The government plans to collect contribution payments from active military and police personnel for their future pension benefits as the Duterte administration moves to the ballooning disbursements to retired officers.
Budget Secretary Benjamin E. Diokno told reporters yesterday that the new pension system for uniformed personnel, to be supervised by the Government Service Insurance System (GSIS), would be established before the end of this year.
In the case of existing pensioners, he said, the government would honor their contracts and retain the current system.
At present, pension benefits of uniformed personnel increase alongside the salary hikes being enjoyed by those in active service.
For those in active service, “we will ask them to contribute,” Diokno said.
Asked if the military and police were consulted about it, Diokno replied: “They understand that they have to contribute.”
As for new entrants to the service, Diokno said they would be placed under the new pension system to be run by the GSIS separate from its existing fund for government personnel.
The new pension fund for uniformed personnel will be partly funded by proceeds from the planned development of 100 military properties with private sector partners, Diokno said.
“We will not sell” military land, Diokno said, citing prior bad experiences when the state-run Bases Conversion and Development Authority (BCDA) sold land belonging to former military bases.
GSIS president and general manager Jesus Clint Aranas earlier told the Inquirer that they were open to managing a new pension scheme for newly installed uniformed personnel but could not absorb existing retirees as the indexation of benefits that they currently enjoyed would be unsustainable for the pension fund.
“We’re very welcome to that. It’s just that, if ever we’re going to take over the fund of the pensioners of the uniformed personnel, we would like to enroll the newly hired and commissioned officers, not the existing ones, because we cannot afford it,” Aranas said in an interview last December.
Aranas noted that at present, uniformed personnel enjoy indexation of benefits, which means that even when they retire, they still get increases in benefits similar to what active members receive.
“The GSIS fund cannot support that. It is not sustainable for us. First, they have not contributed to us, so it will be very hard for them to come in the middle of the game wherein there were no contributions made to us and then we’ll be subjected to a contract where even our existing members and pensioners are affected,” he said.
As for a new system for incoming uniformed personnel, Aranas said that despite the “high risks,” the GSIS was open to managing a separate fund for them.
“The terms may be different because they are `high risk’. They have high-risk premium—they retire at 55 and are very fit. They will enjoy their pension for a long time but will contribute for a short period because they retire early, and they don’t die young,” he noted.
“It’s not that we want them to die young, what I’m saying is that the fund [for uniformed personnel] may not be sustainable and if ever we’re going to do that, we’re going to separate the fund from the other funds we are holding; otherwise, the other funds will be affected,” he added.