GSIS better managed than SSS

It’s no contest should there be a performance audit on one-on-one basis between two state pension fund agencies of the government – the Social Security System (SSS) and the Government Service Insurance System (GSIS).

Such performance audit is most timely as both state pension fund managers of the GSIS and the SSS were appointed almost at the same time by President Benigno “Noy” Aquino III more than three years ago.

The respective performances of the fund managers of the two government financial institutions (GFIs) would be glaringly in favor of GSIS president and general manager Robert Vergara. A professional private fund manager based in Hong Kong before he joined the public service, Vergara steered the GSIS to its present robust financial state of health.

Under Vergara’s management, the once financially troubled GSIS is getting out of the woods and is on the way to full recovery of its pension fund for all government employee-members. And this GSIS did in the past three years without any increase in members’ contribution.

Vergara was virtually credited for this feat in the “unqualified opinion on the financial position” of the GSIS as of December 31, 2012 in the report rendered by the Commission on Audit (COA). An “unqualified opinion” means that COA believes the financial statements of the GSIS are sound and are presented fairly “in all material respects.”

In his report to the GSIS members, Vergara cited this is the second time in a row that GSIS has received an “unqualified opinion” from the COA. Vergara reported 2012 was a “banner year for the pension fund” as it earned a comprehensive income reaching P93.2 billion from P73.2 billion in 2011 and P63.9 billion in 2010 when he first assumed office.

Because of this financial turnaround of the GSIS finances, it was able to service payment of claims for retirement, pension, disability and funeral benefits that have increased by 23 percent from P51.7 billion in 2011 to P63.6 billion last year. GSIS also granted P37.9 billion in various loans which benefited its 1.5 million borrower-members.

The GSIS also received “Excellent” rating from the Civil Service Commission for exemplary service and for complying with the provisions of the Anti-Red Tape Act. To further improve its services to its members, the GSIS will start today paying GSIS members for their claims such as retirement, life insurance, survivorship and pre-need claims through eCard instead of the present use of checks.

The eCard ensures the timely release of benefits and gives the GSIS members the option to withdraw the amount from the nearest ATM (automatic teller machines) and remove the long-standing problem of lost checks. In a statement released over the weekend, Vergara vowed the GSIS management will continue “pursuing improved service and benefits for their members and pensioners remains, as it should, the pension fund’s overarching goal.”

The GSIS feats unfortunately are not replicated by its counterpart pension fund for the private sector. SSS president Emilio S. De Quiros, Jr. is the most unpopular person right now before the bars of public opinion. De Quiros is under fire for being among the SSS top officials who gifted themselves with more than P1 million bonuses each.

What further complicated the case of De Quiros are reports that he has done official trips abroad for the past three years, all expenses charged to his office. The Palace confirmed last Friday De Quiros is currently out of the country again for his latest official trip that took him to Canada and the United States. From SSS record, this would be his 16th foreign trip as SSS chief since 2010.

The bonanza of bonuses came at a time after De Quiros himself announced last week the increase of the monthly members’ contribution from 10.4 percent to 11 percent effective January 1, 2014. De Quiros said the increase in members’ contributions is projected to stretch the life of the SSS fund to 2043.

Currently, the life of the SSS fund is estimated to last 26 years or until 2039. However, De Quiros said SSS had a long way to go to reach the ideal life of 70 years for a pension fund. He stressed the SSS needs to boost its investment reserve fund to extend the actuarial life of its fund.

Actually, as early as July this year when he delivered his state of the nation address (SONA), President Aquino prepared the minds of private sector workers like us who are members of the SSS about this needed increase. The Chief Executive gave very convincing justifications to warrant this increase and there was not much resistance about it.

But what made this forthcoming increase now very unpopular were recent reports that SSS commissioners included themselves in the grant of performance productivity bonus for SSS employees. Those who received bonuses reportedly include Juan B. Santos, SSS board chairman, P1.17 million; Emilio S. De Quiros, Jr., SSS president and who is also the SSS board vice chairman, P1.04 million; Diana V. Pardo-Aguilar, P1.33 million; Daniel L. Edralin, P1.12 million; Eliza R. Antonino, P968,000; Marianita O. Mendoza, P1.02 million; Ibarra A. Malonzo, P1.41 million; and former Labor Secretary Bienvenido “Benny” Laguesma, P1.30 million.

Initially, the Palace spokespersons defended the SSS bonuses as valid and legal under the new law on government-owned and controlled corporations and GFIs like the GSIS and the SSS. Presidential spokesperson Edwin Lacierda pointed to the Governance Commission for government-owned and controlled corporations (GOCCs) that approved the grant of SSS bonus to its officials and employees.

In aid of legislation, lawmakers announced they would undertake an inquiry into these reported shenanigans on how the state pension fund has been mismanaged by the SSS. The 16th Congress resumes session starting today and this inquiry will certainly be scheduled for public hearings as SSS members’ upheaval heats up through social media.

Let me just quote one particular comment – though Lacierda nor any SSS officials were not named – the most stinging tirades on such justifications for the SSS bonus: “Tangna, Palace said SSS bonuses are from profits not contributions. Torpe. The purpose of profits is so you can pay pensions from it. Gago.” Ex-Makati Rep.Teodoro “Teddy” Locsin Jr. posted this in his Twitter account.

Put simply, the GSIS is better managed than SSS. –Marichu A. Villanueva (The Philippine Star)