Finance Secretary Ralph Recto said he supports a Senate bill which seeks to impose a mandatory contribution to new entrants only in the Armed Forces of the Philippines and other uniformed services.
“My personal stand is the same as the position now in the Senate,”Recto said of the bill seeking to reform the military and uniformed personnel (MUP) pension system pending before the Upper Chamber.
Under Senate Bill 2501 sponsored by Senator Jinggoy Estrada, only new entrants in the country’s military and uniformed services will have pension deductions in their monthly pay.
For those who will enter the service after the enactment of the bill, the mandatory contribution will be seven percent of their base pay and longevity pay.
The government, on the other hand, will have a 14 percent contribution. The rest of those in the uniformed services will contribute 9 percent, while the government will provide a 12 percent contribution to their pension funds.
Once in place, the retirement pay will be increased to a maximum of 90 percent of the base pay and longevity pay for all MUP, from the current 75 percent to 85 percent.
“The government has a social contract with our MUPs. Based on that, we promised them a certain pension. So, I think [the] government should respect that. And I think the Senate Bill respects that,” Recto said.
Recto said idle government assets could also be developed to partially fund the MUP’s pension.
“There might be an opportunity that certain government assets or assets owned by the Armed Forces of the Philippines could be used to pay for the pension partially. At the same time, maybe those assets are idle, and government can, together with the private sector, can develop these assets,” he said.
“So, you hit two birds with one stone there. You’re able to use those assets to pay the pension at the same time they’re idle. We can create more value in these assets as well. So that’s how I’m looking at it,” he added.
Under the Senate bill, a trust fund will be established for the Armed Forces of the Philippines and another for uniformed services, both will be managed by the Government Service Insurance System (GSIS).
The measure sets the retirement age for uniformed services at 57 years old.
In September, the House of Representatives approved on third and final reading its version of the bill reforming the MUP pension system. With Vince Lopez