By Elijah Joseph C. Tubayan
Reporter

THE GOVERNMENT eyes to have the military pension contributory by next year, the Budget chief said.

“We plan to address that by next year. We will have a solution not later than middle of this year,” Budget Secretary Benjamin E. Diokno said in a press briefing yesterday.

Asked whether military pension will now be contributory by then, he said: “We will make sure.”

The new scheme will mandate new recruits to contribute to their own pension, while those already under the current scheme will be untouched.

Currently, taxpayers pay for military and uniformed personnel’s pension. It is also indexed to the salaries of those troops active in service, meaning an increase in salaries would have a corresponding increase in the pension.

The country’s economic managers flagged this as a fiscal risk in the Development Budget Coordination Committee 2017 Fiscal Risk Statement.

He also floated the option to “buy out” in lump sum the retiree’s total pension in a period of time, to avoid the increase in cost from possible military salary hikes in the future.

Mr. Diokno said they may tap the Government Service Insurance System (GSIS) to manage the new pension fund for the military, but this would require a capitalization of about “P9 trillion.”

“I think you cannot avoid infusing government funds to make it attractive. [GSIS] is the logical body. But you have to make a distinction between civilian employees and military employees,” he said.

Mr. Diokno said earlier that the move would require legislation.

Payments last year for military pensions stood at P90 billion, or about two-thirds of the Department of National Defense’s P134.29-billion budget that year.

Mr. Diokno said they will be looking at entering into joint ventures with private firms in military properties to partially fund the required fund.

He said earlier the government wouldn’t compromise its P8.4-trillion infrastructure spending plan.

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