Securing the future: The GSIS has always been known for its dismal system, lack of transparency and poor service to its 1.7 million members, mostly aging Filipinos who served the government in their prime years. But the social insurance institution is now in much better hands, the new administration says. JES AZNAR

It is the kind of place that Franz Kafka mighty have imagined when writing The Trial. Perhaps the place painter Eduard Munch imagined his character was running away from in The Scream.

Close by the Cultural Center of the Philippines (CCP) complex on Roxas Boulevard in Manila sits the giant hulk of a building that is the Government Service Insurance System (GSIS). To get there you have to ride and pay for the orange CCP shuttle which stops outside the GSIS compound and then walk some 100 meters under the heat of the sun to the main entrance and flights of escalators.

There is no information booth at either the gate or entrance and when you finally get to the lobby, you are faced with a series of windows, countless counters and a multitude of people queuing.

The temperature inside seems freezing because of the centralized air conditioning.

Coming here is not that much of an ordeal if you are young or strong and your legs are fine for walking, standing around and waiting. But it is for the thousands of senior citizens who come here to the GSIS each day.

One such pensioner is Marie dela Cruz (not her real name) who came accompanying her 84-year-old father.

"I came with my father to obtain his first e-card some time ago and witnessed how very, very senior citizens (some as old as 93 years old) are made to report in person all the way from the provinces like Mindoro, Quezon to GSIS offices in Manila to personally apply for the e-card," she said.

"The GSIS office was not geriatric friendly - no ramps, the air conditioning was very cold but the tragic part is that none of the GSIS staff and supervisors showed any human concern - very old and weak people were made to wait after a long journey from their homes."

Dela Cruz is pressing for the new management of the GSIS to put in place substantial and long-term reforms so that its members will fully benefit and finally reap the hard work of their years of service in government.

"Dignity and respect must be immediately restored in the treatment of our senior citizens who have given the prime of their lives to government service," Dela Cruz said.

Her story is by no means an isolated one. Horror stories about GSIS' poor and lamentable treatment of its members abound.

Journalist Raissa Robles has written of how the GSIS system and people combined to "kill" her mother off.

In a personal blog post dated October 19, 2010, Robles wrote how her mother had not been able to receive her monthly survivorship pension as widow of her late father since she went to Canada for a holiday.

“My mother's troubles began when she went to Canada to visit my sister for several months and she was unable to appear personally in GSIS in October as they requested. As a result, in February 2005, GSIS simply “killed” her off on their system without notifying her," Robles said.

Since then, Robles said her mother had not been receiving the monthly survivors’ pension.

Robles wrote that the GSIS office in Quezon Memorial Circle in Quezon City told them that on April 13, 2008, the pension fund manager prepared a check worth PhP 101,634.85 (USD 2,309) -- but that it was subsequently cancelled because her mother never came to claim the money.

Robles says it was impossible to claim the money since the GSIS never informed them about it. She adds that the check was less than the real amount owed. Given the monthly pension of PhP 3,504.65 (USD 80) owed for 37 months, it should have been for a total of PhP 129,672.05 (USD 2,947), she says.

In an effort to fix the problem, Robles brought her mother to the GSIS office in Quezon Memorial to re-register.

"There, she dutifully sat in front of the biometric machine and the technician tried to re-register her existence not once, not twice, not thrice, not four times, not five times, but six times." wrote Robles.

Robles quoted the technician as saying that the skin on her mother's fingers was too thin for the biometric machine to read her fingerprints.

"This did not happen only to my mother. Other elderly pensioners who used the same machine at that time also failed to register: I wonder, is that intentional on GSIS' part? To have a machine that cannot register and read the fingerprints of elderly pensioners? It was actually the second time my mother sat in front of a GSIS biometric machine. About a year before that, she had gone to the GSIS main office in Manila. The technician there was also not able to take her fingerprint.”

But GSIS obtained her new address and keyed that into its database. That is the proof that my mother actually went to GSIS to register her existence," Robles said in her blog.

GSIS Corporate Support Staff Officer III Ana Marie Macuja apologized on behalf of the government department.

"We are pleased to inform you that we have already acted upon your concern and your mother's accrued pension amounting to PhP 203,269.70 (USD 4,620) has already been credited to her e-Card account. The amount represents 58 months of her survivorship pension for the period January 2006 to October 2010," Macuja said in reply to Robles' blog post.

Furthermore, GSIS said that pensioners could now renew their status through the web and through the different GSIS' kiosks in the different agencies.

"In any case, should your mother be incapable of going to any of our office for her annual renewal, she can also request a home visit from any GSIS office and a representative will personally visit her to renew her active status," Macuja wrote.

Robles said the check was deposited to her mother’s account. On December 28 her mother died. She was 87.

Disclosure of financial statements

Speaking to the Philippine Public Transparency Reporting Project, Robles insisted that the GSIS should put an electronic queuing and numbering system for complaints and queries in place so things are recorded properly and people can follow what is happening.

"Every time you talk to GSIS personnel, you have to begin all over again. Their system has no memory," Robles complained.

She also suggested that GSIS put a window on its website where members can automatically calculate how much pension they should be receiving on retirement day given current pension and actuary rates.

"In other words, there should be a pension calculator, similar to what Hong Kong banks have for calculating amortization on loans," Robles said.

In line with this, Robles said GSIS as well as the Social Security System (SSS) should reveal the exact formula they use for calculating pension rates.

"They should not be keeping this to themselves like some top national secret."

Robles added the GSIS ought to do a complete disclosure of all its financial statements every year, similar to what the Philippine Stock Exchange requires of its listed corporations.

"GSIS members must know where their money is invested. This would include a complete disclosure of salaries and benefits and loans received by all ranking GSIS officers from the board to those who run it. If your photo comes out on the GSIS website, the disclosure should also come out," Robles argues.

"It should be what it's supposed to be - a social insurance institution that should give one the peace of mind once he or she retires."

According to information posted on its website, the GSIS is a social insurance institution created under Commonwealth Act Number 186 passed on November 14, 1936. It was supposed to secure the future of all employees of the Philippine government.

It is thus mandated to provide and administer a pension fund that has the following social security benefits: "compulsory life insurance, optional life insurance, retirement benefits, and disability benefits for work-related accidents and death benefits."

GSIS, as designed in its charter, is a social insurance institution under a defined benefit scheme. It insures its members against the occurrence of certain contingencies in exchange for their monthly premium contributions.

The GSIS covers all government workers irrespective of their employment status, except members of the judiciary and constitutional Commissions who are covered by separated retirement laws and contractual employees who have no employee-employer relationship with their agencies.

Also not covered are uniformed members of the Armed Forces of the Philippines and the Philippine National Police, including the Bureau of Jail Management and Penology and the Bureau of Fire Protection.

The principal benefit package of the GSIS consists of compulsory and optional life insurance, retirement, separation, and employee's compensation benefits.

Aside from these, they have so-called service privileges such as salary, policy, emergency and housing loans, subject to the cross-default policy of the System (CLIP).

Simply put, if you work in government for at least twenty years and have a monthly salary of at least PhP 20, 000 (USD 454), you should receive a monthly pension of PhP 13, 674.26 (USD 311) which should begin a month after the date of your retirement.

With the horror stories of pensioners and GSIS members still prevalent, members can only hope that the new administration would finally make GSIS what it should be - a social security institution. After all, it is the members' hard earned money that they deserve to get back.

Service-focused

The Aquino administration has promised to make things better for each of the system’s 1.7 million members. Its new president Roberto Vergara said that under his leadership, the agency will become a service-focused organization.

"I want GSIS to become the most service-focused organization in government. Right now, if you choose a government agency that is the least service-oriented, we would probably be there in the center," Vergara said in an interview with the PPTRP.

He said he wants members to be able to rely on GSIS so that they can get their hard earned money when they retire.

"At the end of the day, that's what we are: We accept the money of our members and we invest it so that when they retire, they can rely on it," Vergara said.

He concedes there is a great deal of work that needs to be done.

"We want to update the accounts. When you go to our office, we need to have frontline staff. We're trying to change that so there's less pinpointing. We want to be able to track your account. We want to be able to get back to you based on a reasonable period of time," Vergara said.

Right now, he admitted that because of problematic records of members' accounts, the agency is currently able to get to back to members after two months of registering a query.

"We want to improve that to a more appropriate timetable. Initially, we want to cut that down to two weeks and then we bring that down to a week. Right now, our problems are computer-related. Once we resolve this, we will have less backlogs," Vergara said.

There is also an ongoing review of the policies of the previous administration.

Finance Secretary Cesar Purisima also expressed confidence that GSIS would now be able to serve the needs of its members.

"We have a good team in GSIS. There were challenges before and they're going to fix it. It's a new team," Purisima told PPTRP.

As head of the department that oversees government-owned and controlled corporations and social security institutions such as the GSIS and SSS, Purisima assured that GSIS is now in much better hands.

The GSIS under the leadership of former President and General Manager Winston Garcia was plagued with criticisms and calls for greater transparency.

Garcia, for instance, was widely criticized for spending PhP 46 million (USD 1.045 million) of GSIS' funds to acquire Juan Luna's Parisian Life painting in an auction in Hong Kong in 2002.

Garcia justified the acquisition by saying that the value of artworks appreciate in time and that the funds used to purchase the painting came from GSIS' profits generated from its investments.

But it's not just the Juan Luna painting that caused government employees and public school teachers to call for Garcia's resignation.

The Alliance of Public School Teachers (ACT) particularly called on Garcia to go after he introduced the Premium-based Policy.

The policy tied members' benefits to whatever premiums they had actually paid.

"All benefits would be based on premium payments; therefore, members could not expect more benefits beyond what their contributions entitled them to," said author Jose Dalisay in a book published by GSIS in April 2010.

Garcia justified the policy, saying that this was to ensure that members actually paid their premiums before they could get their benefits.

"The employer agency could certify that a member had been employed for 20 years, and the GSIS would compute the member's benefits for 20 years, without checking if the member had been paying premiums for that entire duration. This was a problematic scenario if, for example, the member had in fact only been a casual employee for 19 out of those 20 years and therefore began to pay premiums only after he became a permanent employee, say, a year before retirement. This would mean that he would get benefits worth 20 years even if he had paid only a year's worth of premiums," Dalisay wrote quoting then GSIS Vice President for the Membership Group Arni Mercado as allegedly saying.

Dalisay argued that the GSIS had been incurring huge losses over many decades “by absorbing or assuming non-existent premium payments while shelling out benefits."

Teachers, however, continue to appeal to the agency to abolish the policies instituted by Garcia.

And this is what the new administration said is now doing.

In his first 50 days in office “accomplishment report”, Vergara said that the GSIS heeded the call of its stakeholders and is now undertaking a comprehensive review of all policies to resolve all outstanding issues affecting its entire membership.

"These policies which have been viewed as unjust by GSIS members and pensioners include the Premium-Based Policy," Vergara said.

He added that the review envisions "restoring the social mission of the fund by providing a basic safety net for government retirees in their old age while maintaining the actuarial solvency of the fund."

Furthermore, Vergara also said that GSIS also requested the assistance of the Commission on Audit to conduct a special audit of all GSIS transactions to establish an effective baseline of what the present GSIS administration has assumed from the previous administration.

"Aside from the audit of GSIS transactions, we have likewise requested COA to undertake a Systems Audit. The Board of Trustees is similarly undertaking an actuarial audit to ensure sustainability of the Fund for current and future GSIS members."

Vergara hopes that the reforms will be implemented immediately so the GSIS can become the service-oriented organization he wants it to be.

It is too late for the mother of Raissa Robles’ – yet this fervent hope reverberates loudest in the hearts of each and every government employee who counts on their pension fund to secure their future years. Philippine Public Transparency Reporting Project

(The author covers public finance and the macro economy for the Philippine Star. She is also a blogger on development and human interest issues. She won last year in the Think3 global blogging competition organized by the European Journalism Center. Some of her winning entries may be read in her blog site .)