The current pension system for military and uniformed personnel has to undergo reforms as allowing it to continue will become burdensome for taxpayers, Department of National Defense Secretary Delfin Lorenzana said on Monday.
“The current MUP pension system that is being subsidized by the government will become unsustainable in the near future as it will become a huge burden to our taxpayers,” Lorenzana said in a statement.
He added that revisiting the pension system should have the objective of generating and maintaining a self-sustaining fund that would totally or partially unburden the government financially.
“As of today, the proposed MUP pension reform is still being discussed in Congress. A careful study of our fiscal situation, gathering of suggestions from concerned stakeholders especially in our Armed Forces, and further deliberations will be undertaken and considered to fine-tune the proposed bill,” he added.
Lorenzana added that the welfare of MUP retirees is their utmost priority in talking with lawmakers regarding the matter.
Last week, the House Ad hoc Committee on the MUP Pension System approved the unnumbered substitute bill after significant issues were resolved among the committee members and with the military and uniformed services branches.
Albay Rep. Joey Salceda, committee chair, said among the key revisions in the bill include the addition of disability benefits in the authorized insurance system and the creation of a provident fund to be infused with voluntary contributions from MUPs.
The disability benefits shall be created under the risk insurance system to enhance the benefits package for MUPs who incur disabilities in the line of duty
Salceda also said law enforcement agencies such as the Philippine Drug Enforcement Agency should be included in the definition of uniformed services.
Senator Christopher “Bong” Go also backed the reforms, adding that there is a need to balance the welfare of military and other uniformed personnel, and their dependents, while addressing the possible adverse financial impact of the military pension system based on current projections.
Go’s version of the proposed pension reform law for military and other uniformed personnel, as indicated in Senate Bill No. 1419 which he filed in 2020, seeks to attain fiscal stability and sustainability of their pension system without prejudice to current pensioners and those in active service.
In his 2017 budget message, President Rodrigo Duterte said that the pension reform should be pursued “in view of the ballooning budget burden where the total cost of the pensions of retired soldiers will exceed the compensation of those in active service.”
Around P800 billion is needed annually for the next 20 years to pay the pension of the military and uniformed personnel (MUP), according to the Government Service Insurance System (GSIS), based on the existing scheme.
Go emphasized that his proposed measure aims to only affect new entrants and not those in active service or those who have already retired.