Teodoro: Pension reform law for soldiers passed by yearend, implementation takes time

The military pension reform bill, which would mandate military personnel to contribute to the state-run pension system, could be passed into law by the end of the year but won’t take effect immediately, Defense Secretary Gilbert Teodoro Jr. said on Monday.

“Ang structure, makakaya, siguro...makakaya ang batas ngunit ang epekto nito, uulitin ko, dahan dahan,” Teodoro said in a chance interview ahead of President Ferdinand Marcos Jr.’s second State of the Nation Address (SONA) when asked if military pension reform will be a law by yearend.

(As for the structure, maybe it is possible...the law will be in place but as of implementation taking effect, it will be on a staggered basis.)

“Kasi ayaw natin na biglaan yan at makakapektuhan ang purchasing flow...ang cash flow, ng ating sundalo,”  Teodoro added.

(Because we don’t want it done in an instant as it will affect the purchasing flow, the cash flow of our soldiers.)

Teodoro, however, said that the military pension reform bill won’t put soldiers at a disadvantage.

“The retirees won’t be affected. Those in active service right now, it will have the least financial impact on them,” he said.

“As for the new entrants, they are the ones who will be covered by the contributory pension scheme because that will be his savings for their future.''

Under the current system, military personnel are not covered by the contributory pension scheme.

Senator Ronald dela Rosa, a former chief of the Philippine National Police, warned of a mass exodus should the military and uniformed personnel (MUP) pension reform pass.

Finance Secretary Benjamin Diokno supports military pension reform, saying that retaining the existing system would lead to a fiscal collapse.

Diokno has cited the existing automatic indexation system of the MUP pension fund, which means that the amount of a retiree’s pension is automatically adjusted to match the prevailing salary of incumbent personnel of similar rank.

Some senators 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. —VBL, GMA Integrated News