House panel approves bill to overhaul pension system for military, police

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File photo of soldiers from thr 16th IB being deployed in Surigao del Sur in 2015. Photo by Bobby Lagsa/Rappler

A House of Representatives panel on Wednesday approved a measure seeking to overhaul the military and uniformed personnel (MUP) pension system to make it more fiscally sustainable.

During its virtual meeting, the House Ad hoc Committee on the Military and Uniformed Personnel Pension System approved the unnumbered substitute bill after significant issues were resolved among the committee members and with the military and uniformed services branches.

Albay Rep. Joey Salceda, panel chair, said among the key revisions in the bill include the addition of disability benefits in the authorized insurance system and the creation of a provident fund to be infused with voluntary contributions from MUPs.

The disability benefits shall be created under the risk insurance system to enhance the benefits package for MUPs who incur disabilities in the line of duty.

“The benefits that MUPs will receive from the insurance system [are what] we will create under the Trust Fund Committee. [This] will be on top of whatever benefits they are already entitled to. So, this is a way to balance our fiscal reform of the system with the unique risks the MUPs take,” Salceda said.

The bill also provides a harmonized definition for what constitutes an MUP member.

He said law enforcement agencies such as the Philippine Drug Enforcement Agency should be included in the definition of uniformed services.

Salceda emphasized the need to enact military pension reform urgently, highlighting that the MUP pension liability is at P9.6 trillion, or 53.4 percent of the 2020 nominal gross domestic product (GDP).

“This is our longest-standing fiscal issue, actually. This started in 1978. President GMA (Gloria Macapagal-Arroyo) had a study on the matter commissioned in 2004 when the problem became apparent. The first bill on this matter was filed in 2006. It has been 17 years since that study in 2004,” he said.

Other features of the bill include the removal of automatic indexation but retention of the no-contribution scheme, pension increases based on a cost-of-living adjustment, rationalizing pensionable age at 56 years old, and allowing optional retirement at 20 years.

Also proposed are higher risk insurance coverage for those wounded or killed in action, and the creation of a military and uniformed services trust fund, with leeway to initiate a credible defense posture.

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