MANILA — An actuarial study on the feasibility of a Government Service Insurance System (GSIS)-run pension system for the military, which will have three types, is expected to be completed before end-2018.
Budget and Management Secretary Benjamin Diokno, in a briefing Wednesday, said GSIS officials have finished the preliminary actuarial study on the proposal but its results have yet to be presented to economic managers.
He said that officials of the Department of Budget and Management (DBM), for one, had discussed with their counterparts in the GSIS issues such as how much a pension system would cost the government and how much the GSIS needed to assume the responsibility of running the system for the government.
“I can assure you before the end of the year this will be done,” he said.
Diokno said three types of pensioners are being considered for this proposed military pension.
The first type will cover the existing pensioners, who receive pensions that are indexed to the salary of incumbent personnel.
“We will honor our contract. We’ll continue paying them,” Diokno said.
The second are those who in current service, who will be asked to pay contribution to make the system sustainable but will receive the benefit of the old system.
“They have to understand that they need to contribute especially now that they have a hefty salary increase,” he said.
The third type is for new entrants, who will be covered by new set of pension rules that has yet to be developed.
Diokno said the proposed military pension system would be handled by the GSIS but would be different compared to the system for other state workers.
“(It will) be funded by proceeds from land and other assets of the military,” he said, but clarified that the government will not be selling military assets just to fulfill the pension system.
The Budget and Management chief said there is a need to eventually set up a formal pension system for uniformed personnel because it is currently the taxpayers who pay for the military’s pension.
He said this issue has been swept under the rags for years that is why “it has not gone to such magnitude that we really need to address it.”
“It is our commitment as fiscal advisers of the President to find a permanent, sustainable solution to this problem,” he added. (PNA)