Newly appointed Defense chief Gilbert Teodoro Jr. on Wednesday bared President Ferdinand Marcos Jr.'s "first marching order" for him, which is the continuation of the reform on the military and uniformed personnel (MUP) pension system.
“The first marching order of the President to me is to work with our legislative partners and the AFP to continue the work of [Defense chief Carlito Galvez Jr.] and [Finance Secretary Benjamin Diokno] to find a sustainable MUP scheme,” he said at a press conference.
“A self-sustaining pension system scheme needs time. You need to build up the fund, and we will need to find sources in order to raise capital for the fund, and we need to grow the fund, so it takes time,” he added
In a separate interview on ANC, Teodoro commended Galvez and Diokno for working together for the MUP pension reform.
Asked about his possible contribution to the process, Teodoro said he would review the proposed adjustments to ensure that the new pension system would be self-sustaining.
Teodoro said he would see to it that prudential standards are in place in the governance of funds and that the people in charge would conform to the "fit and proper rule" that the Bangko Sentral ng Pilipinas imposed on bankers.
"You know that is a lot of risk in order to grow the fund. You need to take some risks, but it should be balanced by prudential standards too," he said.
The proposed reform on the MUP pension includes the removal of automatic indexation in pension and the imposition of mandatory contributions on military personnel.
On the concerns of some lawmakers that the adjustment might demoralize personnel and affect the recruitment rate, Teodoro said the job is still attractive considering the non-monetary benefits.
He also said that the financial burden due to the possible contribution is minimal compared to other jobs.
"I think that if it is the least financial disruption for them as possible, the military is still a very, very attractive career option for them because there are a lot of non-monetary benefits," he said.
"And the financial burden on them would be minimal compared to perhaps other private sector employees," he added.
According to Teodoro, uniformed personnel would understand the need for a reform considering the depletion of financial resources.
In March, Diokno said Marcos Jr. is "okay" with the proposal to reform the pension system for the MUP, as he warned that failure to address the ballooning cost of pensions for retirees could lead to a "fiscal collapse."
But in May, Galvez said Marcos Jr. is also "very much concerned" about the impact of the proposed new pension system on the morale of soldiers and policemen. —VAL, GMA Integrated News