GSIS study shows need to allot P800B yearly pension for military, uniformed personnel for 20 years
MANILA, Philippines — Congress would need to annually appropriate over P800 billion to fund the pension scheme for military and uniformed personnel (MUP) if there would be no reforms taken in the existing system, an actuarial study by the Government Service Insurance System (GSIS) showed.
During a Senate hearing tackling proposals to reform the existing MUP scheme, Senator Panfilo Lacson, chair of the committee on national defense, bared receiving a GSIS actuarial study on the updated results of funding requirements of the existing retirement pension scheme.
“The numbers from the updated study tell us that the daunting scenario that the estimated seed fund needed for the proposed pension system is about P9.6 trillion,” Lacson said in his opening statement.
“In order to fund said seed fund, the study suggests that Congress needs to appropriate more than P800 billion annually, for 20 years, if no changes or reforms are made on the pension system,” he added.
The MUP consists of members of the Armed Forces of the Philippines (AFP), Philippine National Police (PNP), Philippine Coast Guard (PCG), Bureau of Fire Protection (BFP), Bureau of Jail Management and Penology (BJMP), the Bureau of Corrections (BuCor), and National Mapping and Resource Information Authority (NAMRIA).
According to GSIS Actuary Group Manager Jenny Lobas, the study took into consideration a one-time infusion of the proceeds from the total sales of MUP assets, which is currently pegged at P14.98 billion
Lobas, however, noted that the value of assets of the AFP, BFP, BuCor and NAMRIA are “not available.”
Lacson asked the said agencies to submit to the committee and to the GSIS the value of their assets so that the latter can present a complete view of funding requirements.
The GSIS study also showed that there are 402,086 active members among the MUP as of December 2019, with an average monthly salary of P39,687 and an average of 10 years in service.
Meanwhile, there are 196,004 regular pensioners among the MUP, with an average monthly salary of P39,520 and an average attained age of 64.
National Treasurer Rosalia de Leon also underscored the need to make reforms in the existing pension scheme for the MUP.
“We’ve seen already the ballooning impact of the pension if we do not address the issue right away and we do not act now. Just to highlight, when we first did the actuarial study using the 2016 database of the MUP, the unfunded liability then was just P5 trillion. So now that we’re using the 2019 database, it has already ballooned to P9.6 trillion,” De Leon told senators.
“We really have to have this as a front and center issue that we have to confront,” she added.
Senators have been looking into raising the mandatory retirement age of MUP from 56 to 60 years old to manage escalating pension costs seen to be unsustainable in the long run.
