Salceda: Gov’t may face worse than mass retirement if MUP pension fund collapses  

FILE PHOTO: Albay Rep. Joey Salceda. INQUIRER

MANILA, Philippines — Albay 2nd District Rep. Joey Salceda has warned government officials that the security sector may face problems worse than mass retirement if the military and uniformed personnel (MUP) pension fund collapses.

Salceda told reporters in a message on Tuesday that the government must balance the needs of the MUPs with the sustainability of the fund — noting that financial sustainability is tied to national security.

Last May 2023, Finance Secretary Benjamin Diokno said that the MUP pension fund needs reform to avoid a collapse.  No less than President Ferdinand Marcos Jr. said that the pension might be depleted in five to six years if reforms are not done.

“I have expressed my concerns and my recommendations with the economic managers. Ultimately, we must balance the needs of military and uniformed personnel with the sustainability of the MUP pension system. Fiscal sustainability is also national security,” Salceda said.

“I have suggestions that are different from the administration’s proposal. We in Congress will flesh the matter out.  But allow me to simplify the issue: if we run out of funds to support the MUP pension system, there will be graver concerns than a mass retirement,” he added.

However, Salceda leaned toward finding a solution where MUPs would not be asked to contribute just to ensure the viability of their pension.

“My requests to the executive were these: Redo the calculations of the unfunded liabilities given 5 years of no MUP salary increase.  Reconsider the need for contributions to the MUP pension system. I am thinking about the AFP-RSBS, which ultimately failed to be a self-sustaining system. We need to learn the right lessons from that institution,” he said.

“(They should) Outline and estimate the least disruptive but effective fiscal improvements to the pension system,” he added.

Salceda gave this reply to reporters who asked about Senators Ronald dela Rosa and Robinhood Padilla, who said that problems with the pension share issue may weaken the security sector.

READ: Pension share woes to weaken security sector, senator warns

Both Senators raised concerns about the possibility of MUPs — like those from the Armed Forces of the Philippines, Philippine National Police, Philippine Coast Guard, Bureau of Jail Management and Penology, and the Bureau of Fire Protection — seeking early retirement because of the issue.

Originally, the pension fund of MUPs are shouldered by the national government — meaning personnel do not need to contribute to these funds unlike what happens with the government and private sectors security funds, like the Government Service Insurance System and Social Security System.

READ: Meet set as DOF chief warns vs ‘unsustainable’ MUP pensions 

However, with the fund being depleted to pay off claims, several proponents have raised the possibility of getting a portion of MUPs salaries to sustain the pension fund.  As of now, the Department of Finance is mulling a pension share of five to nine percent of MUPs’ monthly pay.

READ: Palace starts studying options to reform MUP pension system 

READ: MUP pension: DOF sets contributions at 5% to 9% 

In the Senate, however, there are some lawmakers supporting moves to require a contribution: Senator Francis Escudero said last Sunday while pension share may be a bitter pill to swallow, it is still necessary to avoid continuous depletion of state funds.

READ: Senator backs plan on MUP contributions to pension fund 

JPV