Close  

AFP to stop collecting pension funds

By: - Reporter / @jgamilINQ
/ 02:27 AM December 15, 2015

THE ARMED Forces of the Philippines is expected to discontinue the collection of contributions to the Retirement and Separation Benefits System (RSBS) in what is considered an overdue deactivation of the 1979 pension plan for military personnel.

In a media interview on Friday, AFP-RSBS president Norman Legaspi confirmed that the military pension fund had submitted a deactivation and liquidation plan to the Governance Commission for Government-Owned and -Controlled Corporations (GCG).

ADVERTISEMENT

The plan includes a recommendation for RSBS contributions to be stopped by January 2016; the refund of RSBS contributions with 6-percent interest amounting to around P12 billion, and the liquidation of around P6 billion worth of RSBS assets to be paced over the next three to four years, Legaspi said.

The development is way behind schedule as former President Gloria Macapagal-Arroyo had already ordered the deactivation of the RSBS effective Dec. 31, 2006.

FEATURED STORIES

Legaspi said the RSBS had become “useless” (“walang pakinabang”) since the government takes care of the soldiers’ retirement benefits.

But almost 10 years after Arroyo’s Executive Order No. 590, the deactivation of the pension scheme had yet to be implemented, and collections for the RSBS had yet to be stopped.

“Ever since, actuarial studies of the RSBS had determined that it was not feasible. I don’t know why there were no changes in its structure, in the amount that the soldiers were contributing, and the amount that the government was giving. Despite it not being feasible, it continued on and on,” said Legaspi, who assumed leadership of the RSBS in 2013.

The RSBS collection hits P1 billion a year, or P110 million a month—an automatic deduction of 5 percent from military personnel’s monthly salaries.

Legaspi said the government had only made a one-time contribution of P200 million to the fund in the late 1970s.

The AFP has 116,000 active personnel.

Legaspi said that upon retirement or separation, military personnel receive a refund of their RSBS contributions, along with the mandated 6-percent interest.

ADVERTISEMENT

He said that so far, they have been able to pay all refunds for retirees.

Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Nation, news, Retirement and Separation Benefits System
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.