AFP brass to explain to troops why RSBS will be abolished

The top brass of the Armed Forces will go around camps in the country to explain to troops why the Retirement and Separation Benefits System (RSBS) will be abolished, a senior military official said on Thursday. Maj. Gen. Horacio Tolentino, AFP deputy chief of staff for personnel, said AFP Chief of Staff Gen. Hermogenes Esperon himself would possibly lead the education campaign next week, starting with soldiers based in Mindanao. Sen. Rodolfo Biazon, chairman of the Senate committee on national defense, warned on Wednesday that the abolition of the RSBS, the financial institution that caters to the pensions of soldiers, may spark demoralization within the military. Biazon, a retired general, briefly served as AFP chief in 1991 during the administration of former President Corazon Aquino. Asked to comment on Biazon’s remarks, Tolentino said: "Maybe we just need a little explaining to the soldiers. This is what we are going to do…We already have a communication plan that we organized at my office." "We’ll be going around the camps by next week. We were supposed to start it this week but the Chief of Staff did not agree to it. So we are going to start it next week. He (Esperon) may lead it," added Tolentino. Tolentino said the soldiers are mainly concerned with their pension and the return of their contributions, plus six percent interest, after retirement or separation from the service. The soldiers make a monthly contribution to RSBS amounting to five percent of their base pay. Assets transferred Defense Secretary Avelino Cruz earlier assured that the soldiers do not have to worry, assuring that they would receive their retirement pay and pensions upon retirement. The RSBS assets, valued at least P11.6 billion, would be transferred to government financial institutions like the Land Bank of the Philippines and Development Bank of the Philippines, to ensure that they are well managed. About P9.6 billion of the total assets of the NDCC are invested directly in real estate and realty-related equity investments while the rest are in the form of cash or invested in stocks, according to Cruz. The defense department plans to create another system that would cater to the retirement and pension benefits of new recruits. A DND-AFP committee is due to submit a bill before the Congress to pave the way for the establishment of the new system. In a chance interview, Cruz said the deactivation of the RSBS would take effect December 31, which he said, had been given the go-signal by the Department of Finance and the Department of Budget and Management. Hopeless, bankrupt "The RSBS is a hopeless case. It’s bankrupt," Cruz told reporters. "But there is no reason to panic…the soldiers’ contributions will be returned to them upon their retirement." Cruz said a US-based firm would be conducting an audit of the RSBS, whose bad investments in real estate in the late 1990s began taking its toll on the institution. Cruz, however, did not identify the US firm. Apart from the bad investments, there were also reports that RSBS was having a liquidity problem due to unpaid loans and misuse of its assets that saw a number of its past officials being charged before the antigraft court Sandiganbayan. At least two cases are pending before the Sandiganbayan: one against former Armed Forces chief Gen. Lisandro Abadia and eight RSBS executives for the approval of an alleged anomalous P277 million loan. Another case, involving RSBS president Jose Ramiscal, a retired general, and three others are also facing charges before Sandiganbayan for the purchase of 148 parcels of land worth P167.6 million. In the latter part of 2004, then AFP chief Gen. Narciso Abaya ordered the shutting down of five RSBS subsidiaries - RSBS Enterprise Inc., Globan Fruits and Development Corp., Goodfit Manufacturing Corp., CEMX Inc., and RSBS Land Inc – to avoid further losses. A civilian-run agency that would replace the functions of RSBS is being planned, although Cruz refused to elaborate on specific details. Defense, military and RSBS officials have expressed fears for the past several years that the financial institution may not be able to sustain the payment of pension benefits of military retirees. -GMANews.TV