The economic team of the Marcos administration recommended that active military and uniformed personnel (MUP) contribute 9% of their basic salary and longevity pay to fund the first three years of their retirement pension.
The contribution was raised from 5% to 9%.
In a statement issued on Saturday, the technical working group (TWG) of the Department of Finance (DOF) will help develop a pension reform law for MUP, and new entrants to the uniformed services would contribute 9%.
The TWG stated that the government will supplement MUP payments such that the monthly premium would be 21 percent—16 percent for active duty members and 12 percent for new entrants.
Other state employees pay the same total monthly premium.
This sharing system for active service members will be changed until a ratio of 9:12 is achieved in the seventh year of implementation of a plan aimed at preventing the depletion of the existing MUP pension fund.
The state pension fund manager, Government Service Insurance System (GSIS), will then invest the cash created from monthly premiums to expand the MUP pension kitty and attain an 85 percent to 90 percent return upon uniformed service members' retirement.
Members of the Armed Forces of the Philippines, the Philippine National Police, the Bureau of Jail Management and Penology (BJMP), the Bureau of Fire Protection (BFP), the Philippine Public Safety College (PPSC), the Philippine Coast Guard (PCG), the Bureau of Corrections (BuCor), and the National Mapping and Resource Information Authority (Namria) are among those covered by the current MUP pension system.
Unlike other state employees, they do not contribute any money from their pay to their retirement fund, which is funded by the national budget every year.
According to Diokno, this is one of the shortcomings of the current MUP pension system.
Other government employees contribute 9% of their monthly income, with their employers matching at 12%, for a monthly pension fund premium of 21%.
SSS members contribute 4.5 percent of their monthly earnings to their pension fund, while their employers contribute 9.5 percent.
Members of the uniformed services retire at the age of 56, which is substantially younger than the retirement age for other government employees, who can choose early retirement at 60 but must fully retire at 65.
As a result, soldiers, police officers, and other uniformed personnel benefit sooner and enjoy their pension fund for a longer period of time than the rest of the government workforce.
Furthermore, under the so-called automatic "indexation," they receive additional amounts whenever the monthly payment of uniformed personnel in active service with the same rank as theirs is increased.
