THE Department of Finance (DoF) said it is fine-tuning its proposal to reform military and uniformed personnel (MUP) pensions, with payouts to retirees now subject to annual review rather than escalating automatically under an indexation system.
The reformed pensions will also require MUPs to make contributions to their pension funds, the DoF said in a statement on Thursday.
“Our goal is to create a sustainable pension system for the military. We want to take care of soldiers from the day they enter service up to their retirement,” Finance Undersecretary Maria Cielo D. Magno said.
Under the current pension system, MUPs are automatically promoted one rank higher upon retirement and can receive their pension after 20 years’ service, with no minimum pensionable age. The monthly pension is also automatically indexed to the salary of active personnel.
The DoF has proposed that the MUP pension fund be managed by the Government Service Insurance System (GSIS), supervised by an oversight committee.
The committee will be composed of the Secretaries of Finance and Budget and Management, the Executive Secretary, and the President and General Manager of the GSIS as ex-officio members, as well as representatives from the MUP services.
Defense Secretary Gilberto C. Teodoro, Jr. also noted the need for “expert fund managers with good track records.”
The DoF has also proposed three options for claiming pension benefits, including a lump sum upon retirement, payment after five years, or upon reaching age 57.
The Bureau of the Treasury has reported that total unfunded pension liabilities have hit P9.6 trillion.
The DoF also estimates that accumulating pension liabilities will likely increase public debt by as much as 25% by 2030. — Luisa Maria Jacinta C. Jocson
