Pension reforms should have no impact on MUP – Marcos

MANILA, Philippines — President Marcos called on lawmakers yesterday to ensure that members of the uniformed services would not be affected by the reforms in their pension system.

During his second State of the Nation Address, Marcos said efforts are underway to make the military and other uniformed personnel (MUP) pension system fully functional and financially sustainable, and gave assurance that the government is “inclusive” in its pursuit of social protection.

“The pension of the military and the uniformed personnel is as important, as urgent and as humanitarian as that of all other civilian Filipino employees,” Marcos said. “We are once again working closely with Congress to ease the transition from the old system to the new one, so as to be able to guarantee that no effects are felt by those in the uniformed services.”

The bill seeking to reform the pension system of members of the uniformed services was one of the priority measures Marcos mentioned in his speech.

The finance department has said the pension reforms would prevent a “fiscal collapse” caused by increasing pension costs.

Among the changes being proposed by the agency are the scrapping of a system where a retired uniformed personnel’s pension is automatically indexed to the salary of the active personnel of the same rank, and mandatory contributions for active personnel and new entrants.

The defense department recently disclosed that about 70 to 80 percent of enlisted military personnel might retire early because of proposed amendments in their pension scheme.

According to the agency, some soldiers are worried that the proposed changes might affect their retirement and are therefore seeking to avail themselves of the pension under the present system.

Philippine National Police (PNP) chief Gen. Benjamin Acorda Jr. is confident Marcos would consider the sentiments of a majority of the police force in the proposals to reform the MUP pension system.

The Department of National Defense (DND) is now looking at selling its disposable lands or properties to generate enough money to finance a retirement trust fund for military personnel.

It is also looking at utilizing part of the annual contributions of the Bases Conversion and Development Authority (BCDA) as another source to further ensure enough capital.

“We will be clearing all RSBS (Retirement and Separation Benefits System) properties, all the disposable properties of the Armed Forces of the Philippines (AFP) so we could include this in the fund,” Defense Secretary Gilbert Teodoro said in Filipino in a July 20 interview in Camp Aguinaldo. “We are also looking at the BCDA share the AFP receives yearly to put into the retirement fund, trust fund.”

Teodoro, whose first marching order was to fix the pension system for military personnel when President Marcos appointed him as DND chief last month, said the most important thing to do first is to ensure enough funds.

He noted that all the talks on contributions, net take home pay, net pensions and others are useless if a new system is not put in place.

“We are considering a structure similar to PERA (Personal Equity and Retirement Account) Law. It will have a trust fund custodian and trust fund administrator to avoid conflict of interest,” Teodoro said. — Emmanuel Tupas