Teodoro bats for 'stable, sustainable' retirement plan for MUPs

By Ruth Abbey Gita-Carlos

June 8, 2023, 5:20 pm

<p>File photo</p>

File photo

MANILA – The Marcos administration will ensure that the military and uniformed personnel (MUP) will enjoy a "stable and sustainable" retirement plan, Defense Secretary Gilbert Teodoro Jr. said on Thursday.

"We can also build a stable and sustainable retirement plan for our men and women in uniform," Teodoro told Palace reporters in a press conference.

This, as Teodoro revealed that President Ferdinand R. Marcos Jr.'s "marching order" for him is to coordinate with the economic team to fast-track the passage of a measure introducing reforms to the MUP's current pension scheme.

Teodoro said the government will have to find a "healthy balance" and "look at the big picture" to make sure that the financial sustainability of any state-funded enterprise would not result to the detriment of the government's financial position.

"The only consultation I had with the President, first and foremost, is to speed up the MUP [reform initiatives]," the newly installed Defense chief said.

"I will receive total briefings in the coming days as to what progress has already been done. And I understand, significant progress has already been done towards getting a consensus," he added.

The departments of finance, budget, defense and the interior and local government have started discussions and consultations with concerned agencies and stakeholders to come up with a "reasonable" proposal to reform the MUP pension system.

Under the current pension scheme, MUP are granted one rank higher upon retirement with their monthly pension automatically indexed to the salary of personnel in active service.

Non-monetary benefits

Former Defense officer-in-charge Undersecretary Carlito Galvez Jr. earlier noted that around 70 to 80 percent of the military's enlisted personnel might retire early because of the proposed changes in their pension scheme.

Teodoro said there are existing non-monetary benefits that may entice military personnel to stay longer and wait for their mandatory retirement.

"And I believe that our men, women in uniform are not averse to the fact that they have to contribute to national government, just as long as they see that at the end of their tours of duty, number one, they will be taken care of; number two, that the fund or whatever they have to participate in is transparently, professionally and competently managed and not mismanaged," he said.

"There are non-monetary benefits that you can get like free medical care, continuous skills training, educational opportunities and the like. As a matter of fact, what we want to make sure also is that, they are re-employable because of their specific skill sets in the private sector after," Teodoro added.

In March, the Marcos administration announced its plan to implement reforms in the MUP retirement and pension system to avoid a "fiscal collapse" caused by the pandemic.

Marcos said his administration would come up with "self-regenerating" pension plans for both the military and the police.

The proposals for the pension reform include application of the reform to all active personnel and new entrants; removal of automatic indexation of pension to the salary of active personnel of single ranks; and mandatory contributions for active personnel and new entrants similar to the Government Service Insurance System pensioners.

Under the proposed scheme, the MUP will receive their pension starting at 57 years old, not automatically after 20 years of service. (PNA)