Amid grumbling over a government plan to cut military pensions, Defense Secretary Gilberto Teodoro Jr. said Thursday that non-monetary benefits that soldiers and their families get would entice them to stay longer and wait for their mandatory retirement from the service.
Teodoro was addressing concerns that military personnel would opt for early retirement before the new pension plans for military and uniformed personnel (MUP) are put into place.
But in a press briefing, Teodoro said non-monetary benefits such as health care and skills upgrading initiatives in the Armed Forces of the Philippines (AFP) would serve as a prime consideration for enlisted personnel not to retire early.
“I mean, it’s a matter of getting an amount now, without the continuing non-monetary benefits that you will enjoy in your career path,” Teodoro said.
Teodoro, appointed only this week, has been tasked by President Ferdinand Marcos Jr. to push “reforms” in the MUP pension system to make it self-sustaining. This would entail reducing pension payments.
“So, I think it’s a matter of explaining the necessity of introducing [the reforms],” Teodor said. “In my opinion, since I also come from the financial sector, it won’t happen suddenly. It will just reduce the bleeding that should happen. It is our government’s responsibility [to cover pension payments] until this system is self-sustaining.”
In March, the President approved a “game-changing” MUP pension reform pushed by Finance Secretary Benjamin Diokno, aimed at fixing the pension system and addressing future fiscal uncertainty.
As other costs go up, Diokno said, there will come a time when the current budget will only be about a third or one-fourth of the money that the government is paying for the pensioners.
“We have to really address that issue. It’s not sustainable,” he said.
Diokno said the pension being received by a military pensioner is nine times higher than the average pension of a pensioner under the Social Security System (SSS), and three times higher than the average pension under the Government Service Insurance System (GSIS).
The Finance chief said the proposals for the pension reform include application of the reform to all active personnel and new entrants, removal of automatic indexation of pension to the salary of active personnel of single ranks, and mandatory contributions to be required for active personnel and new entrants similar to the GSIS pensioners.
Senate Defense committee chairperson Senator Jinggoy Estrada on Thursday said he would work closely with Teodoro on the MUP pension system.
At the same briefing, Teodoro said he would not review the terminated agreement between the University of the Philippines and the DND that bans military and police personnel from entering the campus.
That agreement was unilaterally terminated in 2021 by the DND when Delfin Lorenzana was Defense chief.
“That has been the policy already done by my predecessor and I don’t want to reverse the policy,” Teodoro, an alumnus of UP, said.
“But that does not mean to say that I am not mindful of the autonomy of the University of the Philippines. And I urge everybody to be respectful of that without need of any [memorandum of agreement],” he added.
The UP-DND accord was signed on June 30, 1989 and provided guidelines on the conduct of police and military operations so that untoward incidents would not happen inside the UP campus.
The accord provided that the military and police were prohibited from entering the premises of any UP campus or its regional units without prior notice to the UP administration.
Teodoro said he has yet to consult with the President regarding the administration’s stand on the proposed resumption of peace talks with the communist rebels.
He said, however, that he personally does not believe talks should be resumed.