Cruz said their contribution will be returned, including interest, when they retire from service since the funds under the RSBS will be placed under a trust account at the Land Bank of the Philippines (LBP).
In an interview in the weekly radio program "Para Sa Iyo… Bayan" of Vice President Noli De Castro, Cruz gave the assurance that the five percent monthly contributions made by the soldiers with six percent interest will be returned in full payment.
He said government decided to deactivate the RSBS and liquidate its remaining P11.6-billion worth of net value assets because the pension fund can no longer sustain its close to P400-million annual expenses.
Created in 1973, the RSBS has collected mandatory contributions from military personnel but it has been remiss in paying pension benefits due to funding problems.
The assets of the RSBS, which stood at P15 billion in 1998, steadily dropped in value due to bad investments.
The RSBS was later declared bankrupt by the AFP top brass and will cease operations by Dec. 31 this year.
Cruz added the World Bank (WB) recommended to the Department of Finance the closure of the RSBS following the financial audit of the military pension fund from 1998 to 2003.
"It is a difficult decision we have to make to stop the bleeding of RSBS. It was clear in its financial report that we have to deactivate and reprogram its liquidation assets. We are not abolishing RSBS. We are (only) deactivating it by closing (its) operations," he said.
He said the Development Bank of the Philippines (DBP) and LBP were contracted to auction the assets of the RSBS, mostly in real estate, through a public bidding.
Cruz added the Senate had earlier recommended the deactivation of RSBS and liquidation of its assets, following the report made by the Senate Blue Ribbon Committee in 1998.
Cruz called on Congress to draft legislation authorizing the creation of a new pension fund to replace RSBS.
"We (are proposing to Congress to) draft legislation to create a new pension fund for the soldiers, where our soldiers will make a nine percent contribution and a 12 percent counterpart fund," he said.
Malacañang has assured the continuance of the benefits of the soldiers, notwithstanding the impending closure of the military’s pension fund.
Executive Secretary Eduardo Ermita said the new body that will replace the RSBS will be patterned after the Government Service Insurance System (GSIS), which will look after the welfare and the retirement funds of all personnel of the Armed Forces.
Ermita also assured affected military personnel that the government will continue to pursue charges against the retired officials who led the RSBS to bankruptcy due to corruption and mismanagement.
Employees of the RSBS, on the other hand, decried allegations that they unwillingly contributed to the eventual dissolution of the pension fund.
In a general meeting last Friday where they were officially informed of the dissolution of RSBS, the employees became emotional over reports that their superiors are getting fat salaries and benefits.
"The truth of the matter here is that we are getting salaries based on government rates, because RSBS is now a government entity," one employee said.
They also pointed out the announcement made by Cruz last week of the dissolution of RSBS subjected them to harassment by some soldier-beneficiaries. — With Jaime Laude, Dave Oscar