MANILA, Philippines — The Department of Finance (DOF) will hold a dialogue with military and uniformed personnel (MUP) to properly explain the reform it is pushing for their pension system amid calls to limit coverage.
In a briefing, Finance Undersecretary and spokesperson Maria Luwalhati Dorotan-Tiuseco said the DOF would conduct roadshows to dialogue with MUP units on the proposed pension system reform.
“We will be conducting roadshows, so we promised AFP (Armed Forces of the Philippines) and other sections that we will be talking to the soldiers themselves and all the stakeholders,” Dorotan Tiuseco said.
“We have to talk to the units to find a compromise and work with the reforms. We just want to discuss each and every item based on the four reforms that need to be discussed,” she said.
This comes after a recent Senate hearing where MUP expressed their willingness to reform the system, but also called for a middleground moving forward.
As such, the general proposition of the MUP is for the key reforms to only be applied to new entrants contrary to the proposal of the DOF that this be imposed to both.
It should be noted that the current MUP pension system is non-contributory and, as such, retirement pensions and benefits are fully funded by the government through annual appropriations.
The current MUP pension system covers retirees from the AFP, Bureau of Jail Management and Penology, Bureau of Fire Protection, Philippine National Police, Philippine Public Safety College, Philippine Coast Guard and the Bureau of Corrections.
But DOF Secretary Benjamin Diokno is not amenable to limiting the MUP reform to new entrants only given its little impact in overhauling the system.
“If it’s just the new entrants, there will be no impact in addressing our ballooning debt because there are just a few of them (compared to those in active service). It will take forever to resolve that issue and by that time, it will have exploded already,” Diokno said.
“The solution really is to cover all the segments. Those in active service and new entrants should contribute. That is our position,” he said.
Dorotan-Tiuseco noted that concerned agencies would have their first technical working group (TWG) discussion today where all the MUP services are expected to attend to iron out the proposal.
Dorotan-Tiuseco said a new version of the bill would be crafted where all MUP and stakeholders concerned would be involved.
The DOF is also requesting all MUP agencies to submit their updated numbers in terms of those retired and in active service.
Apart from the reform to be applied to active personnel and new entrants, the MUP reform also aims to adjust pension benefits by up to 1.5 percent within a given year, subject to evaluation of economic conditions and actuarial life of the pension fund.
The DOF is also proposing that MUP will start receiving their monthly pension at the age of 57. Currently, MUP have the option to avail themselves of early retirement after at least 20 years of service.