MANILA, Philippines - The armed forces’ Retirement and Separation Benefits System (RSBS) wants the military’s compulsory retirement age raised to 58 from 56 in line with efforts to reduce and manage the government’s pension arrears.
The RSBS also proposed amendments to some benefits given to soldiers to address concerns that the government may be spending too much on retirees’ pension.
Documents obtained by The STAR showed the proposal to raise the retirement age is part of a draft measure that seeks to amend Presidential Decree 1638, a retirement law enacted in 1979.
Presidential Decree 1638 states that upon attaining the age of 56 or upon accumulation of 30 years of active service, whichever is later, an officer or enlisted personnel shall be compulsorily retired.
Under the RSBS’ proposal, the compulsory retirement age would be 58 while the accumulated years of active service for officers would be 36. Raising the compulsory retirement age would mean less pension requirements for the government since the soldiers’ length of service would be prolonged, the RSBS said.
The RSBS also proposed that soldiers should have served at least 25 years in service before they can retire instead of the current 20 years. The provision would only apply to incoming soldiers and not to those already in service.
“Once a soldier retires after 20 years of service, given the longevity of people, he will receive pension for a long time,” RSBS president Emilio Marayag said in an earlier interview.
The RSBS’ draft proposal also called for reforms in the benefits package given to retirees.
Under the proposal, the monthly pension would be computed based on the basic pay of the rank last held by retirees and not the next higher rank.
At present, retirees’ pension is computed based on the payment of those with rank that is one step higher than the rank they last held.
The RSBS also proposed that total permanent disability benefits be given to those who die in line of duty regardless of the years of service. Currently, such benefits are given only to those with at least 20 years in service.
RSBS also proposed the cutting of the survivorship benefit to 50 percent of soldiers’ pension from 75 percent to reduce government’s obligations. Survivorship benefits are given to dependents of soldiers who died.
The proposal also allows retired soldiers who lost Filipino citizenship to receive 40 percent of their pension. At present, retirement benefits are terminated upon the loss of Filipino citizenship.
The RSBS also called for the scrapping of a provision of the retirement law that raises the benefits of retirees whenever the salaries of active soldiers are upgraded.
It proposed that pension adjustments be implemented every five years as determined by the board of the new retirement body to be named Philippine Military Pension System.
The RSBS was formed in 1973 by the late President Ferdinand Marcos to serve as a funding scheme for the payment of retirement and separation benefits to military personnel. The payments are funded by deductions from soldiers’ salary. The pension fund collected five percent of a soldier’s basic monthly pay and ensured a six-percent return upon retirement plus pension benefits.
In 2006, the RSBS announced that it is losing money as its funds were invested in low-return real estate projects and loans. RSBS, which was intended to be self-sufficient, currently subsists solely on the contributions of its members.
The national government currently shoulders the benefits given to retired military personnel. However, the amount of pension arrears is growing due to the increasing number of retirees. The government owes around P16 billion to about 112,000 military pensioners.