Military Pension Fund Misappropriation: Over 7,210 Deceased Pensioners Received PHP 615 Million from the Armed Forces of the Philippines
Armed Forces of the Philippines Addresses Pension Overpayments to Deceased Pensioners
The Commission on Audit (COA) has highlighted a long-standing issue in the Armed Forces of the Philippines (AFP) – pension payments made to deceased pensioners. In a report released on December 1, 2024, the COA revealed that over P615.64 million had been paid to 7,210 deceased pensioners from 2014 to 2023.
The AFP's Pension and Gratuity Management Center (AFPPGMC) is responsible for maintaining the pensioners' database. During the audit year, the AFPPGMC updated 168,242 pensioner records, which was over 20.32% of its target of 139,832 accounts. However, the report also noted that 193 dead pensioners were paid pensions six to 15 months after their recorded deaths in 2022, totaling P55.706 million. In 2023, 66 dead pensioners continued to receive pensions six to nine months after they died, totaling P13.87 million.
To address this issue, the AFP is implementing a robust monitoring and recovery system. The AFP Pension Recovery Overpayment Monitoring System, a digital initiative, is designed to detect and track overpayments in pension disbursements, including payments to deceased pensioners. This system would enable early identification of erroneous or fraudulent pension payments, providing data for action.
The AFP is also enhancing its coordination with the Philippine Statistics Authority or the Civil Registrar to receive timely death notifications. Periodic verification against updated death registries and internal audit checks can minimize errors. The COA suggests a thorough audit and reconciliation of pension payments to identify and quantify overpayments, enabling precise determination of amounts to recover.
Once overpayments are identified, the AFP should initiate formal recovery proceedings through administrative claims or legal actions to reclaim funds paid to deceased pensioners. Clear policies on repayment terms and possible waivers for hardship cases can guide this process. Adoption of strict financial controls and real-time stop-pay mechanisms once death verification is received can prevent future payments.
The COA also identified systemic issues and the actions of relatives of pensioners as causes of the problem. Some pensioners under the age of 70 passing away after their annual updating schedule and relatives either intentionally or unintentionally failing to inform the AFPPGMC contribute to the issue. The COA identified the need for frequent follow-up validations of pensioners who fail to update their records.
The AFP's pension issue has been a long-standing problem in government. In 2011, Aquino's budget chief warned that "crisis looms in the military pension system" because pension spending was estimated to outpace spending for salaries of those actively in service. In 2022, spending for pensions outpaced the military's maintenance, operating expenses, and capital outlays.
Former budget chief Jose Diokno announced plans to stop the continued increase in military and uniformed personnel's pension and make active duty military and uniformed personnel contribute to a pension system under President Marcos. However, this proposal met with pushback, including from Defense Secretary Gilberto Teodoro Jr.
The COA stated that the accumulated excess payments throughout the years deprive the government of beneficial use of funds and affect the fairness of the presentation of the financial statements. The AFP's efforts to address this issue are crucial in ensuring the fair and efficient use of government funds.
- The issue of pension overpayments to deceased pensioners in the Armed Forces of the Philippines (AFP) has been exacerbated by factors linked to both business (pension spending outpacing salaries of active personnel) and politics (opposition to proposals for pension reform).
- To mitigate the financial implications of this situation, it is essential for the AFP to strengthen collaboration with general-news entities, such as the Philippine Statistics Authority or the Civil Registrar, to ensure timely death notifications and implement robust monitoring mechanisms to recover overpayments in the pension disbursement process.
