The good news is the national government is
moving closer to a solution to the contentious issue of
proposed reforms in the military and uniformed personnel pension system.
The Department of Finance had earlier noted the fiscal strain from rising pension costs for MUP,
which the government shoulders through budget appropriation
Malacañang therefore asked Congress to look for
a legislative fix to the problem of ballooning pension
costs for MUP.
Without any reform, the economic team had
warned that pension payouts could hit the P1-trillion
mark by 2035.
The DOF decided to first conduct consultations with representatives from agencies under the
Department of National Defense and the Department
of Interior and Local Government, including the Armed
Forces of the Philippines and the Philippine National
Police, to find a way out of contrasting opinions.
This was a step in the right direction.
MUP pension reform
7611/(0955)1552764; weeklynewsdatelat.2015@gmail.com /
heidelitalat@yahoo.com
www.datelineweeklynews.com
In mid-August, a House ad hoc panel approved
a substitute MUP Pension Reform bill ‘that appears to be
acceptable to both the military and uniformed services
and to the economic managers,” according to Rep. Joey
Salceda, chair of the House committee on ways and
means.
The approved bill consolidates the provisions
of 12 other House bills suggesting changes to the MUP
pension system.
Instead of leaving it up to the government to
fund the pension for MUPs, it will now require mandatory
contributions for active personnel and new entrants similar to other government workers.
Among the key provisions of the approved bill
are the following:
One, retention of promotion to one rank higher
upon retirement.
Two, uniform 90 percent of longevity pay plus
base pay for lump sum benefit upon separation below 20
years in service, which will create a new benefit for the
PNP which currently does not have it.
Aug. 28-Sept. 3, 2023
Three, uniform multiple of 1.0 x Years of Service for lump sum benefit.
Four, guaranteed 3 percent annual increase
in salaries for 10 years.
Five, indexation of pensions to 50 percent of
adjustment in pay.
And six, creation of a window for indigent
pensioners under the trust funds.
The approved bill also provides for a phasedcontribution scheme of 5 percent of salaries for the
first three years, 7 percent for the next three years,
9 percent thereafter for active personnel; 9 percent
immediately for new entrants, but including a larger
government counterpart to complete the 21 percent
contribution.
Rep. Salceda believes this is a “win-win solution, because we are removing the risks of sudden spikes in
pension liabilities while also ensuring that salaries and
pensions increase at manageable levels.”
But will the Senate agree with him?
