Jinggoy endorses MUP reform bill; only new entrants will contribute

(BUSINESS MIRROR) THE Senate is on track to frontload passage of awaited remedial legislation introducing reforms in the military and uniformed personnel pension system.

Senator Jinggoy Estrada, chairman of the endorsing Senate Committee on National Defense, clarified at the outset that in reforming the military and uniformed personnel pension system, “only new entrants will be required to give contribution.”

Estrada endorsed to the plenary on Monday his committee’s report on the proposed new system for MUP pensions—a controversial bill that sparked debates among lawmakers and between other stakeholders.

He further stressed that “only new entrants in the country’s military and uniformed services will have pension deductions in their monthly pay.”

Estrada included this amendment in the substitute measure proposing reforms in the MUP pension system that the Department of Finance had been pushing “to prevent a fiscal collapse in the coming years.”

The senator clarified that “this [amendment] means that whatever is being enjoyed by the current pensioners, and whatever is expected by those currently in active service, will still be enjoyed and received by them.” He noted that, “In fact, for some of them, the retirement pay will be higher by five percentage points.”

“Our bill will not touch, not change, and not trifle with he benefits of the retired pensioners. There will also be no diminution of the expected pensions of those currently in the service,” the senator stressed.

Moreover, Estrada guaranteed a “more sustainable and secure pension” regime under the proposed Senate version of the bill, which will see the creation of separate trust funds for the Armed Forces of the Philippines (AFP) and another for those in the Philippine National Police (PNP), Philippine Coast Guard (PCG), Bureau of Fire Protection (BFP), Bureau of Jail Management and Penology (BJMP), Bureau of Corrections (BuCor), and commissioned officers in the National Mapping and Resources Information Authority (NAMRIA).

He added that the trust fund will be managed by the Government Service Insurance System (GSIS) and overseen by the trust fund committees of the military and uniformed services.

For those who will enter the service after the enactment of the bill, the military personnel’s contribution will be 7 percent of their base pay and longevity pay, while the rest of those in the uniformed services will be 9 percent, with the government contributing 14 percent and 12 percent, respectively to their pension funds.

Once in place, the retirement pay will be increased to a maximum of 90 percent of the base pay and longevity pay for all MUP, from the current 75 percent and 85 percent.

While there will be no automatic indexation for new entrants, there will be annual adjustments in pension depending on the fiscal or economic conditions, Estrada said.

“I sincerely hope that this will be the Congress that finally addresses this pressing concern affecting not only the fiscal position of the country but also the stability of the defense establishment and the uniformed services as persistent talks of reforming the pension system stir trepidation and uneasiness among their ranks,” Estrada added.