Gov’t earmarks P220B for MUP pensions in 2024

BATTLE READY. Troops from the Philippine Army stand in formation in Fort Bonifacio, Taguig City. The government is studying whether they would be required to contribute to their retirement fund. —MARIANNE BERMUDEZ

BALER, AURORA — Budget Secretary Amenah Pangandaman on Friday clarified that there was no decision yet on whether military and other uniformed personnel (MUP) would be required to contribute to their retirement fund.

“We haven’t finalized yet who will contribute now or in [the] transition,” Pangandaman said during the commemoration here of the Siege of Baler, now known as Philippine-Spanish Friendship Day.

“We still don’t have the exact number regarding how much they would contribute,” she added.

What is certain, Pangandaman said, was that the government will still allocate around P220 billion for the MUP pension in the proposed P5.768-trillion National Expenditure Program (NEP) for 2024.

“It (NEP) was already approved by the President last week, so we’re just slightly fixing the general provisions, special provisions and the numbers,” she said.

Pangandaman said the economic team carried out a nationwide consultation with MUPs and they were still collating the results of their discussions.

But there appeared to be an emerging consensus, in the Senate at least, that no mandatory pension contributions would be collected until a new law is passed and such contributions would apply only to new MUPs.

Sen. Juan Edgardo Angara, who will be defending the government’s yearly budget as chair of the Senate finance committee, joined some of his colleagues in rejecting mandatory pension contributions from MUPS.

Only new entrants

“As much as possible, they shouldn’t be made [to pay for their pension],” Angara said.

“Definitely, it will be hard for those who have served for many years if you require them to contribute after the sacrifices they had made [for the country],” he added.

If at all, Angara said the planned restructured MUP retirement system should only cover the new entrants.

The proposal of President Marcos’ economic managers requiring servicemen to contribute to their pension was intended to address the government’s growing unfunded obligations, which already reached P9.6 trillion in 2020.

Under the plan, active MUPs would pay 5 percent of their monthly salaries for their pension premiums for the first three years under the new system.

On the other hand, those who will join the armed services after a new law is passed would be made to pay 9 percent to the fund.

Last week, Sen. Jinggoy Estrada, the chair of the Senate national defense and security, said enlisted personnel of the Armed Forces of the Philippines rebuffed the plan to deduct pension premiums from their monthly pay.

READ: Salceda bill pushes pension reforms for uniformed services