House approves MUP pension system in final reading

File photo
File photo

THE House of Representatives approved in third and final reading on Tuesday morning, September 26, 2023, the consolidated proposed measure seeking to reform the pension system for military and other uniformed personnel (MUP).

Approved was House Bill 8969, or “An Act creating a sustainable framework for the pension system of the military and uniformed personnel, providing mechanisms for the disposition of government assets for the purpose, and appropriating funds therefor,” with 272 “yes” votes, four against and one abstention.

The measure, which was principally authored by House Speaker Martin Romualdez, guarantees three percent annual salary increase for MUP for the first 10 years from the time the proposed law takes effect.

It also rationalizes the system of granting monthly pension and other benefits to personnel of the uniformed services in a way that is beneficial to them as well as with the National Government.

"This landmark legislation demonstrates our unwavering commitment to the men and women in uniform, who risk their lives daily to maintain peace and order. It provides a robust, sustainable, and fair pension system that recognizes their invaluable service to our nation," Romualdez said.

"With this reform, we're not only prioritizing the well-being of our MUP but also ensuring the country's economic stability. It is a testament to our commitment to national security and fiscal responsibility. I congratulate the Ad Hoc Committee and my colleagues for their hard work and dedication towards this pressing issue," he added.

MUP refers to personnel from the Armed Forces of the Philippines (AFP), Bureau of Fire Protection, Bureau of Jail Management and Penology, Philippine Coast Guard, the Philippine Public Safety College, the Bureau of Corrections, and the Philippine National Police and commissioned officers of the hydrography branch of the National Mapping and Resource Information Authority who were transferred from the Bureau of Coast and Geodetic Survey.

Under the bill, the mandatory retirement age for MUP will be changed to 57 instead of 56 or upon accumulation of 30 years of active service, whichever comes later. They may also voluntarily retire after 20 years of service.

For key officers, retirement is upon completion of a tour of duty or upon relief by the President.

Those killed or wounded in action that results in total disability will be considered compulsory retired for purposes of computing their benefits.

Their retirement pay is computed at 90 percent of their base pay plus longevity pay, regardless of years of service.

Monthly retirement pay of those who are already in active service before the enactment of the law shall be 50 percent of the base pay.

They will also receive longevity pay of the grade next higher to the salary grade they last held in case of 20 years of service, increasing by 2.5 percent for every year of service beyond 20 years to a maximum of 90 percent for 36 years of service and over.

For new entrants, or those who entered or re-entered the service after the enactment of the proposed MUP pension law, retirement pay will be 50 percent of their base pay, plus longevity pay in case of 20 years of service, increasing by 2.5 percent for every year of service beyond 20 years to a maximum of 90 percent for 36 years of service and over.

Retiring MUPs may receive in advance in one lump sum his retirement benefits for 36 months and get his monthly pension after three years, or receive his pension as it accrues after his retirement.

It also mandates the automatic indexation of the pension of retired MUP and survivorship pension at a rate not exceeding 100 percent of the increase in the base pay of active MUP holding the same rank during the same year.

Under the MUP pension system act, two MUP trust funds will be created in which one for the AFP and another for uniformed personnel services.

The MUP trust fund committee will be chaired by the secretary of finance for the administration of the funds.

The Government Service Insurance System (GSIS) will be designated as manager of the trust funds.

Funds will be sourced from the mandatory monthly contributions from new MUP entrants at the rate of nine percent of their salary, with the National Government contributing 12 percent, augmentations from unprogrammed appropriations in the annual national budget, proceeds from lease, joint development and disposition of government properties, and government savings.

The trust funds will be exempted from all taxes assessments, fees, charges, or duties of all kinds.

“The MUP pension bill punishes the commission of fraud, falsification, misrepresentation of facts, collusion or any similar anomaly in the issuance of any certificate or document for any purpose connected with the proposed law with a fine of not less than the amount defrauded but not more than three times such amount, or imprisonment of six months and one day to six years and perpetual disqualification from holding public office and practicing any profession licensed by the government,” said Romualdez.

President Ferdinand Marcos Jr. said reforms on the MUP pension are aimed at preventing possible “fiscal collapse.” (SunStar Philippines)


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