GSIS Accomplishment

5/28/2018 GSIS Accomplishment

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In line with the thrust of the Aquino Administration to

institute transparency, accountability and good

corporate governancein the bureaucracy, the new

GSIS leadership immediately focused on putting the

GSIS house in order. Guided by its new vision and

mission to rebuild the pension fund as a center for

providing world-class service, the GSIS will strive to

be an organization that is transparent, autonomous

and beyond public reproach.

The new governing Board and Management embarked

on a comprehensive review of policies, systems and

processes to provide responsive service to its more

than 1.7 million members and pensioners. The

review also aims to restore the social mission of theSystem by providing a basic safety net for government

retirees in their old age balanced with the requisite

corporate financial strength and integrity of the fund.

The GSIS further implemented measures to improve

member-servicing, build closer rapport with its

stakeholders through regular dialogues, and promote

transparencyin its transactions.


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1. Release of Service Loans andSocial Insurance Benefits

From January to July 2011, social insurance benefitscomposed of life insurance, retirement, pension,survivorship, disability, unemployment and funeral benefitspaid by the GSIS reached Php24.87 billion, up by 27.1percent compared to the Php19.57 billion released for thesame period last year. This significant increase is attributedto the following:

More accurate computation of claims and benetsas a result of the massive reconciliation project thatbegan in the 4th quarter of last year, and which hasbrought the level of un-reconciled accounts into a

more manageable level; and,

Timely release of retirement benets (which accountsfor more than 70% of the social security benefits paidby the GSIS) with the strict implementation of the Anti-Red Tape Act of 2007 (RA 9485). The GSIS has astanding policy on the release of retirement benefitsof members at most, 30 days from the date of theirretirement, provided, the member has submitted thedocumentary requirements at least 90 days before theintended date of retirement. Moreover, the accountsof those who are for compulsory retirement (i.e. will

retire at age 65) are automatically pre-processed bythe GSIS two (2) months before their retirement date.

For the period January to July 2011, the GSIS releasPhp62.91 billion in service loans to more than 800,0

members. These loans comprise the Salary (ConsolidaLoan, Policy Loan (Regular and Optional), Pension LoEmergency Loan and UMID Cash Advance Loan. SaLoans make up 85.97% of the loans availed by members, followed by Policy Loans at 8.16%, EmergeLoans at 2.49%, Pension Loans at 1.88% and the UMCash Advance (introduced in May 2010) that makes1.51% of the total loan availments for January-July 201

GSIS members apply for different loan programs throuany of the G-W@PS kiosks deployed nationwide in all Gservicing offices, provincial capitols, city and selecmunicipal halls as well as selected government agenc

Through these G-W@PS kiosks, the GSIS cuts down processing time of loan applications to an average of thto five days.

2. Revised survivorship policy(approved in December 2010,guidelines out on 10February 2011 and implementedretroactively)

Under the old survivorship policy, primary and secondary beneficiaries, excdependent children, shall be entitled to benefit subject to the following:

- not engaged in any gaioccupation;

- surviving spouse and deceamember were living together husband and wife;

- not gainfully engaged in a busineseconomic activity (self-employed);

- not receiving any other pension fGSIS or another local or foreinstitution or organization; and

- in the case of the dependent spoupayment of the basic survivorspension shall discontinue when remarries, cohabits or engagescommon law relationship

I. BENEFITS

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Strongly believing that pension is a right of amember -- not a privilege-- and that members

should enjoy this right whether they haveother income or pension, the current Boardremoved these stringent provisions which hasprevented our survivorship pensioners fromenjoying this benefit. Surviving spouses ofmembers and pensioners can now receivetheir monthly pension benefits even if they aregainfully employed and receiving income orpension from other institutions.

The Board also placed a cap in the pensionto avoid large disparities in benefits. That is,the maximum amount of basic survivorship

pension should not exceed 50 percent of Step8 of the current salary of an Undersecretary,the highest career position in government,under the Salary Standardization Law.

Among the policies that the GSIS has amendedso far, this is the only policy whose applicationis retroactive. That is, for those whosepensions got suspended under the old policyas far back as August 2009, GSIS will restorethe accrued amount covering the period ofsuspension; for those whose pensions weredenied, GSIS will process applications and

compute retroactively. More than 6,000surviving spouses whose pensions werestopped and disapproved since August 2009stand to benefit from the new survivorshippolicy.

Moreover, under the recent policy ofconstructive notice of application, the period ofprescription for survivorship pension shall notapply for as long as the surviving spouse andheirs have already submitted an application forfuneral or death benefit.

3. From CLIP to CLASP, 1 June 201

In April, the governing Board revised the Claand Loans Interdependency Policy (CLunder which the outstanding arrears incurby members are deducted from the proceof their new loans, often resulting in zproceeds when they retire. Effective June

year, the new program dubbed the ChoicLoans Amortization Schedule for Pension(CLASP), aims to make it less burdensofor retiring GSIS members to settle toutstanding obligations by giving them options to settle these either in whole (10or in part (75%, 50% and 25%) throug

restructured loan payable in equal installmefor a maximum period of 3 years. An averof 926 retiring GSIS members per monthbenet from the new CLASP policy.

To protect the interests of the GSIS and retiring member, a loan redemption insura(LRI) will be attached to the restructured loIn case of death, the obligation is considefully paid by virtue of this LRI, hence, surviving spouse and dependent children be able to receive their benefits without deduction.

More importantly, the GSIS will no lonunilaterally deduct housing loan obligatifrom the retirement proceeds of its memb

which not only results in a substantial reducof the benefit but in loss of property as won the part of the retiring member. The Bo

viewed that since housing loans are considecollateral loans, outstanding balances shonot be forcibly collected from the membbenefits.

For soon-to-be retirees, GSIS conducts pretirement counseling seminars every montdiscuss the various retirement modes to tefuture retirees how to compute their retiremclaims under each retirement law. With recent enactment of the new retirement lawRepublic Act 10154, the GSIS will release retirement benefits within 30 days, after acdate of retirement, provided retirees subtheir requirements at least 90 days before effective date of their retirement.


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II. SERVICERESPONSIVENESS

4. Held Dialogues with Stakeholders

As part of being transparent and consultative,we actively engage with our stakeholders acrossthe country through consultations and dialogues.

Attended by a cross-section of government units,liaison officers of national government agencies,public information officers and members of the

media, these activities serve as important venuesnot only for conveying our policies and programsbut for gathering valuable inputs for the continualrefinement of our benefit programs.

The GSIS held dialogues with members,pensioners and other stakeholders in Regions 1,3, 6, 7, 8, 10, 11, 12, Cordillera AdministrativeRegion (CAR) and Autonomous Region forMuslim Mindanao (ARMM) since October2010. In November 2010, we reached out to

the countrys largest union of non-teachingpersonnel, the Department of Education-NationalEmployees Union (DepED-NEU) and assured theunions membership that in compliance with themarching order given by the President, the newadministration will prioritize resolving the variousproblems of the teaching and non-teachingpersonnel of the Education Department.

In March this year, the GSIS also engagedin open and candid discussions with therepresentatives of the Association of Concerned

Teachers (ACT). In May, and after more than adecade of acrimonious relationship, the pensionfund opened its doors for a dialogue with theleaders and representatives of the Confederationfor Unity, Recognition and Advancement ofGovernment Employees (COURAGE), theleading umbrella organization of public sectorunions in the country.

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5. Renewed Partnership withthe Land Bank, December 2010

To expand the reach of our servicespecially in the far-flung areas, the Gsigned a Memorandum of Agreem

with the Land Bank of the PhilippinesDecember last year, designating it as

additional service partner. Pensionwill now be able to take advantageLand Banks extensive branch netwnationwide, 70 percent of which arethe provinces. With close to a thousa

ATMs all over the country in additionthe Union Banks network, operatinghours a day, our stakeholders can n

withdraw their loan proceeds and monpension, at no service fee, anytime.

The partnership was unveiled in Batangin February 2010 covering nearly 14,0pensioners under the GSIS BatangRegional Ofce and other GSIS servicofces under its jurisdiction -- Calapan C

Oriental Mindoro; Mamburao, OccideMindoro; and Boac, Marinduque.March and April, pensioners starreceiving their ATM cards in various islaand inland provinces.

Beginning July 2011, the GSIS starsending advisories to active membinforming them they now have freedom to choose between Land Band Union Bank as their servicing banktheir GSIS transactions. In Septemb

we expect the Land Bank to issueUMID-compliant eCard for those wopted to choose Land Bank.


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6. No More Annual Renewalof Active Status forPensioners, 1 May 2011

Effective May 1 this year, the pensionfund cancelled the Annual Renewal of

Active Status or ARAS as a requirementto determine the status of our pensioners.Instead, the GSIS forged a partnership

with the National Statistics Ofce and the

Local Civil Registry which will henceforthdetermine the status of each pensioner.Previously, GSIS required pensioners torenew their active status for the continuousreceipt of their monthly pension. Thisinvolves a personal visit by the pensioner toa GSIS Ofce for the renewal of his active

status on his birth month every year. This

change removes this requirement asaves the pensioner from the troublegoing to our offices given their age afragile state of health.

Meanwhile, pensioners living abroad wostill be required to renew their active sta

via video call or through the use of Skya web-based software that allows usto make telephone calls over the internfree of charge.


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7. Continuing Deployment ofAdditional 500 GWAPS (GSISWireless Automated ProcessingSystem) Kiosks, December 2010

Last December, the GSIS began todeploy an additional 500 GSIS Wireless

Automated Processing System (GW@

PS) kiosks increasing the total numberto 750. This will make it more convenientfor our members and pensioners to applyfor their loans without having to visit anyof our GSIS offices, saving them time andmoney. GSIS will provide one kiosk eachin all the division offices of the EducationDepartment, provincial capitols, city hallsand clusters of municipalities as well asgovernment agencies nationwide. As of15 July 2011, the GSIS has deployed

close to 200 kiosks across the country.

8. Extended Restructuring aCondonation of DelinquentHousing Loans

To give borrowers a chance to updtheir accounts through an affordarestructuring program, the GSIS extendits Restructuring and Condonation Progr

for delinquent housing loan accounts frSeptember 2010 to 30 June 2011. A toof 2,734 borrowers availed themselvesthe condonation program nationwide. Thhousing loan accounts enjoyed 10condonation of penalties and surchargand a maximum discount of 40% accrued interest depending on the amoof down payment to be made.

Similarly, the GSIS gave a chance to m

than 2,500 active and inactive membto settle their outstanding obligatiounder the Stock Purchase Loan Progra

The pension fund offered the condonatprogram in the first quarter of this yeSPL accounts paid on or before July 2011 will enjoy 100 percent condonaton penalties and surcharges and a percent condonation on interest.


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10. Ended the Global InvestmentProgram (GIP) in March 2011

In 2008, the GSIS embarked on the GloInvestment Program (GIP) to diversifyinvestment portfolio and to gain accesshigher growth markets to better meet future claims and benefits of its membe

The GSIS allocated USD600 millionforeign fund managers to generate annual average return of at least ei

percent for the next three years in doterms. A review of the GIP, howevshowed that three years into the Prograthe GIP posted an annual return of lethan four percent.

GSIS informed its managers at the endthe first quarter of its intention to redeeminvestments. By July, GSIS fully repatriaits funds under the GIP. This decision wbased on an assessment of the gloinvestment outlook relative to opportunitin the domestic market. Given the currstate of developed markets, the expecgrowth in the Asian emerging markets, athe numerous opportunities availablethe country, the Board and Managemdeemed it more attractive and prudenrecall its offshore investments.

The move was also in response to Aquino Administrations call to bothe local economy through domeinvestments and to allow GSIS participate in the Public Private Partnersfor the development of vital infrastructin the country.

9. Energized Home LendingProgram

To achieve greater efficiency, the GSISpartnered with the Home DevelopmentMutual Fund (Pag-IBIG Fund) to makeavailable an initial Php5 billion housingfund for lending to GSIS members. Thenew Board and Management deem thatthe pension fund does not have the rightstructure to efficiently administer a housing

program whose implementation started inthe mid-50s. Rather than invest in buildingsuch a home lending infrastructure, it wasdecided to partner with the key shelteragencies which already administer effectivehome lending programs.

Compared to Pag-IBIGs home lendingperformance last year, the GSIS lentonly Php550 million to 600 members

while Pag-IBIG lent Php5.5 billion to over11,000 government employees. Pag-IBIG lent to 10 times more borrowersand 20 times more funds than GSIS.Rather than build internally which will taketime and resources and pursuant to thestreamlining effort of the government,GSIS instead opted to forge a partnership

with a strong housing institution such asPag-IBIG, the governments biggest homelending agency, which has the proveninfrastructure and collection mechanism,to reach more GSIS members.

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III RECONCILIATION OF ACCOUNTS

11. Reduced Volume of Inaccurate Statements

While this issue has yet to be fully addressed, over 90 percent of theremittances are now being posted to the right accounts. The GSIS hasactivated multiple task forces and committed additional resources, and has

been working closely with our technology partners to bring this long-standingproblem to a satisfactory conclusion so that members will finally get accuratestatements of account.

As part of the commitment of the pension fund to settle the long-standing issueon the un-remitted premium contributions of the Department of Education,the GSIS signed a Memorandum of Understanding (MOU) with the DepEd inOctober 2010 to update the service records of all the Departments teachingand non-teaching personnel.

After reconciliation, the total premiums payable by the DepEd to the GSIS

amounted to nearly P25 billion. Discussions among the GSIS, the DBM andthe DepEd are now underway to settle the latters outstanding obligation

which will finally make current the status of all teaching and non-teachingpersonnel.

Further, the GSIS initiated meetings with local chief executives in theAutonomous Region in Muslim Mindanao (ARMM) -- OIC-Governor andProvincial Administrator of Sulu, Maguindanao Governor Toto Mangundadatu

and Lanao del Sur Governor Mamintal Adiong, as well as the Mayors of theMunicipalities of Lanao Sur and Marawi City -- to reconcile and/or restructuretheir premium arrearages and outstanding obligations. As a result of these

representations, most of the suspended LGUs and agencies in the ARMMhave either signified their intent or agreed to enter into a memorandum ofagreement with the GSIS to restructure their arrearages.


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AGENCY2010

PREMIUM2011ABC

BIDAMOUNT

SAVINGS In Php(2010 Premiumviz Bid Amount)

NPC Php53,685,175.38 Php52,520,000.00 Php36,155,908.26 Php17,529,267.12 3

PSALM Php370,175,270.28 Php304,920,000.00 Php238,345,406.06 Php131,829,864.22 3

NGCP $6,686,896.08 $5,958,992.00 $4,701,443.75 Php87,359,902.52 3

MRTC $5,212,443.59 $5,212,443.59 $2,194,453.03 Php132,791,584.64 5

TOTAL SAVINGS (PESO = 43.50) Php369,510,618.40

IV. GOODGOVERNANCETHRUTRANSPARENTTRANSACTIONS


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12. Conducted Open and Competitive Bidding forReinsurance Needs of Big Ticket Agencies

Pursuant to the Aquino Administrations call for good governance by upholding transparency inbusiness transactions, the GSIS held open and competitive public bidding for the reinsurance neeof the National Power Corporation (NPC), the Power Sector Assets and Liabilities Managem

Corporation (PSALM), the National Grid Corporation of the Philippines (NGCP), and the MeRail Transit Corporation (MRTC). As a result of the transparent and competitive bidding procethe National Government generated savings amounting to US$8.5 million or Php370 million frthe lower bids submitted by the winning re-insurers of Php 573 million compared to last yeapremium of Php 943 million. Apart from the savings generated from reduced premium, the insuagencies get improved coverage by having lower deductibles which allow them to claim agatheir insurance for losses or damages at lower participation levels.

13. Review of OrganizationalStructure and the Compensationand Benefits Structure

The GSIS is in the middle of an organizationalrestructuring to achieve a customer-centricfocus with streamlined operations wherethe chain of command is simpler, clearerand shorter.

The reorganization is expected to result

in the progressive establishment of aone-stop shop set up in all of GSIS fieldoffices for more access points and greaterconvenience of our members. GSIS willupgrade its satellite and branch officesso that as much as practicable, decisionscan be made immediately, without havingto refer the matter to the Head Ofce.More ofces will also be established inthe National Capital Region (e.g. Pasig ,Quezon City , Caloocan , etc.).

In compliance with Executive Order No.

7 (dated 8 September 2010 whichrationalized the compensation and positionclassication system in all GOCCs andGFIs) and Executive Order No. 24 (dated 10February 2011 which prescribed the rules

to govern the compensation of membersthe Board of Directors/Trustees in GOCincluding GFIs), the GSIS Board of Trustestarted receiving only the mandaP2,500 per diem for each meeting athe reimbursement of reasonable traexpenses for Board and Commitmeetings. At the same time, the GSIS hfully complied with the requirements of DBM and the Presidential Task Force the Rationalization of Salaries and Bene

created under EO 7.

14. Audit of GSIS Transactions,

Systems and Actuarial Life

The GSIS requested the assistance of Commission on Audit to conduct a spemid-year audit of all GSIS transactionsestablish an effective baseline of what present GSIS administration has assum

from the previous administration. Asfrom the audit of GSIS transactions, GSIS requested COA to initiate a Syste

Audit. The Board of Trustees similundertakes an actuarial audit to enssustainability of the Fund for current afuture GSIS members.


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As of August 2011, the GSIS Investments Portfolio

increased 9% to reach Php580.18 billion comparedto the level in December 2010 as a result ofinvestment returns and net premium revenues.

In March this year, the full repatriation of thePhp30.38 billion investment under the GlobalInvestment Program (GIP) proved to be a timelybusiness decision in the wake of the subsequentsharp decline in equity markets across the globe.

With the redemption, GSIS invested the GIP fund indomestic Equity, Government and Corporate Bondmarkets which have outperformed their international

GOVERNMENT SERVICE INSURANCE SYSTEM

INVESTMENTS PORTFOLIO

August 2011 December 2010 Increase/(Decrease) Per

Cash 45,437,128,035.02 54,738,160,206.88 (9,301,032,171.86) -1

Derivatives-Foreign Exchange 1,744,191,805.13 991,308,444.24 752,883,360.89 76

Fixed Income 249,790,497,528.86 185,203,874,975.01 64,586,622,553.85 35

Tbills - 4,029,367,068.30 (4,029,367,068.30) -10

Bonds 248,176,013,334.27 181,099,507,906.71 67,076,505,427.56 37

Corp. Bonds 1,614,484,194.59 75,000,000.00 1,539,484,194.59 205

Equities 72,743,235,251.26 45,964,317,034.61 26,778,918,216.65 58Stocks-Traded HFT 716,935,059.60 811,447,644.00 (94,512,584.40) -1

Stocks-Traded AFS 59,933,190,856.43 34,552,415,270.89 25,380,775,585.54 73

Stocks- Non-Traded 857,589,739.96 857,589,739.96 - 0

Subsidiaries 573,817,315.03 775,231,870.17 (201,414,555.14) -2

Local Fund Manager 10,040,534,281.41 5,918,321,095.31 4,122,213,186.10 70

GMFI 621,167,998.83 3,049,311,414.28 (2,428,143,415.45) -8

Externally Managed Funds - 30,378,536,495.42 (30,378,536,495.42) -10

Global Fund Manager - 30,378,536,495.42 (30,378,536,495.42) -10

Alternative Investments 2,232,855,956.63 23,669,971,781.48 (21,437,115,824.85) -9Notes Receivables 665,407,615.88 22,241,934,540.73 (21,576,526,924.85) -9

Joint Venture 1,567,448,340.75 1,428,037,240.75 139,411,100.00 10

Investment Property 32,887,216,515.73 32,627,226,039.60 259,990,476.13 1

Loans 175,350,604,724.39 159,536,268,771.54 15,814,335,952.85 10

Total 580,185,729,817.02 533,109,663,748.78 47,076,066,068.24 9

Investments Portfolio

August 2011vs December 2010peers. As a result, our equities portfolio rose 58%

reach Php72.74 billion while fixed income portfoliogrew 35% to reach Php249.79 billion.

The loans portfolio similarly posted a 10% growthamounting to Php175.35 billion. Specifically,pension loans grew by 27% amounting to Php2.0billion, followed by Consolidated Salary Loan(Consoloan) which posted a 15% increase to reacP117.36 billion and policy loans rose 5% fromP21.59 billion in December 2010 to P22.71 billion

August 2011.


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Documents

GSIS Accomplishment