Teodoro allays concerns over mass retirement of soldiers

MANILA, Philippines — Defense Secretary Gilbert Teodoro Jr. has expressed optimism the government would be able to prevent a mass retirement of soldiers over the proposed reforms in their pension system, saying non-monetary benefits would entice them to remain in the service.

The Marcos administration is pushing for a law that aims to reform the pension system of the military and other uniformed personnel (MUP), citing the need to avert a fiscal crisis caused by the ballooning of pension costs.

Last month, then defense department officer-in-charge Undersecretary Carlito Galvez Jr. told senators that about 70 to 80 percent of enlisted military personnel may retire early to obtain the benefits they are entitled to under the present system.

But Teodoro said he thought the military personnel would not retire.

“It’s a matter of getting an amount now without the continuing non-monetary benefits that you will enjoy in your career path, in your career pattern. If we invest in skills upgrading, in health care, not just for soldiers but also their families, and in other non-monetary opportunities, I think they would stay,” Teodoro said at a press briefing in Malacañang.

“Especially if they see that our sacrifice is for the good of all. Because if we don’t resolve the problem, alright, what will happen? We will incur a huge deficit, there will be inflation, the value of our money will decrease and prices of goods will increase,” he added.

Teodoro said non-monetary benefits like free medical care, continuous skills training, and educational opportunities can make the military a “very attractive proposition” for the young.

“As a matter of fact, what we want to make sure also is that, they are re-employable because of their specific skill sets in the private sector after,” he added.

Among the changes being proposed in the MUP pension scheme are the scrapping of a system where a retired uniformed personnel’s pension is automatically indexed to the salary of the active personnel of the same rank, and mandatory contributions for active personnel and new entrants. President Marcos recently admitted that reforming the MUP pension system is a “monumental task” that has to be done to ensure it remains sustainable and self-regenerating.

Teodoro assured the military that the reforms in the MUP pension system would be implemented gradually.

“So I think, it’s a matter of explaining the necessity of introducing. I think, since I also came from the financial sector, it won’t be done drastically. But we have to reduce the bleeding until we sustain this system,” the defense chief said.

Asked what makes the present proposal different given that previous administrations had tried but failed to enact a law reforming the MUP pension scheme, Teodoro replied: “I think the difference is the first marching order of the President to me is to coordinate with the economic cluster so that a bill would be passed as soon as possible, to stop the hemorrhage.”

Teodoro said the reforms would allow the government to build a stable and sustainable retirement plan for people in the uniformed services.

“We must also look at the big picture that the financial sustainability of any government-funded enterprise must not result (in) the detriment of the financial position of (the) government. So we’ll have to find a healthy balance,” he said.

“And I believe that our men, women in uniform are not averse to the fact that they have to contribute to national government just as long as they see that at the end of their tours of duty, number one, they will be taken care of; number two, that the fund or whatever they have to participate in is transparently, professionally and competently managed and not mismanaged.”