DND: Military, uniformed personnel's pension reform to apply only to new entrants

Only new entrants will be covered by the proposed reform on the pension system for military and uniformed personnel (MUP), the Department of National Defense (DND) said Monday.

The DND said the Department of Finance (DOF) spokesperson on the proposed MUP pension reform, Director Valery Joy Brion, has explained that Senate discussions have pointed to the creation of a “dual pension structure.”

“Representatives from the DOF and DND confirmed that the Duterte administration’s proposed reform of the MUP pension system will only apply to new entrants in the service,” the DND said in a statement.

The dual pension structure will keep the current pension and retirement benefits system of active and retired personnel, while applying the reform only to those who will enter the service upon the effectivity of the Act.

The adjustments in the pension system include the following:

• mandatory contributions to fund pensions
• discontinuation of automatic indexation
• computation of pension benefits at -rank upon retirement
• adjustment of pensionable age
• creating an MUP Trust Fund Committee to oversee the MUP pension system
• designating the Government Service Insurance System (GSIS) as the administrator of the MUP pension system

DND spokesperson Director Arsenio Andolong said the reform intends to create a more financially sustainable MUP pension system.

The DND said the reform intends to control the looming PHP9.6 trillion worth of unfunded pension liabilities, which may continue to grow if the current scheme prevails.

Also, the DOF said the adjustment will save the MUP pension system and is crucial to post-pandemic fiscal and economic recovery. —Joviland Rita/KBK, GMA News