MANILA, Philippines – The Department of National Defense (DND) on Monday said it will conduct a study and further deliberations to fine-tune the proposed measure seeking to reform the pension system for the military and uniformed personnel (MUP).
In a statement, Defense Secretary Delfin Lorenzana said the current MUP pension system being subsidized by the government will become “unsustainable in the near future as it will become a huge burden to our taxpayers.”
“It is time to revisit the pension system with the objective of generating and maintaining a self-sustaining fund that would totally or partially unburden the government financially,” Lorenzana said.
“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.
The Defense chief said that looking after the welfare of Filipino soldiers is one of the DND’s key mandates, and that these include ensuring that they receive the appropriate retirement benefits that are due them for their years of honorable and dedicated service.
“Sinisiguro namin na pangunahin sa ating prayoridad sa ating pakikipag-usap sa mga mambabatas ay ang kapakanan ng ating mga retirees,” Lorenzana said.
The proposed MUP pension reform bill is still pending in Congress.
The House ad hoc committee on military and uniformed personnel pension system recently approved the amended substitute bill proposing reforms for the said pension system.
The proposed measure seeks to remove the automatic indexation system that pegs the amount of pension received by retirees to the current salaries of active personnel.
The bill also includes a provision of cost-of-living adjustment (COLA) to ensure that monthly pensions remain on track with changes in prices and the adjustment of pensionable age to 60 years old.
The measure likewise proposes to provide higher risk insurance coverage for wounded, injured, and killed in action (on top of legislated benefits), optional retirement after 20 years but eligible only for non-pension benefits; pension eligibility begins at 60, among others.
House panel chair Albay Rep. Joey Salceda earlier warned that the MUP pension system could face an “existential threat” unless reforms are implemented due to unfunded reserve deficit amounting to P9.6 trillion.