Senators want study on 5% to 9% contributions to MUP pensions

Senators over the weekend called for a thorough study on the Marcos administration economic team's proposal to have military and uniformed personnel (MUP) contribute up to 9% of their monthly pay to their pension systems, citing the country’s current fiscal condition.

In a statement released Sunday, Senator Francis “Chiz” Escudero said he would like to see the fine print on the economic team's proposal, such as how the contributions would translate in real terms across the different ranks in the MUP.

“I am more than willing to study the details of this proposal because I agree with PBBM that this problem of MUP pension should be addressed at the soonest,” said Escudero.

Department of National Defense Secretary Gilbert Teodoro Jr., who was appointed to his post earlier this month, said President Ferdinand “Bongbong” Marcos Jr.’s first marching order was to continue to reform the MUP pension system.

Marcos in May pushed for “self-regenerating” pension plans for both the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) in an effort to avoid a scenario in which the funds would be depleted.

The economic team, headed by Finance Secretary Benjamin Diokno, had warned of the consequences of the pension payments, with the total yearly payouts expected to hit the P1-trillion mark by 2035 from P213 billion in 2023.

Under its proposal bared over the weekend, a technical working group led by the Department of Finance (DOF) called for MUP in active service to contribute 5% of their monthly pay, and new entrants to contribute 9% of their basic salary and longevity pay.

Escudero on Sunday, however, raised questions such as how much the government’s 12% share would translate in real terms and where this would be sourced from. He also asked for an actuarial study to see if this would be sustainable in the next 100 years.

Committee on National Defense and Security Chairperson Senator Jinggoy Estrada mirrored Escudero's view that the proposal needed to be studied.

“Kailangan na itong pag-usapan ngunit hindi dapat minamadali. Kailangang makahanap tayo ng isang sistema na katanggap-tanggap sa lahat,” said Estrada in a separate statement.

(This needs to be discussed, but should not be rushed. We need to find a system that will be acceptable to all.)

“Our military and uniformed personnel have dedicated their lives to serving and protecting our nation. But we also cannot turn a blind eye to the pressing concerns surrounding their pension system which calls for immediate and comprehensive reform,” he added. — DVM, GMA Integrated News