Pension reforms eyed for uniformed services

President Ferdinand Marcos Jr. (Photo from the website of the Presidential Communications Office)

MANILA, Philippines — The government has enlisted the help of the Government Service Insurance System (GSIS) in reforming the problematic pension system for military and uniformed personnel (MUP).

In his speech at the 86th GSIS anniversary on Wednesday, President Ferdinand Marcos Jr. said that multisectoral discussions were ongoing regarding the pension system.

“I take this opportunity to enlist the active and continuing support of the GSIS regarding a special matter,” he said, adding: “Comprehensive multisectoral discussions are now ongoing, and I thank [the] GSIS for your involvement and participation because your experience and your acquired skills have been an important part of this ongoing process.”

The president described the pension system for MUP as a “monumental task, with all the legal and financial setbacks that it has encountered.”

“But we genuinely recognize that it is as important, urgent, and humanitarian as the pension system of all civilian government employees,” he added. According to him, it was necessary that the government “establish the most appropriate and strategic mechanism to get it functioning, or at the very least, to start to lay the foundations for the system that will function in the long run.”

The MUP pension system is fully funded by the yearly national government budget with no contributions from uniformed personnel.

Necessary reform

In March, Finance Secretary Benjamin Diokno said that reform was necessary to avoid a “fiscal collapse” and allow the government to save P130 billion a year.

For this year alone, Diokno said that the government had allotted P120 billion to P130 billion for the pension of uniformed personnel.

More recently, National Treasurer Rosalia de Leon said the funding required to pay for MUP pensions had been growing at a “fiscally unsustainable rate,” since the unfunded liabilities were already estimated at P9.6 trillion as of 2020.

The executive branch earlier proposed that the MUP pension system reform cover both active personnel and new entrants, by requiring them to make contributions toward their pension. The move, however, was opposed by uniformed personnel who said that the new system should apply only to new recruits.

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