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GSIS expresses reservations over lower retirement age

Date Posted: January 31, 2019

The Government Service Insurance System (GSIS) expressed its reservations on lowering the optional retirement age for government employees from 60 to 56 as proposed under Bill No. 8683.

“Our main concern on the lowering of retirement age for government employees stems from the results of our actuarial study that it will reduce the financial life of the social insurance fund by 12 years. With a shorter actuarial life, GSIS will ultimately be forced to effect possible adjustments such as putting into play a mix of benefit decreases or an increase in premium contribution or even both in order to mitigate the risk of being underfunded, “GSIS President and General Manager Jesus Clint Aranas explains.

According to him, the fund life of GSIS, if the lowering of the retirement age will push through, will be shortened by twelve years and depleted by 2039, from the current fund life of 2051.

“The shorter actuarial life will be a result of the decreased period of contributions of members that will spell lower collection but longer period of benefits’ payment,“ Aranas said.

He also warned that the proposal would increase the burden of current actively paying members particularly in light of longer life expectancy.