable for nonremittance or delayed remittance of premium contributions to the GSIS. The Interest on Delayed Remittances under Sec. 7 of RA 8291 shall be imposed more than two percent (2%) simple interest per month and such interest shall be paid only by the employers concerned. The bill also amends the computation of service for the purpose of determining the amount of benefits payable under this Act. The computation shall commence from the date of original appointment/election, and not from the start of payment of premium, including periods of service at different times under one or more employers, those performed overseas under the authority of the Republic of the Philippines, and those that may be prescribed by the GSIS in coordination with the Civil Service Commission (CSC). Violators shall be penalized with a fine of P100,000 and imprisonment of 12 years. (30) lvc