GSIS study on MUP pensions ends soon

By Jasper Emmanuel Y. Arcalas @jearcalas

STATE-run pension fund Government Service Insurance System (GSIS) vows to complete an updated actuarial study on the military and uniformed personnel’s (MUP) pension fund by August.

GSIS Acting Executive Vice President

Jason C. Teng said the updated actuarial study on the MUP pension is crucial to the reforms being pushed by the administration’s economic team. Teng said they initially proposed to separate the MUP pension from the regular social insurance fund for all GSIS members.

“Right now, what is for sure [is that] we will have a separate accounting for the MUP. We will have a social insurance fund for the GSIS members and, if the MUP would fall under the coverage of the GSIS, a separate fund would be created for it to avert the inter-marriage of the two funds,” he said during a webinar organized last Tuesday by the Philippines Graphic, a sister publication of the BusinessMirror.

Based on the previous actuarial study conducted by the GSIS in 2019, the national government would spend about P850 billion annually in the next 20 years to finance the current MUP pension system.

During another event the same day, Finance Secretary Benjamin E. Diokno reiterated that undertaking the military pension reform would be a “game-changer” as it will open up a lot of fiscal space in the national government’s budget.

“If my numbers are right, 2024, we have allocated something like P300 billion; that’s approximately $6 billion for the military pension,” Diokno said.

“The military pension reform is part of the top priority legislative agenda of the President, concurred in by Congress and we expect this to be passed before the end of the year; and so it will have an impact as soon as January of next year,” the Finance Secretary added.

The Department of Finance (DOF) earlier announced that the GSIS would manage the MUP pension fund. The DOF also disclosed that the monthly premium of the reformed MUP pension fund would be invested by the GSIS to allow the fund to grow in order to achieve “required return of 85 percent to 90 percent of pension upon retirement” of MUPs.

The DOF said the economic team would soon provide the “computations on the net take home pay, as well as the net payout of all retirement options” of MUPs under the proposed reforms.