AFP chief urges Congress to find cash source for retirees' pension

MANILA, Philippines - Armed Forces chief Gen. Ricardo David Jr. urged yesterday Congress to find funds to finance the unpaid pension benefits of retired soldiers.

Speaking over radio dzBB, David said the military’s requirements for retirement benefits are ballooning.

“That is why our government is looking for money to fund them,” he said.

Under the law, pensioners are entitled to an increase every time active soldiers receive salary upgrades.

When asked if the law on the AFP retirement system should be amended, David said: “There are arrears… The ways and means (committee) of our Congress should determine the sources of funding for the arrears to veterans and retirees.”

Col. Rolando Jungco, AFP Pension and Gratuity Management Center chief, said the government has allotted some P24 billion for pension requirements this year. Around 4,000 to 5,000 soldiers retire every year, he added.

The government owes around P16 billion to about 112,000 military pensioners, Jungco said.

David said at present, the government relies on savings to fund the pension arrears.

“It depends on the condition of our economy,” he said.

“If there are revenues, the government can allot funds (for the pension arrears).

“The government faces a difficult obligation. There is a law (on retirement benefits) but this is not being implemented due to lack of money.”

Earlier, the Department of National Defense (DND) ordered the conduct of studies for a new retirement and benefit system in the wake of concerns that the government may be spending too much for the pension of retired soldiers and policemen.

The study aims to eventually “relieve the national government from supporting military retirement benefits.”

The new system will replace the Retirement and Separation Benefits System (RSBS), which was deactivated in 2006, the DND said.

The move came after Senate ways and means chairman Ralph Recto raised concerns about the possibility that more resources are being allotted for the benefits of retired uniformed personnel than for the salaries of those in active service.

President Ferdinand Marcos created the RSBS in 1973 to serve as a funding scheme for the payment of retirement and separation benefits to military personnel.

The payments are funded by deductions from the salary of soldiers.

The pension fund collected 5 percent from a soldier’s basic monthly pay and ensured a 6 percent return upon retirement plus pension benefits.

In October 2006, the AFP announced that the RSBS was losing money since its funds were invested on low-return real estate projects and loans.

RSBS, which was intended to be self-sufficient, currently subsists solely on the contributions of members.

RSBS officials have announced plans to draft a bill that would form a new scheme to spare the government from having to shoulder the growing retirement requirements.