The Department of Finance’s (DOF) proposed initial five percent monthly contribution rate from the military and uniformed personnel (MUP) is too burdensome for the low-ranking soldiers, especially the enlisted personnel (EPs). Sen. Jinggoy Ejercito Estrada disclosed this was part of the main comments and concerns of the MUPs as a result of the DOF’s nationwide roadshow on the MUP pension system reform bill.                        Sen. Jinggoy Ejercito Estrada (Senate PRIB Photo)
Estrada also said that based on the DOF’s roadshow, the MUPs are already happy with the current pension system and they proposed to apply the reforms on the pension system to new entrants only. “There are around 163,000 enlisted personnel, baka hindi nila kayanin ang 5 percent na iko-contribute nila (they might not afford the five percent that they need to contribute),” Estrada said during a Kapihan sa Senado on Monday, June 26. “Yung mga enlisted personnel, mababa lang ang ranggo nila, tulad ng casual laborers, sweldo nila, yung iba pinangungutang ang sweldo nila (The enlisted personnel belong to the lower rank, like casual laborers. Some of them even have to pawn their salary),” he pointed out. However, state economic managers are not amiable to lowering the proposed five percent. “Baka we might not meet the target kapag binaba pa (if they lower it),” he said. The Marcos administration’s economic team has proposed that MUPs in active service contribute 5 percent of their monthly pay to their retirement fund for the first three years of the planned pension reform system. New entrants, on the other hand, would be contributing 9 percent of their basic salary and longevity pay. Estrada said he has recommended to the country’s economic managers to study the feasibility of selling or leasing the properties owned by the Armed Forces of the Philippines-Retirement and Separation Benefits System (AFP-RSBS). “They used to contribute to the RSBS, but when it became defunct, they stopped contributing,” Estrada said. “That’s why I recommended to the economic managers that since the RSBS has many properties, they can sell it, or lease it just to augment the MUP pension,” he stressed.

GSIS to handle MUP pension funds

Estrada also reported that the Government Service Insurance System (GSIS) has agreed to manage the pension of the MUPs, “which is the most important” development in the ongoing discussions on the proposed MUP pension reform system. “Ibigay na natin sa mas experienced, mas expert, dito sa GSIS, para maiwasan yung mismanagement, yung nangyari sa RSBS (We decided to give it to a much experienced, more expert institution, to the GSIS to avoid mismanagement like what happened to the RSBS),” he said. But based on the results of the roadshow of the DOF, many of the MUPs are willing to contribute but they harbor distrust with the GSIS and fear fund mismanagement will still happen similar to what happened to the failed RSBS. Nevertheless, Ejercito said he has instructed the technical working group (TWG) to address the concerns of all the stakeholders concerned. “I have told them again not to rush it. We have to draft a bill that is acceptable to everybody,” he stressed.