Albay Rep. Joey Sarte Salceda, chair of the House Committee on Ways and Means on Tuesday said that his committee “accepts the proposals of Secretary Teodoro on the substitute bill to the Military and Uniformed Personnel (MUP) pension reform.”
Salceda added that “since the Committee already terminated proceedings, we will introduce this as amendments to the floor instead.”
Salceda gave the statement during Tuesday’s committee meeting. “As Chair of the Ad Hoc Committee, I would like to assure the Secretary that his requests are acceptable. We will adopt the Teodoro proposal of indexation for all retired and retireables and a
transitioned contribution scheme.”
“My job is to get a bill that will work fiscally, but is also acceptable to all stakeholders. So, of course, if Secretary Teodoro has major concerns, part of my job is to accommodate. Not without DOF concerns, of course, but that’s for them to settle in the Cabinet.”
According to Salceda, “the proposal will add some P1.2 trillion more to the actuarial reserve deficiency, from the current P2.2 trillion under the current substitute bill.”
“Only new entrants will contribute the 9 percent with government counterpart of 12 percent. And I will heed the request for full indexation for those who are retired and due for retirement,” Salceda added.
Salceda was quick to say however, that “we are still clarifying with the DOF and the DND exactly what the request is, because we are hearing clarifications that they just want to ensure that those who have given 20 years of service or more will not pay contributions or be subject to lower indexation. Our initial impression from the statement is that they don’t want anybody from the active service to pay any contribution or to give up any amount of indexation.”
“I would also like to remind all stakeholders that the aim of fiscal sustainability is to ensure that the pension system is substantially preserved in a way that can still be guaranteed by the State. In other words, a reform that is not too expensive, but also not too disruptive.”
Salceda added that “there could be some pushback from the DOF and the economic managers on the Teodoro proposal. So, we hope that within the
executive, they will sort their position out.”
“I need a figure that still allows me to protect the reform’s three guarantees: Guaranteed salary increase, guaranteed pension increase,
and guaranteed funding source. So, moving forward, any additional proposals should bear the costs in mind,” Salceda added.