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Senate eyes 7-9 percent pay contribution for MUP pension

Marc Jayson Cayabyab - The Philippine Star
Senate eyes 7-9 percent pay contribution for MUP pension
Members of the Philippine Army maneuver their vehicles around the Quirino Grandstand on June 10, 2023, in preparation for the 125th Independence Day celebration on June 12, 2023.
Photo by Ernie Penaredondo / The Philippine STAR

MANILA, Philippines — New entrants in the military and uniformed personnel services will contribute seven to nine percent of their base and longevity pay, according to the latest version of the bill that seeks to reform the MUP pension system.

The mandatory contributions will be among the funding sources for the new MUP pension, according to the joint report of the Senate committees on national defense and security, government corporations, ways and means, and finance dated Nov. 29.

In an interview on the sidelines of the bicameral meeting for the proposed 2024 budget on Thursday, former police chief now Sen. Ronald dela Rosa said the Senate’s version of the proposal was a result of consultations between the executive and those in the active service.

Under the bill, the Armed Forces of the Philippines (AFP) trust fund will be financed by the military entrants’ seven percent contribution while the national government will contribute 14 percent.

The other funding sources are residual assets and funds in the AFP Retirement and Separation Benefits System; sale, lease or joint development of military reservations; public-private partnerships; earnings and dividends from investments, among others.

Meanwhile, the Uniformed Personnel Trust Fund will be financed by their nine percent contributions as well as the national government’s 12 percent share, as well as earnings and dividends from investments.

Uniformed personnel refers to those in the service at the Philippine National Police, Philippine Coast Guard, Bureau of Fire Protection, Bureau of Jail Management and Penology, Bureau of Corrections and the Hydrography Branch of the National Mapping and Resource Information Authority.

The bill, however, states that the contribution rates may be adjusted “on account of adverse fiscal or economic conditions or the fiscal constraints of the national government.”

The bill also sets the military’s monthly retirement pay at 50 percent of the monthly pay, according to the last position held by the retired personnel.

The Senate joint committees released its version of the pension reform by consolidating the bills before the Senate as well as the one approved by the House of Representatives.

The present MUP pension system is funded entirely by the government, prompting Finance Secretary Benjamin Diokno to prod Congress to overhaul it for being unsustainable.

The government allocated P164 billion for the MUP pension and gratuity benefits in the proposed P5.768-trillion national budget for 2024.

The MUP budget accounts for 64.77 percent of the total P253.2 billion earmarked for the total pension and gratuity fund, according to the 2024 National Expenditure Plan.

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