MANILA, Philippines - The Trade Union Congress of the Philippines (TUCP) is urging newly-appointed chairman of the Government Service Insurance System (GSIS), Daniel Lacson, to fully disclose the true condition of the pension fund's $565-million Global Investment Program (GIP).

TUCP secretary general and former senator Ernesto Herrera said GSIS members have no idea whether the GIP has been making or losing money, and to what extent it has been generating gains or incurring losses.

"Over the last 2 years, the global financial markets have been highly turbulent. We reckon the GIP has been shaken by the turmoil," Herrera said in a statement on Sunday.

President Benigno Aquino III last week said he found it unacceptable, explanations that GSIS failed to service its members because of computer glitches.

"When retirees don't get their pension on time, they don't care about the excuses for the delay. They will simply suspect that their pensions have been stolen one way or the other. Or that GSIS does not have the money, and is simply stalling payments," said Herrera.

He said Lacson should also find out the management fees being paid by GSIS to Credit Agricole Asset Management Ltd. and ING Investment Management for overseeing the GIP, Herrera said.

Winston Garcia, former president and general manager of GSIS, said previously that the GIP had a guaranteed 8% annual return on investment. Later, he said the GIP was expected to generate a 5% yearly return.

Herrera said a 5% return "might be barely enough to pay for the investment management fees due Credit Agricole and ING, plus the custodian fees due Citibank, N.A., all of whom are presumably getting paid, whether the GIP is making or losing money."

GSIS launched the GIP in April 2008. It then declared P10.456 billion worth of investments in "global fixed income" instruments, P4.127 billion in "global equities," P3.08 billion in "global property securities" and P8.875 billion in "cash, short-term notes and other investments."

GSIS failed to disclose the exact stakes it had in every type of instrument, and to include the exact amounts invested in every bond, note, common stock and currency swap, at cost.

The pension fund simply indicated that some 40% of the GIP was invested in fixed-income instruments, including sovereign bonds or treasury notes issued by the governments of the United States, Germany, Canada, France, Japan, Italy, Spain and the United Kingdom.

It also implied that some 15% of the GIP was invested in common stocks of publicly traded foreign equities, 11% in property securities and 34% in cash, short-term notes and other investments, including currency swaps.

The GIP included a large exposure in the common stocks of foreign banks, including American, European and Asian financial institutions, many of which have been badly beaten by the global financial crisis.

Herrera urged GSIS under Lacson's leadership to follow the example set by the world's largest public pension fund, the California Public Employees' Retirement System (CalPERS).

He said CalPERS reports on its website the exact number of shares of stock that it holds, including the acquisition cost of every lot of stock, whether US or foreign stocks. He said CalPERS also posts on its website the aggregate daily market value of its investment portfolio, for all to see.

"CalPERS has become the model for all public pension funds around the world when it comes to transparency and clean governance. And GSIS as well as the Social Security System would do well to follow CalPERS' example," Herrera said.