Mandatory Workers' Retirement Plans Eyed

Private sector employers will be required to pay their workers’ retirement plans once reforms in the corporate pension system are implemented by the government, the Department of Finance (DOF) said.

- Chino S. Leyco

In a statement, Finance Secretary Carlos G. Dominguez III said they are considering the Fund Managers Association of the Philippines’ (FMAP) recommendation to mandate the partial or full funding requirement of retirement plans for workers in private companies.

Dominguez’s plan comes after FMAP studies revealed that the current pension benefits for private sector employees are usually insufficient, and that the new generation of workers is at risk of receiving even smaller pensions later with the current system.

Based on the FMAP studies, the low accumulation of pension assets also limits the development of capital markets.

FMAP also warned that these issues hounding corporate pensions will become more difficult to solve.