Probe ‘risky’ GSIS investment plans — congressmen

OPPOSITION lawmakers in the House of Representatives filed on Monday a resolution seeking to investigate alleged irregular investments plans by the Government Service Insurance System (GSIS) which puts state pensions at severe risk.

According to House Resolution (HR) No. 1705, the GSIS is exposing its insurance members to risks of capital wipeout due to its investments.

“We need to investigate these investments and ensure that the GSIS is transparent and accountable in its dealings,” Deputy Minority Leader and Party-list Rep. France L. Castro said in a statement. “We must protect the pension funds of our government employees and workers from inefficient and/or corrupt practices.”

Citing a Commission on Audit (CoA) report, the lawmakers noted that GSIS invested a total of P2.3 billion in three different companies, of which it already lost P183 million due to the stock investments.

The investments threaten GSIS’ solvency and exposed its members’ contribution to risks as it invested in the companies which have no “proven track record of profitability over the last three years,” the resolution stated.

The GSIS did not immediately respond to an email seeking comment on the matter.

Earlier, former party-list representative and Makabayan bloc member Ferdinand R. Gaite warned the government against allowing the GSIS investments in a firm previously owned by Lehman Brothers — the American financial services provider that filed for bankruptcy in 2008 amid the subprime mortgage crisis in the United States.

Current members of the Makabayan bloc alleged that the pension fund violated its policy prohibiting the investment on companies with a market capitalization of less than P15 billion by investing in a company valued at P2.8 billion.

They said congressional probe will attempt to identify possible vulnerabilities to GSIS’ investment policies that could expose the pension fund to capital wipeout risks.