House of Representatives. INQUIRER FILE PHOTO
MANILA, Philippines — After almost three hours of deliberation, a House ad hoc committee approved on Tuesday a substitute bill on pension reforms for military and uniformed personnel (MUP) that includes provisions for a special assistance fund for indigent retired MUP as well as uniform rates for lump sum benefits.
It also called for MUPs to contribute 5 percent of their basic pay for the first three years, 7 percent for the next three years, and 9 percent after that for those in active service, while new entrants would contribute 9 percent of their base pay.
The government, on the other hand, would also contribute to complete the 21 percent contribution for MUP pensions.
Albay Rep. Joey Salceda, who chaired the panel, said the unnumbered bill was acceptable to all the stakeholders, adding that committee members “agreed in principle on an MUP pension reform that is amenable to both the military and uniformed services and to the economic managers.”
“We can already see the light at the end of this fiscal tunnel. The uniformed services accepted. The economic managers also see the substantial improvement this formula makes over the current system,” he said in a separate statement.
Among the bill’s provisions were retaining the existing provision of allowing MUPs to retire one rank higher, fixing the mandatory retirement age of MUPs at 57 years old and creating two separate trust funds—one for the military and one for nonmilitary uniformed personnel.
Special fund for indigents
Also included were a uniform 90 percent of longevity pay plus base pay for a lump sum benefit upon separation for those who served for less than 20 years, a uniform multiple of 1.0 times years of service for a lump sum benefit upon retirement and a guaranteed 3 percent annual salary hike for MUPs for 10 years.
Salceda also proposed the creation of a special aid fund for indigent MUP pensioners as he cited data, which showed that around 70 percent of retirees had to find new jobs or establish businesses afterward.
The MUP pension reform bill is a priority measure that President Ferdinand Marcos Jr. stressed in his State of the Nation Address in July. Salceda initially questioned the Department of National Defense’s preference for a separate trust fund for the military, saying it might lead to different investment principles and benefits for MUPs.
“If you have two trust funds …, the other one is well-managed and the other one is not and therefore can give more benefits and the other one cannot, then we will come back here again,” he said.