Winston Garcia, General Manager and Chief Executive Officer of the Government Insurance Service System (GSIS), was practically screaming to high heaven the other day. He was quoted in every newspaper recently as saying that government agencies – from cities to municipalities, from departments to corporations – owe GSIS a whopping P40 billion in overdue premiums. This huge sum could have been invested in good-earning stocks and bonds for the benefit of members.
These arrears jeopardize the capability of GSIS to make good on its promise to pay the statutory death, disability and pension benefits to members, not to mention all sorts of loans against the cash value of a policy. Even now, members are complaining that it takes weeks to take out a cash value loan. Worse, after some forty years of long and faithful service, while religiously paying his premium along the way, it takes more than six months before an employee receives the maturity benefits of his policy.
But, in well-run, compulsory life insurance organization like GSIS, there should be no premiums in arrears. The employer automatically deducts the employee’s premium from his salary. Congress appropriates the employer’s share in the annual budget. Where has the money gone?
Garcia said that the arrears have been built up over the past ten years. But, he has been running GSIS for eight years now. So, most of the blame for the sorry state of affairs should be placed squarely at Garcia’s feet.
The 1997 GSIS law empowers Garcia to send the erring employers – who act as the collection agents of GSIS – to a minimum of six months in jail plus a hefty fine for failing to remit premiums that have been collected from employees. But, efforts to enforce the law can be describe as puny and futile. Have you ever heard of an employer going to jail for failure to remit premiums to GSIS?
Fortunately, some government officers seem to be waking up to the problem. The other day, Quezon City Mayor Sonny Belmonte, appointed by President Cory Aquino as GSIS General Manager after the 1986 revolution until he decided to go into politics, had a pang of conscience, and coughed up P33 million to update his city’s premiums. If Garcia mounts an aggressive collection campaign, others are sure to follow.
But to clean up the mess, Garcia should look at GSIS itself. There is a lot of fat in its internal operations.
First, Garcia should cut down his public relations budget from a scandalous P151,000,000 a year to something like P20,000,000 a year. The Social Security System with a membership of 25,000,000 (compared to 1,500,000 at GSIS) has an annual public relations budget of P50,000,000. Right off, the GSIS kitty is richer by P131,000,000 a year.
Second, no more full-page ads. No more radio programs, No more TV talk shows.
Third, get rid of your consultants who know little, if any, of insurance.
Fourth, work toward a lean staff. There is clearly a lot of unnecessary staff. For example, the head of the public relations office at SSS is an assistant vice-president. He has a staff of two ladies. At GSIS, the public relations office is run by a Senior Vice-President with a staff of twelve (count them, twelve). Open a voluntary retirement program. Those who retire will not be replaced. No new hiring for the next five years.
Winston Garcia should, at long last, realize that the money he is spending, all too unwisely, is hard-earned money of government employees, more than half of whom are minimum wage workers.
Finally, may I most earnestly suggest that Malacanang should set up a Presidential Commission to look into GSIS, just as President Bush did with the US Social Security System. The Commission should be given six months to come up with a report. This will not be a witch hunt, but a professional and comprehensive management audit of one the country’s most important institutions.
Once and for all, let us put an end to the problems at GSIS.