Estrada sees passage of MUP pension reform by year's end

Senator Jinggoy Estrada on Monday expressed optimism that the proposed bill on the pension system of military and uniformed personnel (MUP) will be enacted by the end of 2023.

“Ang target ko dito by the year end, sana magkaroon na tayo ng batas,” Estrada, chairman of Senate defense panel, said at the Kapihan sa Senado.

This, as he explained that the government would need to shell out around P200 billion per year to shoulder the pension of the MUPs sans the law that will change the pension system.

Estrada also disclosed that he had proposed to the economic managers the use of properties owned by the Armed Forces of the Philippines Retirement and Separation Benefits System (RSBS) to augment the pension funds.

“I have recommended to the economic managers, particularly sila National Treasurer, [Budget] Secretary [Amenah] Pangandaman, marami namang properties RSBS, they can sell it, they can lease it just to augment itong pension,” he said.

The recommendation was made after AFP Chief of Staff Andres Centino informed him of the RSBS’ properties which can be leased.

Right now, Estrada said he is not keen on conducting another hearing on the MUP pension reform bills, but he will continue the consultations with the stakeholders, including Defense Secretary Gilbert Teodoro Jr., Department of Finance, Department of Budget and Management and the agencies that will be affected by the proposed pension reforms.

“We will craft a bill which will be acceptable to everyone. Ayoko ng mayroong nagrereklamo,” he said.

He said the proposed 5% contribution for enlisted personnel which he thinks is “too high and burdensome” will be among the issues to be threshed out.

But Estrada believes that the 9% contribution for new entrants would be “feasible” and will not discourage individuals who would like to be part of the government forces.

Further, Estrada disclosed that the Government Service Insurance System (GSIS) has already agreed to manage the MUPs.

“Yun ang pinakaimportante sa akin. Kasi kung ibibigay sa ibang tao ‘yan baka malugi. So Ibigay natin sa may experience, sa expert. Dito sa GSIS,” he said.

Earlier, Estrada and Senator Francis Escudero  called for a thorough study on the Marcos administration economic team's proposal to have MUP contribute up to 9% of their monthly pay to their pension systems, citing the country’s current fiscal condition.

Defense Secretary Gilbert Teodoro, 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, a technical working group led by the 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.—LDF, GMA Integrated News