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