DND asks Senate to find compromise in proposed MUP pension system
The Department of National Defense (DND) asked the Senate on Monday to find a compromise in the proposed military uniformed personnel (MUP) pension system.
During a Senate hearing, DND officer-in-charge Carlito Galvez, Jr. said the proposed MUP pension system is affecting morale of troops and policemen.
“While we fully support the enactment of legislative measures to address the current issues hounding the pension system, the DND and the AFP (Armed Forces of the Philippines) respectfully appeal that the morale and welfare of our soldiers be given due weight in this deliberation. Considering that the mere notion of modernizing our pension system created already some sort of apprehension,” Galvez said.
“At present, discussions mostly relating to retirement benefits, especially the imposition of the pensionable age has already affected the morale and uneasiness not only from within the active ranks of the Armed Forces but also from our veterans and retirees,” he added.
According to Galvez, President Ferdinand Marcos, Jr. had ordered a continuous discussion on finding a “common ground” in relation to the MUP pension system.
“In fact, the President also gave instruction that he is very much concerned about the impact of the MUP on the morale and welfare of our personnel and policemen and he wanted that there should be a continuous discussion to have a common ground,” he said.
Galvez told lawmakers that around 70 to 80 percent of eligible personnel of the AFP are planning to avail of early retirement as they feel uneasy about the proposals included in the pension reform.
These include the removal of automatic indexation, the compulsory contribution of soldiers to their pension, and the reduction of the amount of their lump sum.
The present pension system gives a lump sum to retired soldiers of up to 36 months, but the new system decreases it to 18 months.
“If this is still financially impossible, we are very amenable and open to modifications in the system so long as these are fair and equitable to the military and the MUP and also this is based on the financial soundness and scientific actuarial science,” he said.
Budget Secretary Benjamin Diokno earlier said this month said the current MUP pension system was not sustainable and could increase debt by 25 percent by 2030.
For her part, National Treasurer Rosalia de Leon said that the present MUP pension system is prone to economic downturns.
“The threat that the government will be unable to meet its pension commitments or improve the country’s defense posture is real. We are already spending more on pension liabilities than on keeping our military and uniformed services safe, competent, and in fighting shape,” De Leon said.
“Pension benefits and increases are unpredictable. Dependence on full government funding makes the pension system susceptible to economic and fiscal downturns, which creates an unstable and unreliable benefit system for MUP and their dependents,” she added.
She said the unfunded liabilities of the MUP pension amount to about P9.6 trillion or 53.4 percent of the country’s 2020 gross domestic product. Jaspearl Tan/DMS
