House eyes ‘win-win’ solution to MUP pension system

MANILA, Philippines — The House of Representatives is committed to approving its version of a “win-win solution” to the fiscal issues of the military and uniformed personnel (MUP) pension system.

Albay Rep. Joey Salceda, House committee on ways and means chairman, said in a statement that this is vital for the country to move forward “with financing a credible defense posture, especially in the West Philippine Sea.”

“We need to resolve the MUP pension system’s fiscal defects so that we can move forward with devoting more of the national budget to credibly defending the country’s territory… Our expenditures are growing for defense, even as our MUP pension liabilities also grow. That is untenable. We have a solution that inflicts the least pain possible on all stakeholders,” Salceda said.

Salceda was designated to head the ad hoc committee on the MUP pension system, which is set to meet today to discuss bills related to it. Among those that will be discussed are the results of the meeting the committee had with representatives of economic managers last Aug. 2.

“The pension structure will be retained in full – pensionable age, retirement at one rank higher, years before optional retirement, the benefits structure. Everything stays,” he said.

According to Salceda, they will also assure a three-percent annual salary increase to all active personnel.

“That’s win-win because most of the time, MUP do not get salary hikes, but when they do, it’s at unpredictable rates. Our proposal makes the salary adjustment assured at a stable rate. No shocks to our fiscal system,” he added.

On top of this, he pointed out that the “indexation stays,” which means the pensioners will also get an assured increase in pensions for 10 years.

Salceda said the indexation would be limited to 50 percent of the salary increase. “But again, that is better the usual case, where there is no guarantee of pension hikes.”

“We are set to discuss contributions as one of the potential areas for deliberation. Capacity to pay is critical, but parity with civilian pension contributions has moral weight,” he added.

He said an MUP Trust Fund would be created to augment pension funding needs.