The Armed Forces of the Philippines (AFP) overpaid pension benefits by P73.11 million to dead pensioners from 2021 to 2023, the Commission on Audit (COA) reported.
In its annual audit report on the AFP, state auditors said the P73.11 million was paid to 264 dead pensioners, violating the AFP Standard Operating Procedure (SOP) No. 14 dated July 15, 2019.
At least P43 million was paid to dead pensioners in 2023, and P29.5 million in 2021 to 2022, state auditors found.
The time frame for the incorrect inclusion of dead pensioners on payrolls, COA said, lasted six to as long as 25 months or more than two years.
“Among the causes of leakage costs is because some pensioners under the age of 70 passed away after their annual updating schedule and relatives either intentionally or unintentionally, deferred informing the Armed Forces. Since updating is only required once a year, this led to the continuous receipt of benefits since the next update is required at least two months prior to the pensioner’s upcoming birthday,” COA said.
“Once the principal pensioner dies and the pension benefit is transferred to the qualified beneficiary, the principal should be deleted immediately from the pensioners’ list to reflect the accurate number of principals and beneficiaries,” COA added.
Moreover, the COA said, governing rules for pension payment under SOP No. 14 in tagging and deleting non-updating pensioners were found to be insufficient.
“The updating period required [under SOP 14] poses a significant risk for the incurrence of leakage costs due to the current policy of updating only once a year for pensioners 69 years old and below,” COA said.
“Some of the pensioners could have been deleted earlier had the AFP applied the deletion of non-updating pensioners three months after they were tagged,” state auditors added.
AFP’s response
In its response to the COA findings, the AFP said that as of the fourth quarter of 2023, the Armed Forces already operationalized a call center to validate the non-updating pensioners, which “pre-empts/minimize the continuous deposit of pensions or overpayments as well as caters to the updating of records of all pensioners.”
The Armed Forces said it also developed a system to follow up and remind pensioners, especially those who are updating their information.
Further, the AFP stated recovery procedures for overpayments or those amounts paid to dead pensioners.
As for the SOP 14, the AFP said it quarterly and consistently reviewed the policy in recognition of “the importance of revising the frequency of updating of status of the pensioners.”
Unlike other workers in the public and private sector, the AFP said, military personnel do not contribute a single peso for their future pension fund since this is provided in the annual national budget.
Underpayments, overpayments
In the same COA annual audit report, state auditors also called out the military’s inaccuracies in its Pension Management Information System (PenMIS).
“Inaccurate PenMIS information and misapplications of pension laws negatively impacted the reliability of pensioners’ payrolls resulting in incorrect monthly pension payments to 52 pensioners,” COA said.
“We audited the monthly pension benefits of 2,281 military pensioners with the rank of Colonel on both optional and compulsory retirement and the corresponding grade of O6 with a base pay of ?80,583.00 based on Joint Resolution No. 1-2018 dated January 1, 2018. Re-computation revealed overpayments to 14 pensioners and underpayments to 38 pensioners,” COA added.
The overpayment to 14 pensioners reached P827,213. On the other hand, 38 pensioners were underpaid by P3.4 million.
“Pensioner retirement information in the PenMIS does not correspond to the pension amount being received, thereby resulting in errors in the computations of monthly pension benefits. Integral data such as retirement rank, base pay, pay grade, longevity, and length of service, among others, need to be corrected and/or updated to provide accurate and reliable amounts,” COA said.
For its part, the military said that upon review of retirement information and retirement/ separation orders, 84 pensioners were found to be underpaid, while 11 were overpaid.
It said that it corrected the monthly pension benefits of affected pensioners and conducts validation if overpayment/ underpayment is made.
Lastly, the military agreed to the following COA recommendations:
- verify the retirement information of affected pensioners against their retirement/ separation orders and conduct regular cross matching with various concerned offices to update/ correct pensioner’s information in the PenMIS; and
- make necessary corrections to the monthly pension benefits of affected pensioners, consult on the required steps to recover overpayments, and provide corresponding reports for recording.
— VDV, GMA Integrated News
