ACT vs the GSIS system losses

that are passed to their members

 

May 31, 2008

 

 

 

Lost revenues of GSIS due to 

 

a) their failure to collect premium payments,

b) failure of government agencies to remit premium payments, or

c) due to corruption

 

are recovered from GSIS members in the form of huge deductions from the retirement and other benefits due them,

 

“This onerous policy is the centerpiece of the much-vaunted reforms introduced by Garcia in 2003, which he credits with transforming the GSIS into a profitable concern. This is also at the root of the widespread discontent among public school teachers and other members of the GSIS, since they know only to well that the profits of GSIS are being made at their expense.”


--- ACT Chair Antonio L. Tinio

 

/p
Google

/p
Photos courtesy of Alliance of Concerned Teachers
           


ALLIANCE OF CONCERNED TEACHERS
2/F Teachers’ Center, Mines St. cor. Dipolog St., Bgy. VASRA, Quezon City, Philippines
Telefax 453-9116 Mobile 0920-9220817 Email act_philippines@yahoo.com Website www.actphils.com
Member, Education International

May 30, 2008

NEWS RELEASE
Reference: Antonio L. Tinio (0920-9220817)
ACT Chairperson

Garcia passing on GSIS “system losses” to members

The Alliance of Concerned Teachers today denounced Government Service Insurance System President and General Manager Winston Garcia for passing on the pension fund’s “system losses” to its members. ACT made the statement on the eve of the GSIS’s 71st anniversary on May 31.

“While he’s busy plotting the takeover of Meralco using our hard-earned pension funds, Garcia refuses to heed the widespread clamor against his own policies in GSIS,” said ACT chairperson Antonio Tinio.

Garcia is leading a controversial bid to take control of Meralco, the country’s largest electricity distributor. GSIS holds a 23% share in the utility firm. Public school teachers make up nearly one-third of the state pension fund’s 1.6 million members.

Tinio pointed out that one of the issues raised by Garcia against Meralco, the highly unpopular practice of charging system losses to consumers, may also be attributed to the GSIS.
In the electric power industry, system loss refers to electricity lost due to technical inefficiency or pilferage. The anti-electricity pilferage law (R.A. 7832) allows private utilities to charge up to 9.5% of their system losses to consumers.

ACT likened the GSIS policy of recovering unpaid premiums from its members through deductions from the benefits due them to Meralco’s practice of charging system losses to consumers. “Garcia should look in the mirror first. He has been charging the system losses of GSIS to its members ever since he introduced his notorious ‘premium-based policy’ in 2003,” said Tinio.

Under the premium-based policy, the benefits of GSIS members are computed and paid out based on the actual premium payments received by the GSIS. Before its adoption in 2003, GSIS benefits were based on a member’s years of service.

“Through the premium-based policy, lost revenues of GSIS due to their failure to collect premium payments, failure of government agencies to remit premium payments, or due to corruption are recovered from GSIS members in the form of huge deductions from the retirement and other benefits due them,” explained Tinio. “This onerous policy is the centerpiece of the much-vaunted reforms introduced by Garcia in 2003, which he credits with transforming the GSIS into a profitable concern. This is also at the root of the widespread discontent among public school teachers and other members of the GSIS, since they know only to well that the profits of GSIS are being made at their expense.”

Tinio cited as an example the shortfall in government-share premium payments from 1997 to the first half of 1998 due to the national government’s failure to allocate sufficient funds in the General Appropriations Act. “GSIS lost income because Congress failed to appropriate the correct amount for premium payments. Unfortunately, due to Garcia’s premium-based policy, the unpaid premiums plus compounded interest charges were automatically deducted from the benefits of GSIS members, including thousands of retirees, from 2003 onwards.

“What makes this policy unjust is that by law, the ordinary members have no control whatsoever in the collection and remittance of GSIS premiums,” said Tinio. “For instance, it’s not our fault that Congress failed to appropriate enough funds in 1997-98. It’s not our fault that up to now, GSIS cannot reconcile its records with the Department of Education. As far as we’re concerned, GSIS deductions are taken from our salaries every month. Whether or not these deductions are actually received by GSIS is ultimately the responsibility of GSIS. Garcia’s premium-based policy penalizes the members for GSIS’s failure to collect—whether due to inefficiency, incompetence, or corruption.”

Tinio added that the premium-based policy was not only immoral but illegal. “Unlike the system loss charges of the electric utilities which are allowed by law, Garcia’s premium-based policy violates the GSIS law.” He noted that Republic Act 8291 mandates that members’ benefits shall be computed based on years of service rendered, not the amount of premium paid. Moreover, the law also provides a government guarantee that members shall receive their benefits in full as and when they fall due.

ACT called for the immediate scrapping of the premium-based policy and the full refund with interest of deductions made against their benefits from 2003 to the present. #


 

     
     
           

Home

Send us your feedback