Govt. reforms military, uniformed personnel pension plan

From the Mindanao Examiner (Apr 7, 2023): Govt. reforms military, uniformed personnel pension plan

THE GOVERNMENT HAS approved what it called a “game-changing” pension plan for military and uniformed personnel aimed at fixing the pension system and addressing future fiscal uncertainty, according to Finance Secretary Benjamin Diokno.

Diokno described the military and uniformed personnel pension reform as the “elephant in the room” or a major problem left untouched and ignored by President Ferdinand Marcos’ predecessors.

“So we want to reform them. And right now, the situation is so bleak, for example, that if you compare the current operating expenditures with maintenance and operating expenditures or maintenance and operating expenditures of the whole AFP (Armed Forces of the Philippines) and the capital outlays so the money they buy for airplanes, etc., etc., it is actually much less than the amount of pension that we are allocating for the retirees,” Diokno explained.

“So there will come a time when the current budget will only be about a third, one-third, or one-fourth of the money that we’re paying for the pensioners. So we have to really address that issue. It’s not sustainable,” he added.

He said the pension being received by a military pensioner is nine times higher than the average pension of a pensioner under the Social Security System (SSS), and three times higher than the average pension under the Government Service Insurance System (GSIS).

During a recent meeting in Malacanang, Diokno said they spelled out four proposals for the pension reform, which were unanimously approved by other attendees.

These include application of the reform to all active personnel and new entrants, removal of automatic indexation of pension to the salary of active personnel of single ranks, and mandatory contributions to be required for active personnel and new entrants similar to the GSIS pensioners.

Diokno said he thinks Marcos is in the best position to push through with the reform.

“As I mentioned, his predecessors simply kick the can forward, right, without success. Why did I say that? Remember that he’s I think the first president who was elected by a significant majority, right, 60 percent. Iyong ibang president, they were only elected by 25 percent because of the number of candidates,” Diokno said.

“So, he really has this very strong support and he’s willing to spend his political capital for this because nakikita niya na kapag hindi niya ginawa ito there will be fiscal collapse in the future,” he added.

Diokno said Marcos also has a very strong control of both the Houses of Congress so it will be less problematic for him to push forward such a major reform.

To date, the military and uniformed personnel pension system is fully funded by the national government through annual appropriation with the retirees not paying any contribution. The unique kind of pension system, Diokno said, received an allocation of around P120 to P130 billion in the 2023 national budget. (Mindanao Examiner)

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