Marcos eyeing self-regenerating pension system

MANILA, Philippines — The government is aiming for a “self-regenerating” pension system for the military and the police, President Marcos said, days after the defense department revealed that as many as 80 percent of enlisted military personnel may retire early due to proposals to reform the present pension scheme.

Speaking to reporters in Pagudpud, Ilocos Norte last Friday, Marcos said a self-sustaining pension plan for members of the uniformed services is needed to prevent a scenario where there would be no more funds allocated for their pensions.

“We are still in the midst of putting together the pension plans so it would be self-regenerating,” Marcos said.

Marcos predicted that the government’s pension funds would be depleted in the next five to six years if the present system continues.

“So while it is not happening, we are preempting it. We are designing a better system,” he added.

Last March, Finance Secretary Benjamin Diokno said the Marcos administration would push for the passage of a bill amending the pension system of soldiers and other uniformed personnel to prevent a “fiscal collapse” caused by higher pension costs.

According to Diokno, the pension of the military, police and personnel from the Bureau of Jail Management and Penology, Bureau of Fire Protection, Philippine Public Safety College, Philippine Coast Guard and Bureau of Corrections is fully funded by the government.

Under the present system, the uniformed personnels’ pension is automatically indexed to the salary of the active personnel of the same rank.

Because of the automatic indexation, a retiree’s pension increases once the salary of an active personnel with the same rank increases. The pension of a retired member of the uniformed services is also computed based on the payment of those with rank that is one step higher than the rank they last held. Diokno noted that the current operating expenditures and outlays of the Armed Forces of the Philippines (AFP) is much less than the amount of pension allocated for retirees.

To address the issue, the government is calling for reforms in the pension system, including the scrapping of the automatic indexation of pension to the salary of active personnel of single ranks and the adjustment of the retirement age from 56 to 57.

Earlier this month, defense department officer-in-charge Undersecretary Carlito Galvez Jr. said about 70 percent to 80 percent of enlisted military personnel may avail of optional retirement because of the proposal to introduce changes in their pension system.

“We would like to appeal to our honorable senators that we should really look for a possible middle ground where the morale and welfare of our people will be taken care of...the assurance of a modest life upon retirement,” Galvez said at a Senate hearing last week.

Marcos said he is also eyeing a housing program for uniformed personnel. “I think we will be able to do it...maybe we can tie it up with the pension. There are many schemes so it won’t be that burdensome to soldiers and the police,” he added.

Marcos also justified his decision to sign Republic Act (RA) No. 11939, which amended the fixed terms of top military officials and raised the compulsory retirement age from 56 to 57.

“We moved the retirement age from 56 to 57 for a really simple reason: K-12. Our recruits are older, they come in two years later. So...we should adjust the retirement. I think it is well-received,” the President said.

“The amendments to the AFP law were really to address some of the comments and complaints, actually, especially from the younger officers. If the senior officers remain in the service for too long, they (younger officers) will not have a chance to be promoted to higher posts. I think that took care of that,” he added.

Under RA No. 11939, the AFP chief shall have a maximum tour of duty of three consecutive years unless sooner terminated by the president. The commanding generals of the Army, Air Force and Navy and the superintendent of the Philippine Military Academy shall have a maximum tour of duty of two consecutive years.