Bill on taxpayers’ rights gets House panel’s nod

By Jovee Marie N. dela Cruz @joveemarie

DOF officials said last Tuesday they believe restructuring loans would ease the impact of the proposed mandatory contributions on MUP personnel, particularly to those currently burdened with “heavy personal loans.”

“The creation of a self-sustaining pension fund insulated from economic shocks and the budget- ary process is key to ensuring that the State is able to honor its future promises to retirees and their dependents,” Finance Secretary Benjamin E. Diokno was quoted in a statement as saying. Diokno said government believes requiring soldiers, policemen, and other uniformed employees of the state to contribute to their own pen- sion would be “beneficial” since such arrangement would give these staff “full ownership and vested rights over the pension fund.”

The DOF explained that the executive’ branch, proposed reforms to the MUP include a uniform retirement age of 57 or upon accumulation of 30 years of satisfactory service in order to “encourage those in the active service to stay longer and ensure more experienced personnel are retained.”

Through the statement, the DOF emphasized the need for a periodic review of the pension benefits as officials see these benefits involving a “possible” increase of up to 1.5 percent per year. The increase shall be subjected to the evaluation of the economic conditions and actuarial life of the pension fund in order to keep up with the country’s inflation rate, according to the DOF.

According to Diokno, these pension funds shall be funded through the MUP’s contributions, with a corresponding government share, and supplemented by the proceeds from the sale or lease of MUP assets. The Finance Secretary, however, did not identify these assets.

The DOF said the MUP pension arrearages in the past few years amounted to the following: P3.7 billion in 2021, P32.6 billion in 2022, P5.2 billion in 2023, and projected to reach P4.8 billion next year.

The DOF disclosed its plan the day the House of Representatives ad hoc committee held its first hearing on the MUP pension reform bill.

Diokno emphasized through the statement that the current MUP pension system’s “dependence on full government funding exposes it to economic and fiscal downturns and compromises its stability and reliability.”

“The goal is to craft a pension system that factors in the welfare of the military and uniformed personnel in active service and retirees, while making sure it is sustainable and can withstand the test of time,” the DOF chief added.