Senate MUP reform bill sponsored in plenary

Senate MUP reform bill sponsored in plenary

THE SENATE version of the bill overhauling the pension system for military and uniformed personnel (MUP) has been sponsored out into the plenary.

On Monday, Senator Jose “Jinggoy” P. Estrada who sponsored Senate Bill No. 2501, said establishing separate trust funds for the MUP would allow a measure of fiscal stability and facilitate the reallocation of funds to health, education and housing programs for these personnel.

“The entrants will be covered by a more sustainable pension regime  — one that is assured of adequate funds for the retirement of our military and uniformed personnel,” he said in his speech.

In the Senate bill, new MUPs will be required to contribute to the new pension system, with military officers contributing 7% of their base monthly salary and the National Government contributing 14%.

Other uniformed personnel would be required to contribute 9% of their salary with a government top-up of 12%.

The measure would establish the Armed Forces of the Philippines Trust Fund and the Uniformed Personnel Services Trust Fund.

MUPs under the current pension system are not required to contribute to the pension fund, which is entirely paid for by the National Government.

A MUP Trust Fund Committee will be established to oversee and draft guidelines with an eye towards a financially sustainable fund.

The body will be headed by the Secretary of Finance and include the Secretaries of Budget and Management, National Defense, Interior and Local Government, Justice, and Transportation. 

The president and general manager of the Government Service Insurance System, the chiefs of staff of the Armed Forces of the Philippines, and the Philippine National Police will also be members of the committee.

Under the measure, the trust funds and their assets are tax-exempt.

Monthly retirement pay for retired MUPs will be set at 50% of the base pay of the last position they held.

Retirement pay increases by 2.5% for every year of active duty rendered for 20 years, and pegged to a maximum of 90% of their last base salary.

If passed, the reform would allow a guaranteed 3% annual increase in the base pay of active personnel and in the pension benefits of retirees over the next 10 years.

The bill is on the Legislative Executive Development Advisory Council’s list of priority measures.

The House of Representatives in September approved its version of the bill on third and final reading, setting a member contribution rate of 9% of monthly salary for new entrants and a 12% government top-up.

“We cannot continue kicking the can down the road, and further avoid or delay the issue of ballooning expenditures in MUP pension,” Mr. Estrada said. — John Victor D. Ordoñez