Retired military and police generals said the welfare of all stakeholders who will be affected by the proposed reform in the pension of retired military and uniformed personnel or MUP must be considered as high-level consultations have been set today.
“I’m sure all factors and the welfare of all concerned sectors will be duly considered,” said Ret. Gen. Alexander Yano, a former chief of staff of the Armed Forces of the Philippines in an interview with ABS-CBN.
“There will be a discussion on this. I don’t want to preempt the dialog. I am confident that our superiors will ensure that existing rights will be protected.” said Ret. Gen Wilben Mayor, former spokesperson of the Philippine National Police and currently presidential assistant at the Office of the Presidential Adviser on Peace, Reconciliation and Unity.
AFP spokesman Col. Medel Aguilar declined to give a comment, saying they will issue a statement after the meeting.
“We will be ready for the consultation,” Aguilar said.
Finance Secretary Benjamin Diokno said there is a need for a separate retirement and pension fund for MUP, saying the current pension system was a “big drain to the national budget.”
Diokno said the government will likely spend P848.39 billion annually for the next 20 years to finance the current pension system.
He said the accumulating pension liabilities will likely increase public debt by as much as 25 percent by 2030.
The Bureau of the Treasury estimates that the level of total unfunded pension liabilities is P9.6 trillion. This is around half of GDP in 2022.
“We can no longer afford to keep this around,” said Diokno.
“They (soldiers) don’t have any contributions, and they enjoy large payouts. I think this really has to be discussed openly,” he said.
Diokno said a retired general would receive a monthly pension of P131,000, tax-free.
“We are determined to come up with a reasonable proposal in
consultation with the concerned agencies and stakeholders. (Defense) Secretary (Carlito) Galvez, (Interior) Secretary (Benhur) Abalos, representatives from the Office of the President, the Department of Budget and Management, and I will meet to finetune the proposal and address the current issues of all involved,” he said in a briefing late Friday afternoon.
“Open dialog will be key to coming up with a reasonable solution to this monumental problem and providing a level of predictability for current and future MUP pensioners,” Diokno added.
MUP covers personnel from the Armed Forces of the Philippines, Bureau of Fire Protection, Bureau of Jail Management and Penology, Philippine Coast Guard, the Philippine Public Safety College, the Bureau of Corrections, and the Philippine National Police.
Earlier, Diokno said the pension reform includes a new policy that will cover all active personnel and new entrants, meaning mandatory contributions begin with those currently or about to enter service.
The reform seeks the removal of automatic indexation of pension to the salary of active personnel of similar ranks. This means pensions will no longer increase according to the salary increases of active personnel.
Also, military uniformed personnel will receive their pensions at the age of 57. The current policy allows them to receive their pensions at 56, the mandatory retirement age.
The percentage of the mandatory contribution will be staggered over a uniformed personnel’s years of service – from 5 percent in their first three years, to eventually 9 perce