GSIS scraps cap on compensation
By Rose Palacio
Davao City (13 January) -- The Government Service Insurance System (GSIS) has removed the average monthly compensation (AMC) limit set by Republic Act 8291 or the GSIS Act.
AMC is the average monthly salary for the last 36 months of service rendered by a member and is the basis, apart from years of service, of computing retirement pay.
The removal increases of benefits offered by the GSIS Act to members.
For those receiving less than P16,000.00 monthly, they will continue with the same level of benefits and contributions. Should their monthly salaries increase and exceed P16,000, their benefits and contributions will be adjusted accordingly.
The effect on the monthly contributions is that the absolute increase in personal contributions is equal to seven percent of the difference between the monthly salary and the P16,000.00 AMC limit.
The personal contribution is now straight nine percent of the basic monthly salary while the employer’s contribution is at 12 percent of the basic monthly salary.
Since the GSIS contributions are tax deductible, the decrease in the net take-home pay will actually be less.
With the removal of the AMC limit, the monthly retirement pension will be a lot higher than the take-home pay while in active service, GSIS said. (PIA-RPalacio) [top]