Senator Imee Marcos has stressed the urgency of replacing a deactivated pension fund for military and uniformed personnel (MUPs) whose salary contributions used to earn at a higher interest rate than most banks can offer.

Marcos, who chairs the Senate committee on economic affairs, pointed out that no pension fund has yet replaced the Retirement and Separation Benefits System (RSBS) which stopped collecting member contributions since its shutdown in 2016 due to gross mismanagement.

“For the past five years, old and newly recruited MUPs could have made more contributions and earned more interest if a new pension fund was promptly set up. The longer we wait to replace RSBS, the more we deprive our MUPs and their families of earnings they could have already accumulated,” Marcos said.

To establish a new pension fund, Marcos urged caretakers of the RSBS to liquidate all its assets as soon as possible, citing that it already missed its goal to do so in April, based on the five-year timeline set after its deactivation.

“Besides speeding up the reimbursement of all member contributions, the revenue from liquidated assets can be used to seed a new self-sustaining fund, independent of the national budget – which RSBS failed to be,” Marcos said.

Only member contributions are being refunded by the RSBS to about 130,000 MUPs, with a completion goal in 2022.

“Payouts of retirement and separation benefits are being covered by allocations in the national budget, but these are increasing each year due to salary hikes and the indexation of benefits,” Marcos explained.

“RSBS interest payments also keep growing, in effect depleting the retained resources of GOCCs (government-operated and -controlled corporations),” Marcos added.

Marcos has been calling for an inquiry by the Senate committee on national defense and security to clarify the financial status of RSBS and its ability to reimburse members’ contributions.

Although RSBS has said it remains debt-free and far from bankruptcy, Marcos cited findings by the Commission on Audit (COA) that the pension fund had overstated its total assets by Php2.54 billion and Php2.63 billion in the two years prior to its deactivation.

The COA also found discrepancies in RSBS statements on membership contributions in 2017 and 2018, with unreconciled balances of Php10.24 billion and Php9.26 billion, respectively.