Definition and Calculation of Lump Sum Refund
- Lump Sum Refund refers to the repayment amount to the planholder when claiming unavailed benefits.
- Refund amount is calculated based on the number of complete years after full payment of the plan.
- The refund is expressed as a percentage of the contract price, adjusted for any Educational College Benefits (ECB) already used.
- The schedule ranges from 55% after 1 year to 150% after 15 or more years following full payment.
Discontinuation of Lump Sum Refund and Introduction of Optional Exit Mechanism (OEM)
- Prior to this resolution, GSIS discontinued the Lump Sum Refund.
- GSIS implemented the OEM under Provision No. 7, Office Order No. 13-06 dated January 26, 2006.
- Under OEM, active or fully paid Edu-Child and Memorial plans could be terminated with a refund of total premiums paid, but without interest.
Comparison of Lump Sum Refund and OEM
- Lump Sum Refund is financially more advantageous for GSIS because it refunds less than total premiums depending on years and ECB availed.
- OEM refund is a full refund of premiums without interest, thus costlier to GSIS.
Resolution to Reinstate Lump Sum Refund
- The GSIS leadership resolved to approve and confirm the reinstatement of Section XVI concerning Unavailed College Educational Benefits.
- Reinstatement was based on the recommendation of the Vice President, NCR Area II, in memorandum dated May 17, 2012.
Revocation of the Optional Exit Mechanism
- Provision No. 7 of Office Order No. 13-06 dated January 26, 2006, which approved the OEM, was revoked.
- This revocation formally ends the OEM as an alternative exit or refund mechanism for Edu-Child and Memorial plans.