DOF presents recommendations to resolve military pension woes

Finance Secretary Carlos G. Dominguez III said yesterday that his economic team has presented recommendations to address the issues on pensions of military and police personnel.

Earlier, President Duterte ordered his economic managers

to resolve quickly the ballooning and unsustainable funds needed for the pension of the military and the police, the Department of Finance (DOF) said.

One of Dominguez’s recommendations is to assign the Government Service Insurance System (GSIS) as the fund manager of the military and the police pension.

“We have to sit down together to work out the mechanism for solving this problem which will involve turning over some of the real estate assets of the organization to be able to set up a fund for the retirement,” Dominguez told reporters.

The economic team presented the recommendations to the heads of the Department of National Defense, Armed Forces of the Philippines, Department of Interior and Local Government, and Philippine National Police.

Representatives from the Department of Transportation and Department of Justice were also present during the meeting with the economic managers.

“We are recommending [that the fund] be managed by the GSIS, [but] separately from the current [assets belonging to other government employees],” he added.

Asked how much capital is needed from the government to support the military pension, Dominguez said it’s “quite a lot, depending on the future plan” but did not provide the actual figures.

In September last year, former GSIS Chairman Francisco T. Duque III said that the pension fund will require 17 trillion in additional capital if the national government wanted to integrate the military’s pension system.

“The President asked us to move forward quickly and we have to make another presentation to him on the progress by the end of August,” Dominguez said.

Dominguez earlier said that there were proposals to allocate Bases Conversion and Development Authority’s (BCDA) revenues to support the military’s pension system.

But Dominguez said the proposed integration of the military pension with the GSIS may require approval of Congress, noting planned transfer is a “political decision” that requires prudent study to determine the potential impact of the proposal on the government’s fiscal condition.

Budget Secretary Benjamin E. Diokno earlier expressed concern on the pensions of the country’s security personnel, noting that the government now has to pay more for pensions than for the salaries of those still in the active service.

Every year, the government allocates 190 billion in the national budget for the retirement fund of soldiers and policemen.