House panel approves MUP pension reforms

A House panel, created to guarantee a salary increase, indexation of pensions, and funding for the pension system of military and uniformed personnel, has approved a substitute bill that will redesign the current MUP pension system.
    In a deliberation on Tuesday by the House ad hoc committee on the MUP pension system, chaired by Albay 2nd District Representative Joey Salceda, the panel agreed on the substitute bill, in consolidation with other measures, which intends to introduce reform in the MUP pensions system.
    The panel-approved measure considered the proposals of the members of the military and uniformed services in the formulation of the proposed MUP pension reform.
    Members of the Armed Forces of the Philippines, the Philippine National Police, Bureau of Fire Protection, Bureau of Corrections, Bureau of Jail Management and Penology, and Philippine Coast Guard, and their mother agencies Department of National Defense and Department of Interior and Local Government, accepted the proposal which was formalized and amended with inputs during the hearing.

“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,” Salceda said.

The economist-lawmaker further noted that economic managers also see the “substantial improvement this formula makes over the current system.”

House Speaker Martin Romualdez, who previously ordered the creation of the panel to thresh out disagreements over various proposals on the pension system reforms, commended Salceda and members of the committee for coming up with a revised version of the reform bill that is now acceptable to all stakeholders including the AFP and the PNP.

The provisions of the bill include:

    Retention of promotion to one rank higher upon retirement;

    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 that currently does not have it;

    Uniform multiple of 1.0 x Years of Service for lump sum benefit;

    Guaranteed 3 percent annual increase in salaries for 10 years;

    Indexation of pensions to 50 percent of adjustment in pay;

    Creation of a window for indigent pensioners under the trust funds;

    Regular IFRS-compliant reports every three years for the pension system

Salceda underscored that it is a “win-win solution” since they are removing the risks of sudden spikes in pension liabilities while also ensuring that salaries and pensions increase at manageable levels.

“For the past 25 years, the salaries have only increased for nine years, so this is also a win for the active personnel, who will get a salary increase every year for the next ten years,” the solon said.

“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.”

Romualdez, meanwhile, said the landmark legislation is a testament to their commitment to national security and fiscal responsibility.

“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,” the House speaker said.

The MUP pension system, which the Department of Finance has earlier warned as fiscally unsustainable, was among President Ferdinand Marcos Jr.’s priority legislation.

Marcos wants Congress to reform the pension system, which he listed as one of his priority legislation in his second State of the Nation Address. -- By Edjen Oliquino