Defense execs debate on reduction of AFP retirement age

MANILA, Philippines - Defense officials tasked to craft measures to reform the military’s retirement system are debating over a proposal to raise soldiers’ compulsory retirement age to 58 from 56, with some of them believing this is not necessary.

Defense department spokesman Eduardo Batac said the proposal would be subject to discussions before they decide whether it would be part of the draft to be submitted to Congress.

“We are still discussing some things. For example, is it necessary to raise the retirement age to 58 instead of 56? That is a big question mark because you are delving into previous retirement laws already. Some believe there might be no necessity to even touch that,” Batac said in a recent interview.

He said his department has no official stand yet on the proposal as the consultations on the retirement system are still ongoing.

“There is no official (stand) on that (proposal to raise retirement age). What I’m saying is these are items which are still going through a lot of debate,” Batac said.

He said all affected parties would be consulted before the proposed reforms are finalized.

Earlier, the armed forces’ Retirement and Separation Benefits System (RSBS) proposed that the military’s compulsory retirement age be raised to 58 from 56 to reduce the government’s pension arrears.

The RSBS said such reform is necessary amid concerns that the government may be spending too much on pension benefits.

The proposal to raise the retirement age is part of a draft proposal that seeks to amend Presidential Decree 1638, a retirement law enacted in 1979.

Presidential Decree 1638 states that upon attaining the age of 56 or upon accumulation of 30 years of active service, whichever is later, an officer or enlisted personnel shall be compulsorily retired.

Under the proposal of RSBS, the compulsory retirement age would be 58 while the accumulated years of active service for officers would be 36. RSBS said raising the compulsory retirement age would mean less pension requirements for the government since the soldiers’ length of service would be prolonged.

The RSBS proposal also stated that soldiers should have served at least 25 years in service before they could retire instead of the current 20 years. The provision would only apply to incoming soldiers and not to those already in service. 

Batac said the proposal to prolong the soldiers’ length of service to 25 years is also being discussed thoroughly.

“There are still a lot of discussions even on the proposal to raise the length of service to 25 years,” he said.

Batac said officials studying reforms to the pension system seem amenable to the removal of the “indexation” provision of the retirement law, which raises the retirees’ benefits whenever the salaries of active soldiers are upgraded.

He said the indexation provision has resulted in the ballooning of the government’s pension obligations.

“Our emphasis now is to address the continuing ballooning of the allocation of the national government for pension benefits. We need to arrest that,” Batac said.

“Anything that will tend to contribute to the growth of required allocation for pension benefits should be toned down or it can be totally avoided,” he added.