Senate panels OK bill aiming to reform MUP pension system

The Senate building at the GSIS Complex in Pasay City. (Photo by LYN RILLON / Philippine Daily Inquirer)

MANILA, Philippines — A bill seeking to reform the current military and uniformed personnel (MUP) pension system finally got approval from four Senate committees.

Senate Bill No. 2501, which provides for a “new separation, retirement and pension system” for the MUP, was contained in Committee Report 173 released Thursday by the Senate committees on national defense, government corporations and public enterprises; ways and means; and finance.

The approved bill mandates, among others, that new entrants of the MUP contribute portions of their monthly base pay and longevity pay as a personal share to their pension funds.

“[For AFP Trust Fund,] military personnel shall contribute 7 percent of their base pay and longevity pay as personal share and the national government shall contribute 14 percent as its counterpart share,” the report reads.

“[For Uniformed Personnel Trust Fund,] uniformed personnel shall contribute 9 percent of their monthly base pay and longevity pay as personal share and the national government shall contribute 12 percent as its counterpart share,” it adds.

These mandated contributions will be used to fund the Uniformed Personnel Trust Fund and the Armed Forces of the Philippines  (AFP) Trust Fund.

Both of these trust funds are created for the budgetary support and payment of separation, retirement, pension, survivorship, and other benefits granted to MUPs.

READ: ‘Shared sacrifice’ underpins MUP pension bill, says lawmaker

These trust funds are designated to be managed by the Government Service Insurance System (GSIS).

“Both Trust Funds are separate and distinct and would not be commingled with the GSIS funds. The GSIS shall not advance funds and grant any form of loans to the Trust Fund Committees from the GSIS administered funds,” the committee report states.

READ: House approves MUP pension bill on final reading

The panels likewise push for setting the retirement age for uniformed services to 57 years old. Other salient features of the joint panel report are as follows:

• Active members shall benefit to the increase to a maximum of 90 percent rate of retirement pay for having compulsorily retired by reason of having served 36 years of active duty and over and having been declared compulsorily retired by reason of total disability.
• The bill provides for guaranteed annual adjustment in the base pay of active Military and Uniformed Personnel of 3 percent for the next 10 years from the effectivity of the measure.
• The bill ensures the issuance of medical insurance to the retired Military and Uniformed Personnel, who entered the service after the effectivity of the Act, upon their compulsory retirement.