Hike in contributions mulled to shore up troubled GSIS

Malacañang is open to the possibility of increasing the contributions of state workers to the Government Service Insurance Service System (GSIS), which has reportedly been having serious financial difficulties due to bad loans and faulty investments in the past.

Presidential Spokesman Ignacio Bunye said that this remedial measure is being contemplated by the Palace in order to bail out the financially strapped GSIS, which reportedly could not remit the P58 million monthly contributions of government workers to the Employee Compensation Commission (ECC).

Last year, there were reports that the ECC, which funds disability payments to retired government employees, has already suspended the processing of disability claims filed by government workers due to budgetary constraints.

Opposition Sen. Teresa Aquino Oreta slammed the move saying that this is incongruous with GSIS’s repeated claims that it was awash with P20 billion in surplus money from its investment profits.

Meanwhile, Sen. Aquilino Pimentel Jr., chairman of the Senate committee on civil service and government reorganization, asked why the GSIS had to subsidize the ECC to the tune of P58 million when the Employees Compensation Fund (ECF) premium contributions, like those of GSIS membership contributions, are supposed to be automatically and continuously appropriated under the annual national budget.

"If it is true that the GSIS has stood payment of employees compensation benefits up to P58 million a month, this will cause tremendous hardship on the part of government employees who expect the GSIS to answer for their requirements in times of emergency," he said.

"If this negative scenario persists," Bunye added, "the only feasible option would be to reconsider the GSIS request for an increase in the monthly contributions of its members."

"But it may be too heavy a burden to pay to serve the benefit of all," he admitted.

ECC executive director Elmor Juridico said that GSIS had it coming by not taking immediate measures to avert a looming financial crisis.

Juridico disclosed that the State Insurance Fund (SIF), which GSIS is funding together with the Social Security System (SSS), had been suffering from financial problems as early as 1992.

"Since 1992, the SIF was already depleting because ECC is paying claims higher than the annual collection from government workers but the GSIS neglected the issue," he said.

During a House committee public hearing last Tuesday, GSIS senior corporate officer Enriqueta Disuangco said that for ECC to meet its fund shortage, it should raise monthly contributions from government agency employers and their respective employees to P100 each.

The ECC currently requires workers, from both private and government, to contribute P10 to P30 each, with employers contributing the same amount as counterpart contribution.

Juridico disclosed that the ECC has already passed a resolution for increasing the monthly premium of GSIS members starting January this year.

Bunye, however, clarified that Malacañang is prodding the GSIS leadership to work out measures needed to improve its financial position and come up with "what is the least painful alternative" for its members and for the government itself which is battling a swelling budgetary deficit.

"What we’re saying is that this (proposed hike in GSIS contribution) is a last resort that could be adopted by the GSIS," Bunye explained.

"We will leave it to GSIS to take care of the details. What we’re saying is if things could not be avoided, then perhaps, this could be an option that can be explored by the GSIS," he pointed out.

GSIS officials informed lawmakers that there are 32,000 pension beneficiaries from the government sector alone who would suffer as a result of ECC’s lack of funds. – Sammy Santos