Congress needs to fix govt pension system

DO you know that for every peso spent on the salary of an active military personnel, the government is paying another 60 centavos as pension for a retired soldier? That means the annual military spending for three servicemen only really produces two active soldiers.

Let’s do the numbers. Of the Department of National Defense’s (DND) proposed budget of P258 billion for Calendar Year 2020, more than a quarter (or P69.7 billion) is allotted for pensions and gratuity funds for retirees of the Armed Forces of the Philippines (AFP) and war veterans. Taking out the amount earmarked for the pension fund, that leaves the DND with around P188.6 billion in regular funds.

Of the P188.6 billion, P119.12 billion, or about 63 percent of the regular fund, was earmarked for personnel services to cover the pay of 148,668 uniformed personnel, 69,938 Citizen Armed Force Geographical Unit members and 12,400 civilian employees. The P69.7 billion allocated for the pension fund is equivalent to around 60 percent (or 60 centavos of every peso) of the P119.12-billion budget for active service personnel.

Lest I be misunderstood, I’m not against giving retired soldiers

- sion to sustain their daily needs.

My point, however, is that depending on the annual budget appropriation to fund the growing pension fund requirements for military personnel is neither prudent nor sustainable in the long term. With the pension fund disbursement and personnel services expenses taking up the bulk of the national defense budget that leaves very little for the modernization of our armed forces.

In order to have a credible defense posture in the region, the country needs to increase defense spending to at least 2 percent of the country’s gross domestic product (GDP). According to the Stockholm International Peace Research Institute’s Military Expenditure Database, the Philippines spends only 1.1 percent of its GDP on its armed forces. If defense expenditure is to be at least 2 percent of the country’s GDP, the regular defense budget should be around P320 billion, or almost twice the current P188.6 billion regular defense allocation.

But that’s not likely to happen and uniformed personnel.

If we

will be allocating more for pensions than the salary of those in the active service.

There is a plan to overhaul the pension system through the Military and Uniformed Personnel pension reform bill, which will set the compulsory retirement age at 60, instead of the current 56. The retiree must also have had 20 years of satisfactory active service to be entitled to a pension. This

by Malacañang if it is to put the bloating payouts to armed forces and police retirees under control.

Another option that ought to be explored is to place the management of the retirement and pension fund for military and uniformed personnel under an independent agency controlled by the national government, similar to the Government System and Insurance System ( GSIS), but without the controversies. What is clear though is that President Duterte cannot let military of

pension fund for the military and police personnel.

We don’t want a repeat of the Armed Forces’ Retirement decades of operation due to its flawed business model, aggravated by management blunders. Due to alleged anomalies and

abolished in April 2016 by the BS Aquino 3rd administration. Even after its abolition, the Commis

“serious inaccuracies in the accounting of funds and real estate properties” by the defunct RSBS.

But it’s not only in the military and uniformed personnel that funding for retirement benefits and pensions that’s an issue.

Congress has the propensity of enacting laws that give lavish pen

from certain agencies, claiming that such pension fosters the autonomy

The law usually provides that when

have rendered a certain number of years of service retire, “he or she shall receive during the duration of his or her natural life, retirement

salary plus representation and other allowances.”

The problem with these laws,

the country’s annual budget for