EMPHASIZING the need to quickly put up a “new, professionally-run” military pension system, Senator Imee Marcos moved to ensure effective reforms under a new agency that will replace the moribund multi-billion-peso Armed Forces of the Philippines’s Retirement and Separation Benefits System (AFP-RSBS).
In a statement Sunday, Marcos affirmed the urgency to put back in operation the deactivated AFP pension fund for military and uniformed personnel (MUPs), recalling that their salary contributions “used to earn at a higher interest rate than most banks can offer.”
Marcos, who chairs the Senate Committee on Economic Affairs, pointed out that no pension fund has yet replaced the AFP-RSBS, which stopped collecting member contributions since its shutdown in 2016 “due to gross mismanagement.”
She recalled that “for the past five years, old and newly recruited MUPs could have made more contributions and earned more interest if a new pension fund was promptly set up.”
The lawmaker lamented that “the longer we wait to replace RSBS, the more we deprive our MUPs and their families of earnings they could have already accumulated.”
Marcos suggested that in order to establish a new pension fund, the caretakers of RSBS should first liquidate all its assets as soon as possible, noting that “it already missed its goal to do so in April, based on the 5-year timeline set after its deactivation.”
“Besides speeding up the reimbursement of all member contributions, the revenue from liquidated assets can be used to seed a new self-sustaining fund, independent of the national budget, which RSBS failed to be,” she added.
The senator noted that only member contributions are being refunded by the RSBS to about 130,000 MUPs, with a completion goal in 2022.
“Payouts of retirement and separation benefits are being covered by allocations in the national budget, but these are increasing each year due to salary hikes and the indexation of benefits,” Marcos said.
The lawmaker explained that “RSBS interest payments also keep growing, in effect depleting the retained resources of GOCCs [government-operated and -controlled corporations],” prompting her to press for an inquiry by the Senate Committee on National Defense and Security to “clarify the financial status of RSBS and its ability to reimburse members’ contributions.”
Recalling claims by RSBS that it remains debt-free and far from bankruptcy, the senator also cited findings by the Commission on Audit (COA) that the pension fund overstated its total assets by P2.54 billion and P2.63 billion in the two years prior to its deactivation.
Moreover, Marcos added the COA “also found discrepancies” in RSBS’s statements on membership contributions with “un-reconciled balances” of P10.24 billion in 2017 and P9.26 billion in 2018.
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