Sunday, February 21, 2016

Pension system for military eyed

From the Philippine Daily Inquirer (Feb 21): Pension system for military eyed

The Aquino administration might just propose a legislative measure creating a pension system for the military, such that their pensions would not be taken from the national budget, according to Budget  Secretary Butch Abad.

Abad said military personnel do not contribute to the Government Service Insurance System (GSIS), the pension fund of civilian employees of the government which pays their pensions on their retirement.

“The decision of the President and the Cabinet is, let us propose a law so that they (soldiers) can have a pension system,” Abad said in a phone interview.

The idea to propose a law came about after the issue of the “indexation” of the pensions of retired military personnel resulted in Congress failing to pass the Salary Standardization Law (SSL) to increase the wages of 1.5 million government employees.

The House had removed from the SSL the provision on “indexation,” or the pegging of pensions of retired uniformed personnel to current salaries, resulting in Congress failing to approve the bill.

As a result, President Aquino signed Executive Order No. 201 that allowed an increase in civilian government employees’ compensation in four tranches.

EO NO. 201 does not provide for indexation, and states that the uniformed personnel like the military and police will not receive an increase in their basic salaries but  will receive an increase in hazard pay, provisional allowance and officers’ allowance.

Abad said increasing the pension of military retirees, based on the base pay of their counterparts in the active service, would entail a huge amount. “We cannot afford it,” he said.

Abad added that, in fact, a soldier may receive three pensions upon retirement: Their regular pension; a pension received once they reach 65 years and are considered veterans; and a temporary administrative staff disability pension when they reach 80 years.

According to Abad, Muntinlupa Rep. Rodolfo Biazon, a former Armed Forces of the Philippines chief, is one retired soldier who receives three pensions, having turned 80 last year.

“Representative Biazon concedes this—he is retired, he gets P80,000 monthly with the past indexation applied. If the indexation is applied now (with EO 201), after four tranches he would be receiving P195,000 a month,” he said.

Abad said that 67 percent of the total pension being paid out by the government to military retirees were now actually given to their survivors, “no longer the original pensioner.”

The position of the Department of Budget and Management is that the indexation provision would require ballooning and unsustainable fund allotments from the government.

Over the past 13 years, the government has accumulated P18 billion in unpaid pension adjustments to military officers based on a decree issued by the late dictator Ferdinand Marcos mandating a pension hike for retired military personnel at par with the pay hike of active soldiers.

The government did not allocate funds for the pension increase starting in 2002. The Commission on Audit issued a ruling in May last year ordering the payment of pension arrears.

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