Senate to debate MUP pension reform bill

(GMA NEWS) The bill seeking to reform the military and uniformed personnel (MUP) pension system is now up for debate in the Senate.advertisement

This is after Senator Jinggoy Estrada sponsored Committee Report 173 as contained in Senate Bill (SB) 2501, which seeks to impose a mandatory contribution to new entrants in the Armed Forces of the Philippines and other uniformed services.

“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. In fact, for some of them, the retirement pay will be higher by five percentage points,” the senator said in his sponsorship speech.

“Hindi po gagalawin, hindi po babaguhin, at hindi po papakialaman ng isinusulong nating panukalang batas ang pensyon ng mga pensyonadong retirado. Wala rin pong magiging pagbaba sa inaasahang pensyon ng kasalukuyang mga nasa serbisyo,” he added.

(Our proposed measure will not change the pension of the retired MUP. There would also be no deductions on the pensions of active personnel.)

Under SB 2501, new entrants in the military service will contribute 7% of monthly base pay and longevity pay with 14% from the government share

For uniformed services, new entrants in the Philippine National Police, Philippine Coast Guard, Bureau of Fire Protection, Bureau of Jail Management and Penology, Bureau of Corrections, and the Hydrography Branch of the National Mapping and Resource Information Authority (NAMRIA) will pay 9% of their monthly base pay and longevity pay with 12% government share.

A trust fund will be established for the Armed Forces of the Philippines (AFP) and another for uniformed services, both will be managed by the Government Service Insurance System (GSIS).

SB 2501 sets the retirement age for uniformed services at 57 years old.

The monthly retirement pay under the bill is set at 50% of the base pay and longevity pay of the permanent grade last held by the personnel in case of 20 years in active duty, increasing by 2.5% for every year of active duty rendered beyond 20 years to a maximum of 90% for 36 years of active duty and over.

“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,” said Estrada.

Defense Secretary Gilbert Teodoro Jr earlier said President Ferdinand “Bongbong” Marcos Jr.’s first marching order was to continue to reform the MUP pension system

In May, Marcos pushed for “self-regenerating” pension plans for both the AFP and the PNP to avoid a scenario in which the funds would be depleted.

The economic team, headed by Finance Secretary Benjamin Diokno, had warned of the consequences of the pension payments, with the total yearly payouts expected to hit the P1-trillion mark by 2035 from P213 billion in 2023.

Under its proposal, a technical working group led by the DOF called for MUP in active service to contribute 5% of their monthly pay, and new entrants to contribute 9% of their basic salary and longevity pay.

In September, the House of Representatives approved on third and final reading a bill reforming the MUP pension system. The measure proposed that new MUP entrants would have to give a mandatory monthly contribution – 9% of their salary – with the national government contributing 12%. — DVM, GMA Integrated News