Albay 2nd District Rep. Joey Salceda, shown in this file photo taken in July 2023 at the Kapihan sa Manila Bay, heads Ad Hoc Committee on the Military and Uniformed Personnel (MUP) Pension System. (File photo by RYAN LEAGOGO / INQUIRER.net)
MANILA, Philippines — The ad hoc committee created by the House of Representatives to resolve issues hounding the military and uniformed personnel (MUP) pension has approved a revised bill presenting a system that would be acceptable to all parties concerned.
After the hearing of the Ad Hoc Committee on the Military and Uniformed Personnel (MUP) Pension System on Tuesday, Albay Rep. Joey Salceda, who heads the panel, said that the formal solution to the MUP pension issue had been agreed upon in principle.
The concerns over the MUP pension were raised last May 2023 by Finance Secretary Benjamin Diokno, who said that the system would need reforms as it might be depleted in just five to six years.
Initially, there were calls for MUPs to contribute to the pension fund, but several senators warned that this may lead to the early retirement of officials.
“We are pleased to report to the president and to the public that, today, we have formalized a solution to the MUP Pension problem. The members of the Ad Hoc Committee on the MUP Pension System have agreed in principle on an MUP Pension Reform that is amenable to both the military and uniformed services and to the economic managers,” Salceda said.
“This is a win-win solution because we are removing the risks of sudden spikes in pension liabilities while also ensuring that salaries and pensions increase at manageable levels,” he added.
According to Salceda, the following provisions — like his previous proposal of a cap on the MUP personnel’s salary increase per year and the personnel’s contributions — have been retained in the substitute bill:
- retention of promotion to one rank higher upon retirement
- uniform 90% of longevity pay plus base pay for lump sum benefit upon separation below 20 years in service
- uniform multiple of 1.0 multiplied by the years of service for a lump sum benefit
- guaranteed 3% annual increase in salaries for 10 years
- indexation of pensions to 50% of adjustment in pay
- creation of a window for indigent pensioners under the trust funds
- regular reports compliant with International Financial Reporting Standards every three years for the pension system
- phased-in contribution
According to the proposal, personnel of uniformed services like the Armed Forces of the Philippines, the Philippine National Police, the Philippine Coast Guard, the Bureau of Jail Management and Penology, and the Bureau of Fire Protection will be asked to contribute 5 percent for the first three years, 7 percent for the next three years, 9 percent thereafter for active personnel.
New entrants will immediately contribute 9 percent, but the government would still contribute a larger share to complete the 21 percent contribution.
Salceda assured the MUPs that the heads of the active services had been consulted during the hearings.
“For the past 25 years, the salaries have only increased for nine years, so this is also a win for the active personnel, who will get a salary increase every year for the next ten years. We are also ensuring that all the MUP services will get a separation benefit if they leave the service below 20 years in service. That is a new benefit to the PNP,” Salceda said.
“The economic managers went through dozens of consultations, and we have also ensured that we hear the statements and comments of the various services. We also sought the acceptance of the various services before moving to approve the measure,” he added.
Speaker Ferdinand Martin Romualdez meanwhile commended Salceda and the rest of the committee for finding a solution to the issue.
“Thanks to the House Ad Hoc Committee. Our military and uniformed personnel and their families can now sleep soundly. Now there’s an assurance that all their pensions would be paid — and they also have a salary increase every year,” Romualdez said in Filipino.
“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,” he added.
According to Romualdez, the work of the ad hoc committee ensures that the country’s national security and fiscal state would remain stable.
“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 for their hard work and dedication towards this pressing issue,” he noted.
Last July 24, on the eve of President Ferdinand Marcos Jr.’s second State of the Nation Address last July 24, Salceda said that they already had a good solution for the MUP pension woes.
Salceda said that the House would propose a 5-percent cap on the yearly salary increases of MUPs to ensure that the still-unfunded pension liabilities would go down from P9.7 trillion to just P3.6 trillion — which is more manageable.
Last Aug, 2, Romualdez confirmed that a meeting of economic managers and lawmakers took place so that they could arrive at a consensus on the MUP. Afterwards, Salceda was appointed at the plenary to head the committee.