Strange, inexplicable GSIS loan

After serving the provincial government of Bukidnon for 31 years, I retired in February 2009 as human resource management officer. I was then appointed provincial administrator, a position coterminous with that of the governor then.

A year later, with the election of a new governor, I was replaced as provincial administrator. I was lucky enough to be appointed provincial consultant.

While I was the provincial administrator and for more than one year after I retired, GSIS premiums were deducted from my monthly pay. However, when I asked for the return of these payments, I was told to apply for the cash surrender value (CSV) of my GSIS policy.

In need of money and expecting some returns, I readily obliged and was told by the local branch manager of GSIS that it would take one week to two weeks for my application to be processed. After some follow-ups, I was told me that I could not expect any proceeds from my claim. Incredulous, I requested for a computation. I was then told that the same would be mailed shortly.

The computation showed that the cash value of my policy was P84,498.01 but with a policy loan of P136,793.85, I had to pay GSIS P52,295.84 instead. I could not believe it! How could this happen when GSIS, as a matter of policy and practice, deducts all previous loans from new loans? And how could a loan be bigger than its collateral considering that one can only take out a percentage of his/her policy’s CSV?

I went to the manager of the local GSIS branch (Cagayan de Oro City) for an explanation, which turned out to be simple: computer error—two policy loans were recorded under my name, and no payments had been made on both. Then the shocker: I was told that nothing could be done about the error; I just have to pay the balance of P52,295.84 before my pension starts, otherwise it would be deducted from the pension I expect to receive starting 2014. I left the office with more questions than answers.

I wrote GSIS Manila about this; I sent the letter via LBC last Aug. 22. GSIS Cagayan de Oro City responded to my letter to GSIS Manila reiterating their previous explanation: a cash surrender value of P84,498.01, less policy loan of P136,793.85, leaves me with P52,295.84 payable to GSIS. But no explanation was given as to how I was able to secure a policy loan bigger than the value of my policy. That was like a bank lending to a client an amount 62 percent bigger than the collateral.

I decided to write about this experience to make other GSIS members aware that the GSIS system is not foolproof. The paperless transaction with the GSIS may be quite convenient but it is also a very convenient tool for fooling GSIS members.

I expected a simple explanation from GSIS president Robert Vergara or from any of his subalterns. The computer can only process what is fed into it!

—ROMEO N. CARDOZA,

provincial consultant,

Restituto Street, Heights,

Malaybalay City