Abolition of Armed Forces Pension fund needs a rethink

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The decision of the Aquino administration to abolish the pension fund for the members of the Armed Forces of the Philippines (AFP) is a major policy decision by the government that needs fuller explanation than the two-page news release issued to the media.

This event will come to pass if Memorandum Order 90, as signed by Executive Seretary Paquito Ochoa and presumably approved by President Benigno BS Aquino 3rd, is fully implemented.

Needed: a convincing explanation

We believe the government must provide a convincing brief on the matter because the Armed Forces of the Philippines-Retirement and Separation Benefits System (AFP-RSBS) carries a responsibility that is of far-reaching importance to the nation. It was tasked by law to establish an effective and sound social security system for the officers and members of the nation‘s armed forces, of which there are an estimated 125,000 active members.


As sketchily explained in the press release and in news stories, the Palace has ordered the abolition of the AFP-RSBS because the financial institution is cash-strapped and abolition is a measure to curb inefficient public spending.

Memorandum Order 90 says the interest liability of AFP-RSBS continues to grow and this government-owned and/or -controlled corporation (GOCC) now faces a depletion of its retained earnings by the end of November.

The memorandum noted that the pension and benefits of retired AFP personnel continue to be funded through the General Appropriations Act (GAA). The GCG (Governance Commission for GOCCs) has recommended its abolition because this is in the best interest of the state.

Aquino government gives up on fund

The announcement provided no explanation whatever as to why the AFP pension fund has become cash-strapped and how its management has failed miserably in its mission.

It merely implied that the current government has given up on the fund because it does not have the expertise and knowhow to make it work. In so many words, it implied that killing the pension fund makes more sense than maintaining it.

We are not satisfied by such a bland explanation. There is more to this story than is being told to the public. The issue involves a matter that is of far-reaching importance to the nation.

Consider this. When we speak of the Armed Froces of the Philippines, we are talking of all our armed services: the Philippine Army, the Philippine Navy, the Philippine Air Force and the Philippine Marine Corps.

Equally important to consider also are these salient acts:

1. The nation has budgeted in the 2016 General Appropriations Act P175.2 billion ($3.8 billion) for the salaries, maintenance and operations of our armed forces.

2. The AFP Modernization program that is now underway will
cost $22.9 billion by the time it is completed in 2028.

AFP pension system, a national obligation

It is important to stress these facts and figures because they indicate how important the armed forces are to our people and our country.

Maintaining a sound retirement system for our men in uniform should be a national obligation, not a discretionary policy.

As things stand now, government policies are helter-skelter.

The government shoulders multiple pension packages for the military and other uniformed personnel. Unlike other civil servants, military and uniformed personnel do not contribute premiums to a pension fund, which leads us to ask, why not?

The incumbent RSBS president and chief executive officer says the fund still has sufficient funds and assets at its disposal to cover payments to refund soldier members within three to four years period following its deactivation.

The book value of RSBS now is P16 billion, compared to its liabilities of P12 billion.

To conclude our point here, the Filipino public, and not least our men in uniform, needs a full report on why the AFP pension fund has not worked, who are responsible for the failure, and why the pension systems for civil service employees and private sector employees are comparatively sound and working.

If we can do it for civilian and private sector employees, why can’t we do the same for our men in uniform?

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7 Comments

  1. Maraming asset at RSBS lalo na sa Real Estate like Riviera Golf and Country Club, Ilo-ilo Green Meadows, Bradco malapit sa MOA, at sa iba pang panig ng bansa nagkakahalaga rin ng Bilyon..IPMO sa Taguig na pinapalakad na ngayon ng bata ng isa sa umaklas sa panahon ni Marcos at ang kasalukuyang Pres ng RSBS dating bata ni FVR baka po ang mga property na ito ay mapasa kamay ng mga tiwaling opisyal at henerals.. Be vigilant soldiers pera nyo yan na kinaltas sa inyo……

  2. The best way to solve this problem is by reducing the pension pay of the retired officers of the AFP by 5%. Since during their active duty they receive plenty of allowances even gasoline for their cars are free without paying any amount of centavo for it. This officers even boast that it is their privilege ro have a free gas. Now their are retired from the uniform service and no longerproductive it is also duty of the state to slashed/reduced their pension pay. That is the best solution!!

    • every retired uniformed personnel put their lives and limbs to serve and protect this country….please do not say our retirees are no longer productive upon their retirement because what you are enjoying today is the fruit of their sacrifices in the field while you are soundly sleeping inside your house…instead honored them and the state should in return give what is due to them….

    • Debbie Dane Babaran on

      Hello Miss Lenin,

      their pension is not even big.
      My father is a retiree, he got the biggest scar that I could imagine.
      He got the scar by serving our country. 8 billion. That is the amount that our government has not yet paid for our retirees during their time of their service, that amount is for their unpaid leave (which should have been paid when they are still serving our country) while our government budget their 4P’s project almost a 100 billion pesos, which make our fellow countrymen unproductive. As you know, as per my father said, once their will be another world war, all of them (AFP) even the retirees are required to protect our country, to think that he is a senior citizen and still serving our fellow people as a Barangay Official. I almost lost my father, and my child almost lost his grandfather by serving our country. Hindi basura ang buhay nila na pwede natin ipa walang bahala dahil sa tingin natin ay di sila productive.

  3. Give honor and medal and of course good pensions for those who served in the AFP…Mr President, pls do not threat AFP retires just like an ordinary worker. They served and even will sacrifice their lives for the country if necessary.

  4. Mr. President-Aquino, think twice before you decide on major issue. Officers and Men, sacrifice their life for our country. In other countries, like U.S, G Britain, Germany, Japan, they give honor and benefits to her retired officers and men. Why can we not give the same benefits.

  5. Because all the governments money has been pilfered out by CALIGULA (BSA) and his cohorts. Poor soldiers. Wake up Soldiers say something. Before the end of his term expect something worst people!!! This animal ain’t finish yet.