Aquino to nix military pensions, too

After exercising a veto against a hike in Social Security System (SSS) pensions, President Benigno Aquino III will also be taking a hard-line stance against a higher pension for retired military and police personnel if it would unduly burden the next generation, according to Communications Undersecretary Manuel L. Quezon III.

Quezon said Malacañang was exerting all efforts “quietly and behind the scenes” to ensure that the issue of military pensions would not stall the passage of the general Salary Standardization Law (SSL).

The new SSL is in danger of not being approved by the bicameral conference committee before Congress holds its final session day on Feb. 3 because of a conflict in the House and Senate versions regarding the handling of military pensions.

Congress will adjourn next week with the start of the official campaign period on Feb. 9.

In a radio interview, Senate President Franklin Drilon guaranteed that the SSL would be approved by Congress and signed by the President. Drilon was hoping that the House would agree to the pension indexation and allocate the estimated P18 billion additional fund in the 2017 budget.

Speaker Feliciano Belmonte Jr. was also optimistic that Congress would agree and uphold the SSL bill.

The House had excised the provision on “indexation” or the pegging of pensions of retired uniformed personnel to current salaries. The position of the Department of Budget and Management is that this provision would require ballooning and unsustainable fund allotments from the government.

Over the last 13 years, the government has already accumulated P18 billion in unpaid pension adjustments to military officers based on a Marcos decree mandating a pension hike among retired military personnel at par with the pay hike of active soldiers. The government did not allocate funds for the pension increase starting in 2002. The Commission on Audit issued a ruling in May last year ordering the payment of pension arrears.

The Senate, however, is in favor of retaining the  automatic increase in the pension of retired military and police as mandated by law with the implementation of a P226-billion salary hike for 1.53 million government employees spread over four years under the SSL.

The House has proposed to implement the salary hike because this has already been allocated in this year’s budget—but without the indexation of military and police pensions. This matter would be dealt with in a separate bill.

The Senate proposed that the SSL be approved with the controversial pension indexation intact, but with a provision that this would be “subject to the availability of funds.”

Malacañang said it did not want to leave the funding of military and police pensions to chance.

“It would be best to appeal to both the Senate and the House [of Representatives] to think not only of the benefits for the government workers but also to think of the implications of the funding that would be undertaken by the coming generations,” Quezon said.

Quezon explained that once the military and police pensions would be based on current and not previous salaries, this would have dire implications on the next generation who would have no choice but to pay for the salary hike. “The pension rate would be based on a moving target and this will grow so much that it will be impossible to finance through member contributions,” Quezon said.

Quezon pointed out that the President himself had appealed to Congress in a Sona to reform the military and police pension system with the collapse of the Armed Forces and Police Saving and Loan Association Inc. during the Ramos administration. But Quezon said that any reform should not be made at the risk of pushing the entire pension system to financial collapse.

“So we’re hoping that members of the Senate and the House are discussing this thoroughly and that they are looking for a win-win solution,” Quezon said.

Malacanang’s opposition to the pension hike for military and soldiers mirrored the reasons given by the President when he vetoed the SSS bill granting a P2,000 pension hike to members.

The President said the pension hike would imperil the SSS and push it to bankruptcy in 12 years to the detriment of 27 million members who would sacrifice for the sake of 2 million SSS retirees. But unlike the SSS pension hike, the indexation of military pension is mandatory under the law.