Reasons PNP Retirees Face Financial Difficulties
There
isn’t a single task a man undertakes that can be described as simple and free
of difficulties. Undeniably, a police officer’s job is not one that anyone can
launch at any time because it involves putting more than just physical prowess
and firearms on the line.
PNP
personnel risks their lives for the commitment to serving our country. Even
their family safety is affected as well.
When
they cannot perform their duties, their pension benefits are the saving armor
of their retirement. But how come PNP retirees still struggle financially after
leaving the PNP service despite the honor and commitment they have shown to the
nation?
Though
the Financial Institutions, under the umbrella of the National Government, have
provided good benefits and life security plans to PNP personnel, several
retirees still face financial difficulties after they retire from the service.
Why
did this happen?
This
post explains why PNP retirees have trouble with money after they leave the
service and points out important factors in their retirement benefits.
Insufficient
Funds
According
to a report, the government raised the pay of active police and military
personnel in 2018 while delaying the pay increase for retirees for a few years.
As a result, the government is currently paying in installments on this, and
the process is prolonged. It will take another five years to pay the remaining 26
months fully. With this, many retirees have already died not receiving their
full retirement benefits.
Not
Every Retiree Received Compensation
Before
the Arroyo administration, the Department of Budget and Management always made
the Funds available to compensate retirees fully.
However,
before the release of this fund, rumors circulated that it would only include
PNP retirees who had paid their annual dues.
These
are all rumors without evidence, but the PNP leaders
have not provided an explanation to prevent speculation and other conspiracy
theories from expanding.
Rely
on one source of income
Most
police officers rely on one source of income, and that is the salary from their
job.
We
know that our organization focuses on public service, but it doesn’t prohibit
us from pursuing business or earning passive income as long as there’s no
conflict of interest involved. Some personnel retired from the service without
having a side hustle or what we call a “sideline” business.
There
are two types of income: active income and passive income.
Active
income is essentially when you get paid for your time—meaning
you’re exchanging your time or service for money. For example, your employment
as a police officer where you spend hours at your job. It’s active because in
order to get paid or receive your salary, it requires your work, your time, and
energy.
The
other type of income that is superior to active income that every PNP personnel
should be aware of and strive for because it allows you to make more money is
passive income.
Passive
income is the income you receive that does not involve any
further work on your part. Others would call it “earning money while
you sleep.”
Examples
of passive income are house or car rental income, investment dividends, earning
interest from the bank, and other things that require little to no effort.
It’s
no surprise that most uniformed personnel put their extra money in Armed Forces
and Police Savings and Loans Association, Inc. (AFPSLAI) because of its highest
dividend rate of 16% per year or 4% per quarter.
Follow
Robert Kiyosaki’s principle — never put your money in a bank. A great example of
this is putting your hard-earned money to AFPSLAI. AFPSLAI is not a bank but
rather a private non-bank financial institution regulated by the Bangko Sentral
ng Pilipinas (BSP).
If
you are not comfortable with AFPSLAI, other option would be digital bank that
offers highest interest rate like Maya (formerly PayMaya) with 6% interest rate per
annum and Seabank with 6% interest rate per annum.
Seabank
pays interest on a daily basis, while Maya pays interest on a monthly basis. These
digital banks do not implement a lock-in period, meaning you can withdraw your
money anytime.
In
active income, you work for money, while in passive income, money works for
you.
PNP
Retirement Benefits
The
PNP retirement benefits may affect after 20 years of service; the total monthly
pension is 50% of the retired grade’s basic salary and longevity pay. Its
percentage goes up 2.5% each year after 20, reaching a maximum of 90% for 36
years of service.
However,
there’s an exception for uniformed personnel who can choose to get retirement
pay all at once and in advance for the first five years. It will pay it in full
within six months of retirement or completion.
In
addition, it will add the PNP officers’ and non-officers pension benefits based
on the active duty wage scale. The officer is entitled to a year’s salary, a
pension equal to 80% of his last wage for life, and other benefits as provided
by law.
If
a member who retired under this section dies within five years of retirement,
his surviving lawful spouse or, if no such spouse exists, his surviving
dependent legitimate children are qualified for the pension for the rest of the
five-year insured period.
Here
are the detailed explanations of who are the legal surviving heirs of the
deceased retiree:
Surviving
Spouse
A
legal partner or spouse may claim survivor benefits for a derivative pension or
pension transfer; if they were lawfully married to the departed PNP pensioner
just before the former’s retirement or separation and have not neglected the recently
dead PNP pensioner without justification.
Other Survivors
The surviving lawful, legitimated, and legally adopted children, including any illegitimate children who are single, either under the age of majority or over the age of minority, but unable to support themselves due to a physical or mental disorder (developed before reaching adulthood), and who are not married.
Additionally,
if the surviving spouse or children are not alive, the surviving family or
parents are entitled to the claims. The surviving single siblings are allowed
to claim in the absence of the first family.
Wrapping
Up
Those
noted above are the primary reasons PNP retirees face financial difficulties
despite having adequate life insurance and substantial benefits offered during
their service.
PNP
retirees provide their all to the service throughout their lives; how come
retirees are only partially compensated for their pension benefits?
Besides
the speculations and controversies surrounding the National’s failure to
release PNP retirement benefits in 2018, many surviving families still
experience the same scenario today.
Moreover,
many retirees die without enjoying the fruits of their sacrifices because of
failure and slow disbursement of the funds from the National budget before.
For
PNP personnel who are about to retire or have opted to retire early, the remedy
(for delayed claims) is to get ready ahead of time by updating their service
records or PAIS records, breaking down their leave credits, getting clearances,
etc., so that their retirement claims can be approved and then budgeted for
DBM.
FAQs:
What
is the person’s responsibility who unjustifiably delays pension payments?
The
office may take administrative disciplinary actions against an incompetent
officer or staff member who fails or neglects to discharge a retiring
government worker’s pension, payments, or other pension benefits within the
time frames specified. Following a hearing and fair trial, the offending
officer or police officer will be paid leave for six months to a year at the
discretion of the disciplinary authority.
This
penalty does not apply if unforeseen circumstances or other unusual events
prevent the release of retirement benefits. In these cases, the thirty-day
period begins when the cause dies.
What
is the person’s responsibility who unjustifiably delays pension payments?
The
office may take administrative disciplinary actions against an incompetent
officer or staff member who fails or neglects to discharge a retiring
government worker’s pension, payments, or other pension benefits within the
time frames specified. Following a hearing and fair trial, the offending
officer or police officer will be paid leave for six months to a year at the
discretion of the disciplinary authority.
He
is entitled to one year’s salary, an entire life pension equal to 80% of his
last salary, and other compensation, in addition to other benefits specified by
law.
If
a member who has been retired under this section passes away within five years
of retirement, his surviving legitimate husband or wife, or in the absence of
one, his surviving dependent children, are entitled to the pension for the
balance of the five-year assured period.
Are
PNP employees who retire with exceptional cases eligible for a pension?
An
active civil or criminal case against a retired person does not preclude
compensation for PNP retirement benefits.
If
the authority does not suspend or resolve the case within three months of the
retiree’s retirement date, retirement benefits are released immediately,
regardless of the case’s final resolution. If a retiree’s case is being
appealed, it is legal to exempt PNP retirement benefits.