House OKs revised MUP pension bill on 2nd reading
MANILA, Philippines — A revised version of a bill that seeks to resolve issues with the military and uniformed personnel (MUP) pension system has been approved by the House of Representatives on second reading.
During the session on Tuesday, House Bill (HB) No. 8969, or the proposed Military and Uniformed Personnel Pension System Act, was approved via viva voce or voice voting.
The bill was approved while the House Committee on Appropriations was preparing for the budget deliberations at the plenary level.
But before the bill passed through the second reading, there were several amendments introduced by Iloilo 5th District Rep. Raul Tupas and Santa Rosa City Rep. Dan Fernandez.
Tupas heads the House committee on national defense and security, while Fernandez is chairperson of the committee on public order and safety.
One of the key amendments mentioned was the placement of mandatory contributions only on new entrants, which shall provide nine percent of their monthly salaries as a contribution to the pension fund, while the government provides the remaining 12 percent.
President Ferdinand “Bongbong” Marcos Jr. initially tasked House Speaker Ferdinand Martin Romualdez and Albay 2nd District Rep. Joey Salceda to find a solution to the MUP pension mess after concerns were raised last May 2023 by Finance Secretary Benjamin Diokno, who said that it might be depleted in just five to six years.
Salceda was appointed chairperson of the ad hoc committee that handled crafting HB No. 8969, which consolidated 12 other bills.
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.
With the present bill, the pension of MUPs in service would be generated from other funding sources. Originally, HB No. 8969 proposed a phased-in method — which means there would be a gradual increase in the current MUPs’ contribution from their salaries, initially at five percent for the first three years, seven percent for the next three years, and nine percent thereafter.
The three percent salary increase cap however remains part of the bill.
Among provisions inserted in the committee’s version of the bill are the following:
- 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 said in a statement hours after the bill was passed that he was thankful to the MUP and their respective agencies for understanding the need for a reform
“I thank the MUP agencies for their steadfast support during the plenary deliberations and for agreeing with the Committee and the economic managers on the need to move forward for fiscal improvements to the system,” he said.
“There is no longer any debate between the MUP agencies and the economic managers that we need this reform. There is also no debate that the military and uniformed personnel deserve some degree of retirement protection from the state they protect. This consensus bill hurdled the House because it is fiscally, politically, and morally acceptable,” he added.
Salceda also assured Defense Secretary Gilbert Teodoro Jr. that his requests have been accommodated.
“We have also accommodated the request of the Secretary of National Defense, and he is now more or less satisfied. I trust that the AFP will be true to its word in contributing assets to the AFP Pension Trust Fund. I especially look forward to having the assets of the RSBS infused right away,” Salceda said.
“The Speaker gave us three imperatives: Guarantee a salary increase, guarantee pension funding sources, and guarantee pension increases according to the needs of our pensioners. We have satisfied those imperatives. I thank Speaker Romualdez for his trust and confidence,” he added.