Military pension fund OK’d in principle: DOF chief

FILE: Finance Secretary Carlos Dominguez III at the 51st Asian Development Bank Annual Meeting on May 25, 2018 (Photo: Department of Finance/Facebook)

MANILA — President Rodrigo R. Duterte has approved the guidelines for creating a unit in the Government Service Insurance System (GSIS) that will manage the proposed pension fund for military personnel.

“The President has already approved the basic outline of the pension plan and they are working on drafting legislation, which they will ask the members of the Legislature to file,” Finance Secretary Carlos Dominguez III told reporters in a recent briefing.

Dominguez said the President approved the proposal before he left for Bali, Indonesia to attend the ASEAN Leaders’ Conference last October.

He explained that initial capital for the proposed pension fund will be “land that is owned by the military for joint development.”

“As part of the deal, they will now be contributing (to the pension fund),” he added.

Last February, Budget and Management Secretary Benjamin Diokno said GSIS has finished the actuarial study for the proposed military pension, and its results are still being assessed by the Bureau of the Treasury (BTr).

The proposed military pension fund will be separate from that of the non-uniformed government personnel.

Authorities have pegged the initial cost of the pension fund to be around PHP7 trillion to PHP9 trillion.

Diokno further said there is also a need for active military personnel to contribute to the pension fund to ensure its sustainability.

“It is our plan to finish the problem and find a solution before the end of the year,” he added.

The Department of Budget and Management (DBM) is considering three types of pensioners under this system, namely: existing pensioners who receive pensions that are indexed to the salary of incumbent personnel; those who are in active service who will be asked to pay a contribution to make the system sustainable but will receive the benefits of the old system; and new entrants who will be covered by a new set of pension rules that has yet to be developed.

Diokno cited the need to set up a formal pension system for uniformed personnel because the military’s pension is currently shouldered by the taxpayers.