MANILA, Philippines — The Department of National Defense (DND) has been given ample chances to comment on the new military and uniformed personnel (MUP) pension bill, Albay 2nd District Rep. Joey Salceda said on Friday.
Salceda made this statement after being asked to react to Defense Secretary Gilbert Teodoro Jr.’s concerns about the MUP pension bill crafted by the House through the Ad Hoc Committee on the MUP Pension System which was headed by the said lawmaker.
According to Salceda, the latest version of the MUP pension bill was based on considering shared benefits and sacrifices between the government and the defense and other uniformed establishments.
“Everyone, including the DND, was given abundant opportunity to provide their comments, either through the hearings or through officially transmitted statements to the Committee,” Salceda said.
“The MUP pension reform will be based on the principle of both shared benefit and shared sacrifice. Around that principle, we can discuss the details. But we must not lose sight of that principle,” he added.
On Thursday, Teodoro released his own statement on the new MUP bill, saying that he does not “subscribe to the proposed blanket mandatory contributions for military personnel, especially for those who have already completed at least twenty (20) years of active service.”
“The President envisions a carefully transitioned introduction of any pension reform plan so that those in active service will be impacted in the least possible way. The imposition of mandatory monthly contributions without a transition phase will definitely have an impact on our soldiers,” the DND chief said.
“Second, as Secretary of National Defense, it is also incumbent upon me to look after the welfare of our military pensioners. It has been my position that their pensions and entitlements, including 100% automatic indexation, shall remain unchanged. Ensuring the non-diminution of their retirement benefits is the least we can do in recognition of their sacrifices to the country,” he added.
Last Tuesday, the panel approved a new MUP pension bill that would contain the following provisions:
- 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
Salceda’s proposal of lowering contributions by placing a cap on salary increases — which he announced moments before President Ferdinand Marcos Jr. delivered his second State of the Nation Address — was retained.
READ: House panel OKs ‘acceptable’ MUP pension bill
Salceda said that they would proceed from Marcos’ direction to find a solution to the issue.
“The constitutional implications of the reform were abundantly studied in papers from the Legal Affairs and Parliamentary Counselling units of both houses of Congress especially in the 18th Congress. We proceeded with advise from them that we are in the clear,” he said.
“The President has thrown his weight around stressing the need for a solution. We will proceed from that,” he added.
Concerns over the sustainability of the MUP pension fund were aired last May 2023 by Finance Secretary Benjamin Diokno, who said that the system needs to be reformed as it might get depleted in just five to six years.
Marcos then tasked the economic managers to find a solution to the said problem.
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