REVENUE MEMORANDUM CIRCULAR NO. 28-2007 issued on April 20, 2007 publishes the full text of Joint Memorandum Circular No. 2007-1 issued by the Secretary of the Department of Budget and Mangement (DBM) and the President and General Manager of GSIS dated January 2, 2007 entitled “Guidelines on the Recomputation and Refund of the Benefits of Government Service Insurance System (GSIS) Retirees/Members Whose Retirement and Other Benefits Were Reduced by Reason of the Increase in the National Government’s Share in Premium Contribution for the Period July 1997 to December 1998”.

     The Joint Circular was issued to prescribe the rules and regulations to govern the implementation of Republic Act (RA) No. 9358, or the Supplemental Appropriations for Fiscal Year 2006, specifically on the increase in the National Government share in premium contribution from 9.5% to 12% for the period July 1997 to December 1998.

     Subparagraph 1.2, Paragraph 1, Section 1 of RA No. 9358 appropriates the sum of P 3,299,791,000.00 for the increase in the National Government share in premium rate of 2.5% or the difference between 9.5% to 12% from July 1997 to December 1998.

     Subparagraph 2, Paragraph C, Section 2 of RA No. 9358 states that the release of deficiencies in government counterpart contributions due the GSIS representing deficiency from July 1997 to December 1998 shall, notwithstanding any provision of law to the contrary, be considered as payment of the principal and not on any interest due thereon: Provided, that GSIS undertakes to read just the benefit of all retirees whose retirement and other benefits were reduced by reason of such deficiency in employer’s counterpart contributions.

     National Government personnel who were granted life and retirement benefits from August 2003 (when GSIS began deducting the increase in the employer’s share including interest charged thereon from the members) to present shall be entitled to benefits corresponding to payment of the premium adjustment for the period July 1997 to December 1998. All deductions made by the GSIS and thereafter applied as payment for this premium deficiency shall be refunded to the employees.

     Any interest imposed by the GSIS resulting from the increase in government share in premium contribution for the period July 1997 to December 1998 shall be resolved by GSIS and the DBM in separate discussions.

     Specific responsibilities of DBM, GSIS, and concerned government entities/GSIS members are as follows:

     DBM shall:

1. Release to GSIS the appropriated amount of P3,299,791,000.00 for the increase in the National Government share in premium rate of 2.5% or the difference between 9.5% to 12% for the period July 1997 to December 1998;
2. Post to the DBM website (www.dbm.gov.ph) said increase in the National Government share in premium contribution by paying agency/office per GSIS computation.

     GSIS shall:

1. Post to the individual GSIS retirees’ and members’ account the payment corresponding to the increase in the National Government share in premium contribution from July 1997 to December 1998. Any interest being claimed thereon by the GSIS shall not be charged against the retiree/member but shall be subject to separate discussions by GSIS and DBM;
2. Generate and provide the agencies concerned the list of active and retired members that availed of the following benefits starting August 2003 to present:
   1. Retirement benefits; and
   2. Life insurance claims due to matured policy and salary/policy loans (only in cases where deductions in premium arrearages including interest were made by GSIS by reason of subject increase in employer’s share in premium contribution).
3. Process the members’ request within ten days after the receipt of the agencies’ official endorsement;
4. Pay the following to GSIS members concerned:
   1. Adjustment in the retirement benefits and basic monthly pension as a result of the payment of the said increase in the National Government share in premium contribution to retired GSIS members; and
   2. Refund of the full amount deducted by GSIS from active members whose matured policies and salary/policy loans, if any, were reduced as a result of the increase in the National Government share in premium contribution including interest.

     National Government Agencies shall:

1. Verify the accuracy of the GSIS computation posted on the DBM website against agency records relative to the increase in the National Government share in premium rate of 2.5% or the difference between 9.5% to 12% for the period July 1997 to December 1998;
2. Notify the members concerned who are included in the list of active and retired members that availed of the retirement benefits and life insurance claims due to matured policy and salary/policy loans starting August 2003 to present;
3. Provide its current and former employees eligible for the claim with GSIS with copies of the Business Forms (BF) for their accomplishment;
4. Officially endorse and submit the properly accomplished BF to the GSIS office currently handling the claims transactions of its employees.