GSIS concerned over rightsizing scheme

State-run Government Service Insurance System (GSIS) has expressed concern over the administration’s plan to rightsize the bureaucracy, saying it may put a strain on contributions to the pension fund.

New GSIS President and General Manager Jose Arnulfo Veloso warned that the government-owned and -controlled corporation will encounter difficulties if the rightsizing plan is implemented. However, he said GSIS would still abide by the measure if it is passed into law.

In his first State of the Nation Address, President Marcos Jr. urged Congress to pass priority measures, including the National Government Rightsizing Program (NGRP) to enable the government to enhance its institutional capacity to provide better services while ensuring efficient use of resources. It will also entail a comprehensive strategic review of functions, operations, organization, systems, and processes of different agencies, and massive and transformational initiatives in the agencies concerned, such as mergers, consolidation, splitting, transfer, and even the abolition of some offices.

Ang rightsizing kung ito ay gagawing batas kami po ay magiimplement. Gusto ko lang i-share na talagang mahihirapan kami kasi can you imagine, kakaunti na lang ang contribution na makukuha…at hahaba naman ang aming pagbibigay ng pera kaya talagang mahihirapan kami,” Veloso told reporters in a chance interview.

Sought to clarify whether the proposed rightsizing would mean a shorter fund life for GSIS, Veloso said in a message: “Rightsizing initiative of the government is still in the early stages and determining the corresponding effect on the fund life is premature. GSIS shall proactively assess the fund impact as the rightsizing initiative firms up.”

At present, Veloso said GSIS has a fund life of 31 years, noting that this will be further sustained if they push through with their planned investments in infrastructure projects.

Of its maximum investment limit of P104 billion, P35 billion has already been released for private equity and infrastructure.

“I think it has been steady at that level of 31 [years], pano pa natin mapapahaba pa lalo at yan ho ang aming pagtutulong tulungan.

Makakatulong [sa fund life] ang infra projects dahil talagang napakahaba ang mga cash term requirements niyan kasi long term ang kailangan natin,” he said.

With the proposed rightsizing, Budget Secretary Amenah F. Pangandaman earlier said the government will be able to save a “significant amount of the budget” which in turn may be used to fund priority projects such as building much-needed infrastructure, for social services, programs in the health sector, agriculture, among others.

Pangandaman also said those who will opt to retire among those who will be affected by the government’s rightsizing program will receive appropriate retirement benefits while the others may also apply for positions that will be created as an effect of rightsizing.

Meanwhile, Veloso said GSIS is also eyeing joint ventures with the private sector on their 65 big-ticket real estate properties.

“Yung aming mga large-ticket items, ang plano namin ay joint venture, magkakaroon kami ng announcement kung papaano namin ma-fasttrack na magkaron ng fair bidding for them to participate para magkaron ng joint venture projects so hindi namin ibebenta,” he said.

On the proposed Military and Uniformed Personnel (MUP) Pension Reform bill, Veloso said GSIS would be willing to serve as the fund manager.

If the current MUP pension system would be retained, Veloso said capital infusion is needed since there is no mandatory contribution from this personnel. The government is the one subsidizing the MUP pension fund through the national budget.

Pag nagkaron ng discussion dyan, sisiguraduhin namin na kami ay tutulong na pagmanage pero hindi lang namin pwede isama pondo ng gobyerno dun sa pondo ng military, magseserbisyo lang kami,” he said.

Based on an earlier GSIS actuarial study, the current MUP pension system entails a funding requirement estimated at P9.6 trillion. If the current system prevails, the national government would be required to allocate around P850 billion to MUP pensions annually for the next two decades.