Retirement is an issue that is close to my heart, not only because I am also a retiree, but rather because the program can be rationalized further to achieve equitable distribution of public wealth, equal apportioning of opportunities among the Filipinos and prudent disbursement of government funds.
Over the years, I’ve been wondering how much of the government’s total retirement funds paid to retirees could have been more wisely disbursed to facilitate equitable distribution of government funds, address unemployment and encourage productivity among the Filipinos.
On hindsight, the government can further strengthen its fiscal policy measures to maximize the socioeconomic impact of its retirement program by not hiring retirees. The government practice of hiring retirees deprives those in the labor pool (up for employment) of otherwise gainful jobs in the government, even as hired retirees, although already receiving monthly retirement pensions, get additional income from their salaries. This is a socioeconomic bane that hurts the unemployed and poor Filipinos the most.
As the biggest employer, the government can reduce the country’s unemployment and poverty level by spreading its employment opportunities to the most number of Filipinos, minus the retirees, of course. And hiring one person from every household, especially those with zero income, should be a good start. This would not only result in less poor Filipino families depending only on the government’s Pantawid Pamilyang Pilipino Program, but more important, this would encourage productivity among them, boost their moral as productive Filipinos and not mendicants.
Unfortunately, in most areas in the Philippines, the hiring of government workers is mostly politically influenced. And if only government hiring of workers would be rationalized and retirees are no longer employed in the government, especially government retirees who receive much higher pension from the Government Service Insurance System (GSIS) than retirees from the private sector who receive their pension from the Social Security System (SSS), the government should be able to equitably distribute its resources and opportunities.
Under the GSIS retirement program, government retirees get a monthly pension that’s equivalent to 80 percent of their average monthly salary (AMS) during the last three preceding years of service prior to retirement, while retirees from the private sector under the SSS retirement program who made 120 monthly contributions get a monthly pension of P300, plus 20 percent of the AMS credit for the 10 preceding years of service prior to retirement, and another 2 percent of the AMS in excess of 10 years, as the basis for computing the monthly pension of SSS retirees.
Considering the sensitivity and socioeconomic impact of the hiring of retirees by the government, isn’t it about time for our economic managers to take a serious look at the issue?