A tale of two pension funds
| DIE HARD III |
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| Herman Tiu Laurel |
Two pension funds dominate the skyline of social security in the Philippines: The Government Service Insurance System (GSIS) with its 1.5 million members and the massive Social Security System (SSS) that serves 29 million workers in the private sector.
The SSS is celebrating its 54th anniversary this year and various festivities are set to mark the occasion, from special benefits for members to an awards ceremony cum tribute to journalists. But to me, through all its 54 years, it was in the past 10 years that the SSS distinguished itself when it surmounted adverse political and financial challenges arising from what many see as unprecedented corruption under Gloria Arroyo. Its older sister, the GSIS, wasn’t as fortunate as it was overwhelmingly damaged by the worst political and financial abuses of the past decade.
The SSS’ 29 million members, along with its thousands of staff and employees, indeed have good reason to celebrate today: At the start of the Arroyo era in 2001 came an immediate existential challenge when the newly-appointed leadership mounted an attempt to initiate the fund’s privatization. The SSS union, the Active and Concerned Employees of the SSS or AcceSSS, staged daily lunch time pickets (which I joined) in front of SSS offices nationwide and succeeded in ousting the Malacañang-appointed “privateer.” If privatization pushed through, the SSS could have faced the same fate as many privatized pension funds all over the world — enticed into the heady and freewheeling private sector financial speculation that unraveled in the 2008 financial collapse. The SSS, in staying public, was thus more conservative and preserved itself.
Also to their credit, active employee-leaders of the SSS put on a brave and militant face against the Arroyo administration, which led the latter to tread carefully in appointing the next administrator.
Fortunately, the new administrator kept herself within the strictures of sound management. It was not until the last appointment made by Arroyo in the wake of the ZTE-NBN scandal that the peace at the SSS was broken.
In all, while the pension fund cruised through 2002 to 2009 successfully, trouble brewed and persisted at the GSIS. A political appointee was entrenched by the past government to head the state pension fund. Without any known credentials, this political scion enthroned at the GSIS proceeded to establish his fiefdom; discriminated against career officers; and redirected GSIS policies to disastrous results.
One of the first things that the then newly-installed GSIS administration did was to “privatize” the P20-billion fund, by transferring its deposits from the state-owned Land Bank of the Philippines to the Union Bank of the Aboitizes. As the latter had only a tenth of the number of ATMs of Land Bank, this severely inconvenienced GSIS members, notwithstanding the clear violation of the law requiring all government funds to be deposited in government banks. After this, many GSIS programs were also redirected on the pretext of building up the fund’s financial resources, but which redounded to reduced benefits.
The GSIS union, in the wake of imagined euphoria post-Edsa II, first attempted a dialog with management but was faced with intransigence and hostility. To cover up this increasing tension, bigwigs at the GSIS purportedly increased their media budget tenfold to paint a rosy picture. Union leaders were eventually fired; and they are still waiting for justice and restoration to this day.
Unlike the GSIS, SSS staff and employees, along with their roster of members from the private sector, were all impervious to the political machinations of Malacañang. The militancy of the SSS union put the Malacañang appointee on the spot very early on.
While a balance of power at the SSS helped maintain adherence to sound management and financial policies, the concentration of power at the GSIS led to alleged massive abuse of its funds.
These abuses at the GSIS ultimately led to the $1-billion investment in Wall Street schemes that caused it hundreds of millions of dollars in losses in the 2008 crash. The present GSIS management recently reported pulling out of these investments. But, without any prosecution in the offing and with nobody knowing how much the past GSIS administration lost in that Wall Street bloodbath, isn’t this just papering over past misdeeds?
On the other hand, the SSS rose from the dark Arroyo decade clean and strong. Kudos to its management, professional staff, and thousands of employees for this. I look forward to my retirement age in a few months’ time, knowing that my contributions are wisely managed. As professionalism and alert union activism have been key to maintaining a healthy SSS, we’ll always be in support of these. To the media affairs office of the SSS, our congratulations for your continued support of information freedom! That is a supreme evidence of the kind of professionalism SSS management is known for.
(My new e-mail: mentong2011@gmail.com. Tune in to Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m. on 1098AM; Talk News TV with HTL, Saturday, 8:15 to 9 p.m., with replay at 11 p.m., on GNN, Destiny Cable Channel 8, on “The ALBA: A Latin American Revolution” with Ambassadors Manuel Perez-Iturbe of Venezuela and Juan Carlos Arencibia Corrales of Cuba; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)
(Reprinted with permission from Mr. Herman Tiu-Laurel)
Source: The Daily Tribune
URL: http://www.tribuneonline.org/commentary/20110902com6.html
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