Before the establishment and activation of the AFP Pension and Gratuity Management Center (AFPPGMC) in 2005, an AFP Task Force on the Enhancement of Pension Administration (TF Pension) was created in 13 September 1999 with its chairman then CAPT. LEONARDO A CALDERON PN(GSC). Said Task Force created specifically, to conduct a comprehensive analysis on the present set-up of the AFP Pension System and to identify its weaknesses, limitations and to come-up with recommendations to somehow stop or deter negative findings and illegal activities at the soonest possible time. Prior to said initiative during that time, issues of ghost pensioners and illegal activities have plague the AFP pension system, allegations of corrupt pension practices became headlines on the media and national newspaper. These exposures brought negative impression on the AFP leadership and question the integrity of the pension payroll and AFP capability to manage the pension of retirees as well as safeguard the government pension funds. With the pressure mounting to eradicate alleged anomalies, another equally important issue which contributed to the urgency of the problem is the inconvenient service brought about by manual procedure of receiving monthly pension thru continuous-form-checks (CFC’s).

With the perennial problem and numerous challenges to improve the AFP Pension System members of the Task Force Pension conducted a thorough evaluation and diligently collated all data’s from simple to complicated matters. Conduct of process assessment and system weaknesses evaluation by the Task Force were carefully made to ensure that all information’s are all properly considered. Along with this process, a pension cleansing activity was undertaken and the results have validated most of the alleged reported anomalies.

One of the major contributions resulting to the said initiative is the effort made by the Task Force in the establishment of the pensioner’s database or the Pensioners Management Information System (PenMIS). Said innovations and secured process brought by computerization and digitization of records contributed in the cleansing of the pension payroll. Automation has greatly reduced cases of unauthorized disbursement and overpayment of pension. The Task Force has recommended a variety of internal control mechanism on various processes resulting in generating savings amounting to millions of pesos in favor of the government.

In fact, it was through these efforts that retirees on the FY-2001 to FY-2003 despite absence of budget appropriations, have continue to receive their respective monthly pensions. However, despite all these efforts managing and administering the multi-billion peso pension fund is still a challenge and perennial problem as evolving issues continues to hamper effort previously made. The complexities of managing the pension funds and harmonizing efforts of the different offices/units involved in the pension system pose a problem.

One of the major findings in the system evaluation of the Task Force which found to be a source of mismanagement and brought negative effect in terms of pension administration is the absence of a specific unit or office to manage and administer the pension system. This kind of set-up have encourage mediocrity and set aside responsibility in the managing the pension funds. Unlike other funds being administered by the AFP, pension fund is administered through collective efforts of the then O/J6, BCD-OTAG, and AFP finance center. O/J6 before re-organization and decentralization of its function was the then DCS for Comptrollership and was the designated program director for the pension funds. It is responsible in planning for the annual budgetary requirements for the AFP Pension. Benefits Claims Division (BCD) of OTAG meanwhile is the office involve in the processing and validating of benefit claims, and lastly the AFP Finance Center (AFPFC) was tasked to execute the disbursement and payment of pension.

Due to this set-up functional gaps are seen on the following areas; management of funds, monitoring of pensioners, and implementation of numerous laws which affects not only the benefits to be granted to the retirees but also the punitive aspect of the law. These gaps have made the AFP Pension System vulnerable to fraud and other anomalies involving not only AFP personnel but also the retirees themselves and their respective beneficiaries. With these situation, The Office of The Internal Audit, AFP in one of their meeting with TF Pension, recommended the creation of an office or unit to address the numerous administrative flaws, which the present organizational set-up cannot address. There is no specific unit or office that can be held liable for the non-payment or unauthorized payment of pension to a retiree or pensioner.

The then Task Force Pension after series of meetings and consultation with concerned units, recommended for the creation of the said responsible office for pension matters to be name as the AFP Pension and Gratuity Management Center (AFPPGMC). Said unit will be solely responsible in the management and administration of the AFP pension funds and the pensioners list. This unit shall fill-in the organizational and functional gaps that exist in the current system as presented by the Task Force. The proposed center will integrate the present pension administration functions of BCD-OTAG and AFP finance center to include other functions that are critical in pension administration. This unit shall be under the functional supervision of O/J1 and will have an oversight functions on all the pension and gratuity administration branches in the major services. The proposed Pension and Gratuity Management Center will be information technology-based that shall simplify the business processes of pension management yet instilling an effective auditing and monitoring system.

In view of the Task Force recommendation, by virtue of General Order’s number 1259, GHQ, AFP dated 17 October 2005, the Armed Forces of the Philippines Pension and Gratuity Management Center was activated effective 16 October 2005. From its humble beginning in 2005 until today, continuously, AFPPGMC is evolving to meet the demands of the changing environment as it stood the test of time and have provided pension services to all AFP pensioners including their loved-ones.

To provide administrative function in the processing of application of AFP Retirement and Separation benefit claims in accordance with the provisions of PD 1638, as amended and with other laws governing the retirement and separation benefits of the AFP.

To effectively and efficiently manage a credible pension and gratuity system that is technologically driven and progressively responsive to the needs of retiring and retired AFP personnel and their dependents.

1. Promulgate rules and regulations implementing the provisions of RA 340 and PD 1638 and other laws governing the retirement and separation benefits of AFP Personnel.

2. Systematically and expeditiously process and monitor all financial claims and payments made to a retired or separated AFP personnel and their legal beneficiary/ies in accordance with the provisions of pertinent retirement laws.

3. Establish, maintain and update the AFP Retired and Separated Military Personnel List and act as its custodian.

4. Periodically account and monitor the status of existing pensioners.

5. Assist AFP personnel due for retirement in the processing and approval of their application for retirement. Likewise, assist legitimate beneficiaries for the prompt transfer of pension to them.

6. Prepare financial and budgetary requirements for the administration and payment of pension for AFP Retirees and their legitimate beneficiary/ies.

7. Investigate and file appropriate charges against persons violating the provisions of RA 340, PD 1638 and other pertinent laws pertaining to retirement and separation of AFP personnel.

8. Provide higher headquarters with timely and accurate reports necessary for decision-making in support of executive policy formulation.