THE Department of Finance (DoF) said current military and uniformed personnel (MUP) will retain the same retirement benefits after their pension system is reformed.
“We’re not reducing the pension or changing the benefits. In our latest proposal, there’s no changes made to the pension. In fact, for the military, we are even raising it. Now, the maximum pension they can get is 85% of their base pay and (long-service) pay. We are making this 90%,” Finance Undersecretary Cielo D. Magno said at the Pandesal Forum on Thursday.
The bill proposing reform to the MUP pension system was recently approved by a House ad hoc committee and is currently up for debate at plenary level.
The MUP pension reform bill is on the Legislative-Executive Development Advisory Council (LEDAC) list of priority measures targeted for approval by Congress by the end of the year.
“The benefits they get from retirement are still the same. We aren’t changing that. It’s important to clarify this,” she added, though the reforms will allow active-duty personnel to contribute more to their pensions going forward.
Ms. Magno also noted that the proposed reforms do not impact the pensions of retired MUPs.
“If you’re retired, don’t worry. We agree that we will keep the indexation for the retired,” she said, referring to retiree payouts indexed against active-duty pay. “That’s their vested right and we don’t want to reduce their vested right,” she added.
Last week, Albay Rep. Jose Maria Clemente S. Salceda, who also chairs the ad hoc committee, announced that the House will introduce Defense Secretary Gilberto C. Teodoro’s proposals to the bill as floor amendments.
Mr. Teodoro’s proposals seek the full indexation of pensions to the salaries of active-duty personnel. Mr. Teodoro also expressed concerns over the mandatory contributions to be required under the proposed bill.
Finance Secretary Benjamin E. Diokno has expressed concern about indexation for current active-duty personnel and new entrants.
“The pensioners and the active-duty personnel have different needs. It is therefore necessary to ensure that the pension and wages have different bases for adjustment. Removing automatic indexation… gives us flexibility to respond to the unique needs of the pensioners and the active-duty personnel,” Mr. Diokno has said.
Under the current system, funding for the pensions is drawn from the annual budget.
“The pension has to be sustainable, not because we want to reduce the budget earmarked by the government for pensions, but we want to make sure that when they retire, we have money to fund their pensions,” Ms. Magno said.
She also noted that failure to reform the pension system would hinder the government’s capacity to modernize the military and respond to its needs. — Luisa Maria Jacinta C. Jocson
