MUP Pension Reform gets House nod on second reading

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THE House of Representatives today approved on second reading a more comprehensive version of the Military and Uniformed Personnel (MUP) Pension System.

According to Rep. Joey Sarte Salceda, Chairman of the House Ad Hoc Committee on the MUP Pension System, the key provisions, including the amendments that were accepted on the floor were full indexation, with a provision for adjustment during adverse fiscal conditions, a guaranteed salary increase of three percent per annum over 10 years, which is already a sacrifice willingly made by the MUPs given the historical salary rate increase of 12 percent, the creation of two trust funds, one for the Armed Forces of the Philippines, which will infuse at least P44 billion in assets to the fund, and another for uniformed services, uniform retirement benefits for total permanent disability, provisions for assistant for indigent military retirees, and a mandatory contribution of nine percent of salaries for new entrants, with a larger government counterpart of 12 percent, and retirement of new entrants at rank last held.

Salceda thanked his colleagues in the Ad Hoc Committee and likewise thanked the MUP agencies for their steadfast support during the plenary deliberations and for agreeing with the Committee and the economic managers on the need to move forward for fiscal improvements to the system.

There is no longer any debate between the MUP agencies and the economic managers that we need this reform. There is also no debate that the military and uniformed personnel deserve some degree of retirement protection from the state they protect. This consensus bill hurdled the House because it is fiscally, politically, and morally acceptable,” the solon explained.

As such, he said, the work of the Ad Hoc Committee already ends, so the ball is now in the Senate’s court. “My counterpart, Senator Jinggoy, has also insisted on the need for a reform. That is a welcome shift in direction compared to the past Congress.”

He said they also accommodated the request of the Secretary of National Defense, who is now more or less satisfied. “I trust that the AFP will be true to its word in contributing assets to the AFP Pension Trust Fund. I especially look forward to having the assets of the RSBS infused right away,” Salceda continued.

He said House Speaker Martin Romualdez gave them three imperatives: Guarantee a salary increase, guarantee pension funding sources, and guarantee pension increases according to the needs of the pensioners. Salceda said they have satisfied those imperatives.

For active and retired personnel, he said the structure of the pension system was preserved in full. But the great success of this reform, he added that it has managed the risk of sudden increases in salary, as is typically the case for new Presidents.

I am confident that this time, with the President’s strong support and a consensus among the MUP, this reform will find its way to the President’s desk, hopefully before the year ends,” Salceda continued.

The reform reduces the unfunded liabilities of the MUP pension system from estimates of as high as 14 trillion to just 3.4 trillion. He thinks a credit rating upgrade will follow its enactment, he said.

The solon also thanked President Ferdinand Marcos, Jr. and Speaker Romualdez for the trust, confidence, and support.

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