ALLIANCE OF CONCERNED TEACHERS
2/F Teachers’ Center, Mines St. cor. Dipolog St., Bgy. VASRA, Quezon City,
Telefax 453-9116 Mobile 0920-9220817 Email firstname.lastname@example.org
Member, Education International
May 30, 2008
Reference: Antonio L. Tinio (0920-9220817)
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
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
“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. #