In 2009, the Quezon City Government settled the reconciled principal of its premium arrears with the pension fund amounting to Php 43.088 million. However, GSIS deferred the posting of this amount because of reconciliation issues on the computation of interest charges.
Through the long, arduous negotiating and clarification efforts of the Quezon City Government Panel organized by Mayor Herbert Bautista, and their counterparts at the GSIS, the following issues were resolved, which in effect established favorable precedents for other government institutions as well:
- GSIS will now impose interest on the basis of the number of days of delay in the remittance of contributions, instead of automatically imposing 2% interest for one whole month regardless of just a few days of delay;
- GSIS will provide a grace period of one-year for the remittance of premiums of new employees. This modifies the practice of GSIS to begin requiring the automatic remittance of contributions from date of appointment, even if the new employee’s appointment is still pending attestation by the Civil Service Commission.
- GSIS will impose interest based on the actual deficiency for the month. It will no longer charge interest to include the running balance as well.
- As long as a government institution is able to provide a detailed listing of its employees who are on leave without pay, GSIS will agree not to charge interest on the nonpayment of premiums by such employees. In the same way, institutions must provide updated lists to the GSIS of employees who are separated from service due to retirement, death or resignation, so that GSIS will not charge interest on their nonpayment of premiums.
The impact of this settlement achieved through the analysis of 16 years of past remittance and billing records will be that the social insurance benefits of Quezon City Government personnel covered by the reconciliation will be retroactively adjusted by the GSIS. Todate, the City Government has been stellar in promptly remitting the social premium contributions to GSIS, up to date in submitting relevant records, which has led to an efficient and effective partnership with GSIS.