GSIS parries allegations of poor investments

Amid allegations of its “mediocre” investment returns, the Government Service Insurance System (GSIS) on Monday said itdisbursed millions of pesos in dividends and benefits to members. In a statement, the state-run pension fund for government workers said it released P650.3 million in dividends to active members and benefits to its retirees.

GSIS said P195.3 million in cash dividends were credited to the eCard accounts of 197,740 active members who were unable to receive the earnings from their compulsory policy for the applicable years 2006, 2007 and 2008.

The average cash dividend paid per member amounted to P987.77.

The fund declares cash dividends based on the income from its life insurance fund in the preceding year.

Dividends declared in 2009 are, therefore, based on the earnings from the life insurance fund in 2008.

The earnings in life insurance are principally derived from two sources: investment income from the life insurance fund and the so-called “mortality gains” or savings.

This year, the GSIS is set to declare cash dividends to qualified members after management assessed the pension fund’s financial operations.

In addition to the dividend disbursements, a total of P455 million in retirement benefit adjustments were paid to 52,846 members who retired from 2003 up to 2010, resulting in an average credit of P8,609.92 each.

This means that some retirees had an increase in their basic monthly pension from the time they retired to the present, GSIS said.

The disbursement report came on the heels of Senator Ralph Recto’s criticism that GSIS should not invest an additional $400 million abroad since the first installment of its investments yielded a “mediocre” return on investment (ROI) of 7 percent in peso terms.

Recto said the pension fund’s cash should instead be diverted to bankrolling the national government’s big-ticket projects under the Public-Private Partnership initiative.

“The local earnings may not match or surpass the 7 percent per annum ROI derived by GSIS from its overseas investments but these could be money worth invested for a national cause,” the lawmaker had said.