Gov’t mulls mandatory contribution to fund pension of cops, soldiers

(POLITIKO) There is an urgent need to reform the pension system for the military and uniformed personnel (MUP) to avert a possible fiscal crisis in the near future, National Treasurer Rosalia de Leon said during a recent hearing at the Senate.

As such, the treasury department also wants those in the active service and new recruits to allocate a portion of their salaries to a new pension system to cover their retirement benefits.

Taking from Finance chief Benjamin Diokno, De Leon said the finance department is proposing that the proposed MUP pension reform shall apply to all active personnel and new entrants. It is also pushing to institute a minimum pensionable age of 57 years old.

“We also propose that those in active service and new entrants be required to contribute a portion of their monthly compensation to the MUP Trust Fund to finance their pension and additional benefits such as the increased disability pension and life insurance,” she said.

De Leon stressed the point during her presentation on Tuesday before the Senate hearing led by National Defense and Security chairman, Sen. Jinggoy Estrada, on the proposed MUP Services Separation, Retirement Act of 2023.

According to De Leon, the government’s MUP pension reform is anchored on two-key principles— first, pension security and predictability; and second, our investment in peace and national security.

De Leon pointed out the need to establish a strong, sustainable, and robust social protection system for all MUPs.

“The proposed MUP pension reform aims to establish a strong protection system that can provide a dignified post-retirement income that MUP retirees can rely on in their old age,” she said.

De Leon further explained the need to enhance the fiscal—financial sustainability of the MUP Pension System, which she deemed “key to ensuring that the state is able to honor its future promises to retirees and their dependents.”

“This is only possible if we have a robust, well-functioning, adequately funded, and resilient pension system that can stand emerging risks and financial vulnerabilities,” de Leon said.“In this way, we can secure the pension, not only of current retirees but also of new entrants and active MUPs,” she added.

Second, De Leon added, the pension reform is an investment in peace and national security.

“We understand that peace, order, and security are preconditions for the country’s development.

Hence, the state is committed to investing in the welfare of our nation’s primary defenders, from the moment of entry into the service until their old age,” she said.

But this requires a balance between investments in a modern defense system for our active defenders and a reliable, dignified, and stable social safety net for MUPs in their old age.

De Leon said the government also recognizes the sacrifices the MUPs made for the Filipino people. But in doing so, de Leon said there should be a “financially sound, robust, and sustainable over time, allowing the State to secure pensions for current and future retirees and their dependents.”

She added the government will continue to work with the concerned sectors to address the grievances aired against the plans to reform the pension system.