House ad hoc panel approves MUP pension fund reforms

From the Philippine News Agency (Aug 15, 2023): House ad hoc panel approves MUP pension fund reforms (By Filane Mikee Cervantes)

TO SERVE AND PROTECT. At least 80 rookie police officers take their oath during the 1st Cycle Attrition Recruitment Program at the Police Regional Office-Soccsksargen headquarters in General Santos City on Nov. 14, 2022. The government will have a bigger share under the proposed reforms to the military and uniformed personnel pension system, the Department of Finance said. (Photo courtesy of PRO-12)

MANILA – A House ad hoc committee on Tuesday approved a substitute bill seeking to reform the pension system for military and uniformed personnel (MUP) that would be acceptable to all stakeholders.

Speaker Martin Romualdez commended the Ad Hoc Committee on the MUP Pension System after he was informed that all stakeholders, including the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP), were satisfied with the provisions of the approved substitute bill.

“Salamat sa House Ad Hoc Committee, makakatulog na nang mahimbing ang mga military at uniformed personnel natin, gayundin ang kanilang mga pamilya. Sigurado nang mababayaran ang lahat ng pensyon nila, may dagdag pa silang sweldo taun-taon (Thanks to the House Ad Hoc Committee, our military and uniformed personnel, as well as their families, will now be able to sleep soundly. It's guaranteed that all of their pensions will be fully paid and there would be salary increases every year),” he said.

Among the salient provisions that were agreed upon during the hearing include 90 percent maximum retirement package based on base pay of all MUP, raising by 5 percent the previous package for AFP personnel, PNP personnel who served below 20 years will be eligible for separation lump sum, and fixing to 57 year old the age of retirement of all MUP.

Other important provisions include guaranteed 3 percent salary increase annually of all MUP, two separate pension management systems--one for AFP and one for civilian uniformed personnel; 50 percent indexation for MUP; and creation of a window in the pension fund system for disadvantaged pensioners.

"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," Romualdez said.

He said the proposed reforms show that the House not only prioritizes the well-being of MUPs, but also ensures the country's 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 added.

Albay 2nd District Rep. Joey Salceda, chair of the Ad Hoc Committee on the MUP Pension System, said the approved substitute bill is a "win-win solution" because the risks of sudden spikes in pension liabilities are removed, while also ensuring that salaries and pensions increase at "manageable levels".

"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," he said.

Salceda pointed out that this development is also a win for the active personnel who will get a salary increase every year for the next 10 years, considering that the salaries have only increased nine times for the past 25 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," he said.

Salceda said another agreed-upon provision is the "phased in contribution" of 5 percent for the first three years, 7 percent for the next three years, and 9 percent thereafter for active personnel; while new entrants will contribute 9 percent of their base and longevity pay for their pension.

He, however, noted that there will be a larger government counterpart contribution to complete the 21 percent contribution.

This means that the government will contribute 16 percent for the pension of those in active service during the first three years, 14 percent during the fourth to sixth year, and 12 percent for the seventh year and onwards. Government contribution for new entrants will be at 12 percent.

Salceda said the economic managers went through dozens of consultations, and that the Ad Hoc Committee ensured that all the statements and comments of the various services were heard.

"Let me reiterate the Three Guarantees of this reform: guaranteed salary increase, guaranteed pension indexation, (and) guaranteed funding sources for the pension. This is on top of the President's commitment to resolve all arrears to pensioners," he said.

Salceda said the House is committed to approving its version on third reading "as soon as possible".

https://www.pna.gov.ph/articles/1207848