New GSIS-run pen­sion plan for AFP may be ready this year

Business World - - THE ECONOMY - By Melissa Luz T. Lopez Se­nior Re­porter

THE gov­ern­ment hopes to draft a new sys­tem for mil­i­tary pen­sions within the year that would re­quire Armed Forces per­son­nel to pay monthly con­tri­bu­tions, Bud­get Sec­re­tary Ben­jamin E. Dio­kno said.

Mr. Dio­kno said the plan is for a three- tiered sys­tem for mil­i­tary pen­sions, while trans­fer­ring ad­min­is­tra­tion to the Gov­ern­ment Ser­vice In­sur­ance Sys­tem (GSIS).

He noted that the prob­lem stems from pen­sions be­ing pegged to the salar­ies of ac­tive­duty per­son­nel, which means pen­sion obli­ga­tions es­ca­late with ev­ery pay rise. “We are de­sign­ing a sys­tem once and for all that will ad­dress this prob­lem,” Mr. Dio­kno said dur­ing a bi-weekly brief­ing held at the Depart­ment of Bud­get and Man­age­ment (DBM) head­quar­ters in Manila.

“Be­fore end of the year, this will be done.”

Pres­i­dent Ro­drigo R. Duterte signed last month a joint con­gres­sional res­o­lu­tion which raised the base pay of mil­i­tary and uni­formed per­son­nel, to be im­ple­mented within a two-year pe­riod. The monthly base pay of can­di­date sol­diers and can­di­date coast guard per­son­nel have been set at P18,587.

Salar­ies for gen­er­als, now at P121,143, will rise to P149,785 by Jan. 1, 2019.

The gov­ern­ment spent P75 bil­lion in pen­sion and ben­e­fit pay­ments for the uni­formed per­son­nel and their fam­i­lies. “This is not sus­tain­able as it is,” Mr. Dio­kno said.

Mr. Dio­kno ear­lier said that a cap­i­tal in­fu­sion amount­ing to P7 to P9 tril­lion is re­quired to fund the pro­posed pen­sion scheme.

Un­der the planned re­form, ex­ist­ing pen­sion­ers will con­tinue to en­joy full ben­e­fits which they have been re­ceiv­ing. Those cur­rently in the ser­vice will be made to pay monthly con­tri­bu­tions to the pen­sion fund sim­i­lar to the sys­tem for civil­ians, while new en­trants will be placed un­der a new pen­sion regime.

Mr. Dio­kno did not dis­close the find­ings of an ac­tu­ar­ial study pend­ing its for­mal pre­sen­ta­tion to the gov­ern­ment’s eco­nomic man­agers.

He said some of the fund­ing for re­form­ing pen­sions might come from rent­ing out idle prop­erty owned by the Armed Forces of the Philip­pines (AFP), with the gov­ern­ment de­vel­op­ing the sites for com­mer­cial lease.

GSIS Pres­i­dent and Gen­eral Man­ager Je­sus Clint O. Aranas said last month that the pen­sion sys­tem for civil ser­vants is will­ing to man­age mil­i­tary pen­sions. He added that the pen­sion fund for re­tired armed forces per­son­nel will be sep­a­rate from the one meant for for­mer gov­ern­ment work­ers.


SOL­DIERS aboard their ve­hi­cles ma­neu­ver through a street in Marawi, in south­ern is­land of Min­danao on June 10, 2017. The gov­ern­ment hopes to draft a new sys­tem for mil­i­tary pen­sions within the year.

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