Albay 2nd district Rep. Joey Salceda (left) and DND Secretary Gibo Teodoro (Rep. Salceda's office, Facebook)

Albay 2nd district Rep. Joey Salceda is amenable to Department of National Defense (DND) Secretary Gibo Teodoro's suggestions on how to reform the pension system of military and uniformed personnel (MUP).

In a statement Tuesday, Aug. 22, Salceda, chairman of the Ad Hoc Committee on the MUP Pension System, said he “accepts the proposals of Secretary Teodoro on the substitute bill to the Military and Uniformed Personnel pension reform”.

“Since the committee already terminated proceedings, we will introduce this as amendments to the floor instead," said the Bicol solon, who is also the Ways and Means Committee chairman.

“As chairman of the Ad Hoc Committee, I would like to assure the secretary that his requests are acceptable. We will adopt the Teodoro proposal of indexation for all retired and retireables and a transitioned contribution scheme," Salceda said.

Last week, the ad hoc panel approved a substitute bill for MUP pension system reform. This was an offshoot of the legislators' aim of fixing the fiscal issues of the system and make it sustainable on the part of the government.

Teodoro had insisted that no changes should be made on the pension and entitlements of retired military personnel. He also said that 100 percent indexation or the continued rise in pension along with the rise in salary of active military personnel must also be kept.

“My job is to get a bill that will work fiscally, but is also acceptable to all stakeholders," Salceda said.

"So, of course, if Secretary Teodoro has major concerns, part of my job is to accommodate. Not without DOF concerns, of course, but that’s for them to settle in the Cabinet.”

“Of course, the proposal will add some P1.2 trillion more to the actuarial reserve deficiency, from the current P2.2 trillion under the current substitute bill," he noted.

“Only new entrants will contribute the 9 percent with government counterpart of 12 percent. And I will heed the request for full indexation for those who are retired and due for retirement,” Salceda added.

At any rate, the economist-solon said that they are "still clarifying with the DOF (Department of Finance) and the DND exactly what the request is, because we are hearing clarifications that they just want to ensure that those who have given 20 years of service or more will not pay contributions or be subject to lower indexation".

"Our initial impression from the statement is that they don’t want anybody from the active service to pay any contribution or to give up any amount of indexation," he said.

“I would also like to remind all stakeholders that the aim of fiscal sustainability is to ensure that the pension system is substantially preserved in a way that can still be guaranteed by the State. In other words, a reform that is not too expensive, but also not too disruptive," he said.

Salceda also said that “there could be some pushback from the DOF and the economic managers on the Teodoro proposal. So, we hope that within the executive, they will sort their position out.”