Garcia passing on GSIS “system losses” to members

May 31, 2008 at 6:27 am Leave a comment

GSIS Manager Garcia has his own system loss to explain. As the teachers tell it:

“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…“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.”

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 http://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. #

For photos of press conference:

Entry filed under: 1. Tags: , , , , .

Quote for the day, May 18, 2008 Quote for the day, June 1, 2008

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Blog Stats

  • 21,522 hits

RSS News

  • An error has occurred; the feed is probably down. Try again later.

%d bloggers like this: