The House of Representatives approved the proposed reform in the pension system for military and other uniformed personnel (MUP) with 272 affirmative votes, four negative votes, and one abstention on third and final reading.
Aside from reforming the pension benefits, House Bill 8969 also includes a provision for a 3% salary increase every year for 10 years.
Speaker Ferdinand Martin Romualdez said the proposed law rationalizes the system of granting monthly pensions and other benefits to personnel of the uniformed services in a way that is fair to them and 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.
The proposed MUP Personnel Pension System Act sets the mandatory retirement age at 57 years, or upon accumulation of 30 years of active service, whichever comes later. MUP may voluntarily retire after 20 years of service.
For key officers, their retirement is upon completion of a tour of duty or upon relief by the President.
MUP killed in action or wounded in action resulting in total disability as certified by their respective services shall be considered compulsorily retired for purposes of computing their benefits.
The proposed MUP pension law further provides that for those already in active service before the enactment of the measure, their monthly retirement pay shall be 50% of the base pay and 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% for every year of service beyond 20 years to a maximum of 90% for 36 years of service and over.
The retiree has the option to either receive a lump sum of their retirement benefits for 36 months and commence their monthly pension after three years or receive their pension as it accrues immediately after retirement.
In the case of MUPs killed or wounded in action resulting in total permanent disability, retirement pay is computed at 90 percent of their base pay plus longevity pay, regardless of years of service.
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% of their base pay plus longevity pay in case of 20 years of service, increasing by 2.5% for every year of service beyond 20 years to a maximum of 90% for 36 years of service and over.
The pension of retired MUP and survivorship pension of qualified survivors shall be automatically indexed at a rate not exceeding 100% of the increase in the base pay of active MUP holding the same rank during the same year.
The proposed law also creates two trust funds– one for the Armed Forces of the Philippines and another for other MUP. An MUP trust fund committee chaired by the secretary of the Finance department will administer the funds.
It designates the Government Service Insurance System (GSIS) as the manager of the trust funds.
Financing sources for the trust funds shall include mandatory monthly contributions from new MUP entrants at the rate of 9% of their salary, with the national government contributing 12%, augmentations from unprogrammed appropriations in the annual national budget, proceeds from lease, joint development and disposition of government properties, and government savings.
MUP trust funds will be exempt from all taxes, assessments, fees, charges, or duties of all kinds.