GSIS to Meralco: Disclose features of pension fund

MANILA, Philippines - The Government Service Insurance System (GSIS) on Wednesday said that the Manila Electric Company (Meralco) should fully disclose the features of its non-contributory pension fund, as well as the breakdown of payments made to retired Meralco employees and their survivors through the years. This came from GSIS chief legal counsel Estrella Elamparo who added that reports have reached the GSIS that the Energy Regulatory Commission (ERC) had disallowed a portion of Meralco’s pension cost from being passed on to consumers unless the company is able to justify them. “What we’ve heard is that Meralco does not want to disclose to the ERC the features of its non- contributory pension fund and its breakdown,"she said in a statement. "For a publicly listed company, it is strange and suspicious that Meralco does not want its pension fund scrutinized.This non-contributory pension fund is reportedly on top of the SSS pension fund being given to Meralco executives and employees,"she added. Elamparo also said that the ERC must disallow the entirety of Meralco’s pension cost from being passed to consumers and not just a portion of it. She added that even if Meralco had chosen to keep mum on the subject, a lot can be deduced from comparing its P2.8 billion pension cost and P8 billion labor cost for 2007. “These figures tend to show that the Lopezes are being generous to Meralco employees by providing them pension benefits over and above those offered in the social insurance market," she said. “But the Lopezes should be generous with their own money and not with the money of Meralco customers. If they are not hiding sordid details on their pension fund, then they should tell all about it." Elamparo pointed out the irony of ordinary workers paying for the retirement benefits of Meralco officials and employees. “Here we have a case of Meralco customers trying to secure their future by paying premiums to the Social Security System (SSS) or the GSIS, not knowing that in paying their electricity bills they are also paying the pension premiums and benefits of Meralco workers," she said. Representing the state pension fund in the Meralco board, GSIS president and general manager Winston Garcia had complained against Meralco’s refusal to make available to Meralco investors documents on the operation and deals of Meralco. Garcia had said that if the GSIS, despite its big shareholdings in Meralco, can be denied access to Meralco documents, then what more its customers who are seeking transparency and accountability in the Lopez family’s management of Meralco. The GSIS, along with other government financial institutions, has majority shareholdings in Meralco, but the Lopez family had managed to retain control of the company through the use of dubious proxies during Meralco’s stockholders’ meeting and election last month. Meralco overcharges its customers by 20 to 30 percent compared to other power distributors, according to the GSIS, when its rates should be lower by that range because it enjoys the economies of scale and big volume discounts. Twice already, the Supreme Court had ordered Meralco to refund its customers what it overcharged them, including P30 billion of Meralco’s income tax from 1994 to 2002 which it included in the electricity bills of its consumers. Meralco is also accused of buying more expensive power from Lopez IPPs, which enjoy onerous take-or-pay provisions in their contracts. The Securities and Exchange Commission (SEC) ordered Meralco to desist from holding the election, but the Lopez allies in the Meralco board defied the SEC order and ran to the Court of Appeals to fend off SEC sanction. In exercising its regulatory function over publicly listed companies, the SEC said the Lopezes cannot be allowed to use in their favor proxy votes that had not been verified. - GMANews.TV