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GSIS seeks more safeguards in personal retirement bill
State-run Government Service Insurance System (GSIS) has asked lawmakers to provide safeguards in the Personal Equity and Retirement Account (PERA) bill to ensure investor protection. In a position paper, GSIS Senior Vice-President Concepcion L. Madarang noted that the bill, which provides for a tax-free individual retirement program similar to the US 401(k) plans, does not guarantee a return on investments. In lieu of a guaranteed income for retirees, the proposed law must ensure monitoring and strict regulatory rules, the pension fund told the joint House committees on banks and economic affairs. "Lending and pre-need companies caused grief and losses of hard-earned savings of our people in the past. Thus, it is imperative that stringent regulations should be adopted to avoid the same misfortune," Ms. Madarang said. She added that the bill must provide for screening of insurance firms that will be looking after public funds. The GSIS official also proposed that investment outlets be limited to stable and nonspeculative stocks and securities. "Stable and nonspeculative stocks are those backed up by the government. Investing in government bonds or stocks will help boost our economy," she added. Under the PERA bill, workers will enjoy a tax credit equivalent to 5% of members’ retirement contributions. Income and distribution of their PERA contributions will also be tax-exempt. The bill seeks to establish supplementary retirement benefits for the working population, a voluntary private alternative to supplement public pension schemes such as the GSIS and Social Security System. The Senate banks committee has approved its version of the bill, but the House of Representatives has yet to come up with its own version. There are several versions of the bill, but House banks committee Chairman Rep. Jaime C. Lopez of Manila has not prioritized any of these for the year.
