By Jaime Pilapil

The Government Service Insurance System is being tapped to administer the pension fund and retirement benefits of members of the Armed Forces, Defense Secretary Gilberto Teodoro said yesterday.

GSIS, which handles the pension benefits of non-military personnel of the government, is being considered as temporary replacement for the Armed Forces of the Philippines Retirement and Separation Benefits System, until Congress is able to create a new pension system, according to Teodoro.

President Arroyo two years ago ordered the suspension of the Armed Forces? pension fund, which floundered amid allegations of mismanagement and engaging in questionable ventures.

At least two officials and two former employees of the pension fund are facing charges of graft and corruption before the Sandiganbayan for the unauthorized release of P85 million.

At present, Tedodoro said the government is paying for the benefits and pensions of the soldiers and their beneficiaries through yearly appropriations.

A draft bill is now being prepared to dissolve the AFP-RSBS. And a system is being put in place to return the contributions of the members.

?It?s very difficult to conceive of a new retirement system,? Teodoro said. ?Establishing a new pension plan for the Armed Forces is more difficult to conceive and to envision.?

He said it is either the government put up a new corporation or allow GSIS to cater to the retirement benefits of the soldiers and their beneficiaries.

?There are several issues involved; for example, will the current members of the Armed Forces be paying for the future premium? You can have retirement benefits until you load up the retirement fund for how many years and make it grow. Is the government willing to put in capital contributions again for that pension??

?On the other hand,? Teodoro said, ?is the GSIS capable also of accepting AFP as members, given the different risk profile of the soldier and given the capital adequacy of the system?

AFP-Retirement and Separation Benefits System was created by Presidential Decree 61 to serve as a self-sustaining fund system from which the pension, separation and other benefits of the soldiers shall be taken.

As early as four years ago, reports came out that the fund was being used other than what it was intended for like investments in risky businesses.

The pension fund lost P3.3 billion even before 2004 due to mismanagement, insiders said.

A new body has been envisioned to replace the military?s pension fund but Congress failed to craft the enabling law, insiders said.