Instruction No. 74

THE PENSION SYSTEM BEFORE THE OCCUPATION
BY THE IMPERIAL JAPANESE FORCES

August 30, 1942

The Honorable
The CHAIRMAN OF THE EXECUTIVE COMMISSION
Manila

With reference to your letter under date of August 20, 1942, I wish to inform you, in reply, that the entire pension system has been abolished and that, therefore, no payment of whatsoever nature for pension is necessary.

DIRECTOR GENERAL OF THE
JAPANESE MILITARY ADMINISTRATION

EDITOR’S NOTE: The following is the communication referred to in the above Instruction No. 74:

MANILA, August 20, 1942

His Excellency
The DIRECTOR GENERAL
MILITARY ADMINISTRATION
Manila

SIR:

Previous to the occupation of Manila by the Imperial Japanese Forces, the former regime was maintaining the following pension systems:

Name Number of pensioners   Average individual pension   Amount of monthly pensions  
  Filipinos Americans Filipinos Americans Filipinos Americans
1. Teachers’ Retirement and Disability Fund 1,881 56 ₱54.36 ₱173.10 ₱64,208.76 ₱6,694.02
2. Health pension fund 161 4 46.04 189.16 7,412.59 756.66
3. Constabulary pension and disability fund 1,165 15 25.69 217 29,932.55 3,264.65
4. Filipino war veterans’ pension 844   26.40   22,285.75  
Total 4,051 75       ₱13,715.33

With the exception of the Filipino war veterans pensions, which were being paid from proceeds of sweepstakes held for the purpose, the benefit of the above-mentioned pensions systems were granted to retired government officials and employees who had rendered meritorious services for certain prescribed periods of time and had fully complied with other conditions provided by the laws that created the said pension systems.

Since the year 1937, the said pension funds were declared under liquidation. No new retirements with the privileges of receiving pensions were granted, but provision was made for refunding to the unretired members of the pension systems the amount they contributed with interest at 4 per cent per annum (compounded annually), together with the corresponding portion of the premiums paid by the Government in the case of the Teachers’ Retirement and Disability Fund. With respect to the members who had already retired and were receiving pensions, at first, provision was made for the payment to them of the excess, where there was any, in the amounts contributed by the said members to the pension funds over the amounts of the pensions that had been received by them, and, in the case of those who were found to have no other sources of livelihood, for the continuance of the payment of their pensions at greatly reduced rates under certain conditions. Later on, however, these pensions were restored to their original amounts.

The pension funds referred to were administered by the former Government Service Insurance System, but the investments were handled by the Agricultural and Industrial Bank, which, in turn, deposited the uninvested funds in the Philippine National Bank.

Since the occupation of Manila by the Imperial Japanese Army, payment of these pensions was stopped. As a matter of fact, pensions for December and previous months that could not be paid, or the treasury warrants for which were not cashed, before the said occupation took place, remain, up to now, unpaid.

For obvious reason, the Filipino pensioners under the pension systems above-mentioned, who are now suffering from acute financial hardships, are anxiously waiting for the decision of the Military Administration as to the policy that is to be followed with respect to their pensions.

The respective pension funds were maintained means of: (1) appropriations which were made from time to time from the General Fund; (2) contributions (premiums) from the members of the pension systems; and (3) the earnings from the investments of the unused portions of the pension funds above-mentioned are shown in the following statement:

  Teachers’ retirement and disability fund Health pension and retirement fund Constabulary pension and retirement fund Total
ASSETS:        
Current Assets ₱122,872.08 ₱24,515.03 ₱379,778.73 ₱527,165.84
Investment 8,530,448.16   63,618.00 8,594,066.16
Fixed Assets 24,267.22     24,267.22
TOTAL ₱8,677,587.46 ₱24,515.03 ₱443,396.73 ₱9,145,499.22
LIABILITIES AND SURPLUS        
Current Liabilities ₱153,197.57 ₱14,552.04 ₱357,270.25 ₱524,989.86
Deferred Credits 69,435.32     69,435.32
Reserve Surplus 7,030,103.37   29,120.00 7,059,223.37
Unreserved Surplus 1,424,851.20     1,424,851.20
Capital Surplus (Statutory)   9,992.99 57,006.48 66,999.47
TOTAL ₱8,677,587.46 ₱24,515.03 ₱443.396 ₱9,145,499.22

I am bringing this matter to the attention of Your Excellency for such consideration as may be deemed appropriate.

Respectfully,

(Sgd.) JORGE B. VARGAS
Chairman of the Executive Commission

Source: Office of the Solicitor General Library