The Bureau of Jail Management and Penology (BJMP) welcomed the economic team to conduct consultations vital to crafting the pension reform bill for military and uniformed personnel (MUP) on June 13, 2023 at the BJMP National Headquarters in Quezon City.
The event gathered 10,000 BJMP uniformed personnel, via physical and virtual attendance, composed of frontliners from every station, regional directors, and new entrants to exchange views on the economic team’s proposed reforms to the current pension system.
Representatives from the Department of Finance (DOF) and Bureau of the Treasury (BTr) answered questions and took note of concerns raised by the BJMP members.
In his presentation, Deputy Treasurer Erwin D. Sta. Ana explained the impact of the current pension system and emphasized the importance of establishing a sustainable fund to secure the future of all MUPs.
According to the economic team, the computations for the proposed contributions will be based on data from the Government Service Insurance System (GSIS)’s updated actuarial study, which will be released soon.
Under the current proposal, for the first three (3) years, a five-percent contribution of the MUPs in active service will be supplemented by the government with a 16-percent share, to fulfill the 21 percent total monthly premium for the trust fund. This sharing scheme shall be adjusted until a nine-percent to 12-percent contribution ratio is reached on the seventh year.
Meanwhile, new entrants shall contribute nine percent of their base and longevity pay, with a corresponding 12-percent contribution from the government.
The monthly premium will then be invested by the GSIS, allowing the fund to grow in order to achieve the required return of 85 to 90 percent of pension upon retirement.
Similar to previous consultations, some voiced their reservations regarding the pension fund’s management under GSIS and urged the economic team to consider the unique nature of their work in crafting the bill.
The economic team assured stakeholders of the GSIS’ capability and expertise in growing the fund. Furthermore, proper representation will be given to MUPs in the oversight committee which will help determine where the fund will be invested in.
During the discussions, some members likewise expressed interest in the proposed optional retirement schemes and sought clarifications regarding the terms.
In particular, a member inquired about the survivorship terms provided under optional retirement. Undersecretary Maria Luwalhati C. Dorotan Tiuseco clarified that since options 2 and 3 aren’t paid in lump sums, the survivorship benefits for these will kick in.
MUPs who avail of optional retirement are given the prerogative to choose among three options when claiming pension benefits. The options are as follows:
Option 1: Receive all pension benefits* in one lump sum upon retirement
Option 2: 60 months advance*, then payment of monthly pension benefits will kick in after 5 years
Option 3: Receive pension benefits at age 57
*Net present value of pension benefits
The question on whether the reforms to the pension system will also lead to the increase in base pay and allowances, also arose.
Undersecretary Dorotan Tiuseco said that by reforming the pension program, the government can create fiscal space and possibly provide additional budget for more benefits for those in active service.
By conducting a series of dialogues across the country, the economic team hopes to gain valuable insights and quell the spread of misinformation among stakeholders.
Jail Chief Superintendent Ruel S. Rivera who was recently appointed as Acting Chief of the BJMP emphasized the importance of having these consultations in order to grasp the reality on the field.
He also said that these informative discussions are especially important for new entrants who will be coming into the new system.
“Unawain naman natin ang sitwasyon ng government natin ngayon. Because kung wala ang gobyerno, wala tayo. Kung wala tayo, wala rin ang gobyerno…so kailangan may konsultasyon––at heto na nga ginagawa natin,” Jail Chief Superintendent Rivera said.
[We have to understand our government’s situation now. Without the government, there is no us. If there is no us, there is also no government…so there is a need for consultations––and this is what we are doing now.]
“We must strive hard to have a balance. As members of MUP, we have to accept that we have to balance everything––the economy side and the peace strategy of the government,” he added.
Representatives from the Presidential Legislative Liaison Office (PLLO) and the Office of Senator Jinggoy Estrada were also present to show their support for the proposed reforms.
The next leg of consultations with the Visayas and Mindanao Commands of the Armed Forces of the Philippines (AFP) has already begun and will continue until June 16, 2023.