The GSIS Global Investment Program: What’s in it for us?
For GSIS members and pensioners, critics wondered aloud if the Global Investment Program would have any bearing to them, even implying that the budget to be used for the Program would come from their loan proceeds and pension claims.
These fears are unfounded, fortunately.
The $1 billion initial budget for the Program constitutes only approximately 12 percent of the total loans and investment portfolio of the GSIS. The budget also forms part of the investible funds of the GSIS, and not from funds intended for GSIS members and pensioners.
PGM Garcia explains that the pension fund decided to invest abroad so that it can meet the future claims and benefits of its members.
“We have a continuing obligation to see it to it that our assets will not only perpetually grow, but will be sufficient to match the contingent and future liabilities of the GSIS to its members,” he says. “We at GSIS are mandated to invest the funds of our members to meet the requirements of safety/security, liquidity and yield. There is no other way to do this but to invest abroad.”
For the GSIS as an institution, the earnings to be derived from the Program gives it yet another opportunity to lengthen its actuarial life, or the period by which it can serve all its obligations to its stakeholders.
“All GSIS executives and employees should be proud of the Program. The success of the program would mean success for the entire GSIS. An institution that can consistently provide services to its stakeholders over the long terms is something that we should all support and strive for,” relates PGM Garcia.
He also stresses that the GSIS should have engaged in the program years ago.
“The GSIS is investing abroad because whether today or tomorrow, GSIS still has to address the serious and nagging problem of absense of diversification and dearth of investment opportunitites which prevent the fund from maintaining its actuarial solvency,” the GSIS chief says.
“More importantly, the GSIS is investing now because it should have done so yesterday. CALPERS, CALSTRS, and other big pension funds in Western Europe have long taken this route. Even the social security funds of our neighboring countries such as Singapore, China, Thailand and Malaysia have also recently gone this direction. We can no longer afford to be paralyzed by fear from doing what we should have done a long time ago,” PGM Garcia points out. - GSIS Layunin February 2008