GSIS: The need to reform

This article on the Government Service Insurance System (GSIS) is dedicated to all the ordinary rank and file workers of the government who, for the last many years, have been deprived of a socially equitable (more from the rich than from the poor) and redistributive (more to the poor than to the rich) social security program as called for and enshrined in the GSIS Charter of 1997 (RA 8291).

Unfaithful to the genuine intention of its Charter, the GSIS has, for the past many years, focused on the promotion and propagation of wealth of the already wealthy members of the Fund rather than alleviating the poverty of the great many rank and file members who continue to languish with their measly pensions as they languished with their measly salaries when they were still employed.

We see today a GSIS pension program that allows such a great disparity in the pensions of the rich which can afford them the luxury of a Mercedes Benz, a BMW, condominium units, and travels abroad all from a month’s social pension when the poor rank and file retiree could not even buy his decent three meals a day much less the medicines he needs from his measly monthly pension.

We see a social pension program that pays pensions in amounts that are 1,500 percent and more over and above the actual cost of living or the consumer price index which a social pension program would normally limit itself to.

For instance, the GSIS pension program of today would allow a monthly pension of P225K or P10,227/per work day if a retiree’s average monthly salary is P250K or P270K or P12,272/work day if one’s average monthly salary is P300K.

This while the pension of public school teachers range from about P400-P600/day. A mere 5 percent of the pensions of rich corporate executive retirees.

This disorientation in the GSIS social pension program resulted from the discarding of an essential requirement of the law and that is the imposition of a CEILING on the monthly pension based on the Consumer Price Index as determined by the GSIS Actuary.

Instead, the maximum pension was pegged by the past administration at 90 percent of the actual average monthly compensation of the retiree. Thus, those whose average monthly compensation reach levels up to P200K, P250K, P300K and more become qualified to pensions equivalent to 90 percent of these compensation levels — once the required number of years of service is complied with.

It is of course perplexing as to why the GSIS actuary had agreed to the discarding of the CEILING on the monthly pension based on the cost of living and allowed a ratio of 90 percent of the average monthly compensation irrespective of the actual amount of the average monthly compensation of the individual retiree.

The generally accepted replacement (pension to compensation) ratio is approximately 60 percent for minimum wage earners, 42 percent for average earners, and 25 percent for high earners.

These generally accepted replacement ratios support the basic principle that social security is a means of social transfer where the social fund is redistributed to the needier sector. The ratios support the social principles of more from the rich than from the poor and more to the poor than to the rich.

This specially so that the government shoulders the heftier portion (government share) of the FUND from where social security benefits are sourced or funded.

The government share contributed by the employer to the FUND should not be considered as private equity of the member which the member has exclusive claim on and right to.

The government share is more correctly and appropriately considered as a common fund put up by the government for redistribution (in accordance with the more to poor than to the rich principle) to the needier sector of the general membership of the System.

By what divine right and ascendancy do those who already enjoyed unconscionable levels of compensation when they were still employed (courtesy of exemption from the Salary Standardization Law) continue to receive such unconscionable levels in pensions, affording them monthly excesses which the rest, the great many could not even afford with their life’s pension.

What loftier purpose did the highly compensated corporate executive officers fulfill in their positions in the comfort of their air-conditioned offices over the services of the public school teachers who spent their entire working lives in Jurassic public school buildings educating the poor children who are the hope of the fatherland, or over the services of the government doctors who braved conditions in far flung barangays to give medical care to the poor and sickly, or over the services of soldiers who risked their lives daily in defense of society and democracy.

No compassionate and moral pension system financed by poorly paid current rank and file members and by a National Appropriations Act suffering from a serious deficit would prioritize the profligacy of a few who already basked in excesses and abundance when they were still employed over the basic food and medicine requirements of the languishing, the hungry, and the sickly public school teacher, national government clerk, and local government mechanic.

Each day that the GSIS continue to implement the policies of the Arroyo administration, unconscionable rates of pensions which find no basis in the law are approved, creditable services are disregarded pursuant to the Premium Based Policy, benefits are garnished without due process pursuant to the Claims and Loans Interdependency Policy (CLIP).

All these are anti theses to the matuwid na daan of President Aquino.

(Those who are interested in more specific details about the GSIS Pension Program, the Premium Based Policy, the Claims and Loans Interdependency Policy (CLIP) can visit my blogsite renatosantico.wordpress.com. E-mails can be sent at [email protected])