Defense Secretary Gilberto “Gibo” Teodoro Jr. has urged Congress to pass a measure seeking the absolute dissolution of the Armed Forces of the Philippines-Retirement and Separation Benefits System (RSBS) through law.
Defense Sec. Gilberto Teodoro Jr. faces the Committee on National Defense of the Commission on Appointments (CA) Wednesday, Sept. 13, 2023 which deliberated on his ad interim appointment as head of the Department of National Defense (DND). (Senate PRIB Photo)
Teodoro suggested this during a Commission on Appointments (CA) hearing during his ad interim appointment on Wednesday, September 13.
After the AFP-RSBS, which was created through Presidential Decree No. 361, is dissolved into law, the DND chief said its remaining assets should be transferred to the AFP’s retirement trust fund.
The defense secretary also sought the realignment of the AFP’s shares from the Bases Conversion and Development Authority (BCDA) for modernization to the said trust fund, so that these too, would form part of the seed capital for the retirement pay of AFP and DND personnel.
“So the benefit is that there will be a separate trust fund which could be a source of fund for their retirement which is not subject to the financial position totally of the government in the regular General Appropriations Act (GAA),” Teodoro told lawmakers during the CA Committee on National Defense’s hearing on his appontment.
Nevertheless, he said AFP retirees are content with the proposals pending at the House of Representatives; however, he warned active military personnel might gravitate towards the private sector if the government fails to secure their retirement.
“The private sector is ready, willing and able to take them in for their special skills,” the DND chief said.
So far, the latest version of the House of Representatives on the bill reforming the military and uniformed personnel (MUP) pension no longer includes the provision on mandatory contribution, except for new entrants.
Teodoro said he has no qualms on the mandatory contribution for new entrants as they also need to know financial literacy and develop saving habits.
“But if Congress decides otherwise, that would be a big help in boosting the morale and welfare of our soldiers,” he said.
According to Teodoro, the current pensioners of the AFP are at 138,000 only and is unlikely to bloat.
“This is not like our police force and other services that have a ratio of policeman or fireman to population. Their numbers may remain unchanged,” he said.
In an interview at the sidelines, he said the AFP will create a set up similar to the RSBS, but the retirement funds would be managed by the Government Service Insurance System (GSIS).
“Hindi na hahawakan ng AFP kasi hindi naman expertise ng AFP ang humawak ng retirement funds (The AFP would no longer handle it, because the AFP has no expertise in handling retirement funds),” Teodoro said.