PENSION GAP: CREATING A PRIVILEGED CLASS OF RETIREES

 

It was a triple whammy for me.

I got a private message lately from a friend in college who kept me posted on the dire medical condition of another college friend – he is undergoing dialysis twice weekly and is already blind due to his illness. That’s the first whammy.

Having sought my help financially, my friend, no doubt, has boosted my self-worth. But truth be told, I am a retiree who can’t afford to cut out a bit from my monthly pension – not even enough to sustain my living expenses. Thanks to my wife who retired from her banking job with a generous retirement package. Thus, sad to say, I could not financially help my sick friend. That’s the second whammy.

For my over two-decade work in a company as a civil engineer, I belong to the SSS class of retirees averaging a measly monthly pension of P4,528. Measly because GSIS retirees average a relatively higher P13,600. Yet, it’s no biggie compared to the yawning gap put up for the special class of military and uniformed personnel (MUP) retirees averaging a P40,000 monthly pension. As such, here’s the latest summation fanning out in social media describing such a gap – unfair and unjust. I thought I could have helped my sick friend, in one way or another, had I gotten a bigger pension. That’s the third whammy.

If you’re a typical retiree, you’ll find the phrase “unfair and unjust” too apt after you read the following story among other similar stories on social media.

TEACHER’S STORY

During a family reunion, a teacher met her cousin – an MUP retired general – who boasted about his luxurious lifestyle and his lavish travels around the world. He said he was receiving a monthly pension of almost P200,000, which was equivalent to his last salary. He also said he did not have to pay any contribution to his pension, and that he retired at 56 years old. He said he was lucky to be part of the MUP, enjoying the best retirement benefits in the country.

(At this point, I recalled DBM Secretary Benjamin Diokno who said, “The pension system for the military and uniformed personnel in the Philippines is one of the most generous in the world.” A compliment? Economist Solita Monsod said it in another way, “The pension system is a ticking time bomb.”)

Let me go on with the story. The teacher was shocked and outraged by what the general said. She was teaching for 30 years in a public school. She had to pay monthly premiums to GSIS for her pension. She waited until she was 65 years old to retire. She has to live on a modest budget and save for her future. She felt there was something wrong and unjust with the system.

She was right that something was wrong. The MUP do not contribute a single cent to their pensions, unlike other government workers (GSIS and SSS members). The MUP can retire after 20 years of service, regardless of their age, and they are automatically promoted to one rank higher upon retirement. MUP’s pensions are indexed to the base pay scale of those in active service – an increase in the incumbent MUP position means a corresponding increase in the retiree’s pension.

She was not wrong, in speaking of the unjust system. For 2023 alone, Inquirer columnist Joel Ruiz Butuyan reported that “our government had to allocate a whopping P273 billion to fund the pension and gratuity fund for MUPs. The number of retired MUP personnel is 137,549 as of the first quarter of 2023. Contrast this to the P224 billion disbursed by the SSS for the pension, retirement, and other benefits of 3.36 million pensioners and members of the private sector in 2021.”

Butuyan added that such MUP’s P273 billion pension benefits are bigger than the 2023 budget of the DSWD’s P199 billion or DOH’s P209 billion. More so, MUP’s P273 billion is bigger than the AFP’s 2023 operating expenditures and capital outlays of P110 billion.

By and large, the MUP pension package is unequal and unjust. First, it creates a disparity and discrimination between the MUP and the other government workers in terms of retirement benefits. Second, it violates the principle of justice and fairness by creating a privileged class of MUP retirees. Third, it poses a fiscal challenge for the government and a burden for the taxpayers since the MUP pension package is unsustainable and unaffordable in the long run, as it consumes a large chunk of the national budget that could be used for other social services or development programs.

The total payouts shall breach the P1 trillion mark by 2025 from P213 billion this year. Here’s Diokno’s warning: An imminent government fiscal collapse if no reforms are instituted.

WHAT CAN BE DONE?

Implementing a comprehensive pension reform that will ensure equity, fairness, sustainability, and adequacy for all government employees is the way of solving this problem with the following measures, among others:

1.    Applying a uniform retirement law for all government workers regardless of their sector or rank with a common set of eligibility criteria, benefit computation, and contribution scheme for all retirees.

2.    Removing the automatic indexation of pension to the base pay scale of those in active service which is vulnerable to political manipulation and fiscal instability.

3.    Requiring mandatory contributions from the MUP and other government workers for their pensions for an equitable and sustainable pension system.

HOW DID WE GET HERE?

 The following statements let the cat out of the bag that speaks volumes:

“[It was] put in place many years ago and built up… to reduce the chances that restive military officers would perhaps take affairs into their own hands and stage coup d’ etats.” (Inquirer Editorial)

“[B]ecause former president Duterte doubled the base pay of active MUPs, to reportedly endear himself with military and police personnel, and despite opposition from his economic team.” (Butuyan)

Teaching Moment. The mind of an economic team is no match for the power of authoritarianism – the blind submission to authority. As part of the team, Diokno’s dilemma then could be likened to former Trump press secretary Stephanie Grisham who said (a day after a New York civil court found Trump sexually abused writer E. Jean Carrol in the 1990s) that she witnessed first-hand Trump’s alleged sexual harassment. She has been criticized for not having done something consequential about it then, but wrote it instead in her published White House tell-all book.

No doubt, this is another blot on the escutcheon of Former President Rodrigo Roa Duterte (FPRRD)’s legacy besides the drug war under the International Criminal Court’s probe and the Pharmally scandal.

This pension crisis may further disfigure in defining his legacy, and fate may not be kind to him. Stephen Covey author and educator once said,

“People will forgive mistakes, because mistakes are usually of the mind, mistake of judgment. But people will not easily forgive the mistakes of the heart, the ill intention, the bad motive, the prideful justifying cover-up of the first mistake.”

Sociologist Randy David’s words may sound benign when he says, “The fat pensions of MUPs are a form of inequality that is unfair and unjust.” The outgrowth, however, could be creeping and malignant – widespread resentment. A totalitarian tool FPRRD himself operated with ease during his previous presidential campaign against the opposition, resentment is a two-edged sword that could take issue with him this time – a typical case of tasting a dose of his own medicine.

Monsod has sounded the alarm, “If it is not reformed, it will eventually collapse, and it will have a devastating impact on the lives of millions of Filipinos, including MUPs themselves.” That reminds me of this passage from the Bible: “[A] fool… built his house on the sand. The rain poured, the rivers flooded, and the wind blew against that house, and it collapsed…” (Mt. 7:26-27)

It’s a befitting passage to conclude this Sunday’s article and a good reminder to our nation’s top leaders.

Have a blessed Sunday!

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