A HOUSE ad hoc committee yesterday adopted in principle what it called a “win-win” pension reform system that is acceptable to both the military and uniformed services and the government’s economic managers.
Under the proposal, military and uniformed personnel (MUP) will be subjected to a “phased in” contribution scheme of five percent of salaries for the first three years, seven percent for the next three years, nine percent thereafter for active personnel and nine percent immediately for new entrants, including a larger government counterpart to complete the 21 percent contribution to the pension fund.
In return, active military and uniformed personnel (MUP) will get a salary increase every year for the next 10 years and a separation benefit if they leave.
Speaker Romualdez ordered the creation of the Ad Hoc Committee to thresh out disagreements over various proposals on the pension system reforms.
“This is a win-win solution, because we are removing the risks of sudden spikes in pension liabilities while also ensuring that salaries and pensions increase at manageable levels,” said Albay Rep. Joey Salceda, who chairs both the ad hoc panel and the committee on ways and means.
“We can already see the light at the end of this fiscal tunnel. The services accepted. The economic managers also see the substantial improvement this formula makes over the current system.”
Appointed as vice chairmen of the panel were Rep. Zaldy Co (PL, Ako Bicol), who chairs the committee on appropriations, and Iloilo Rep. Raul Tupas, chair of the committee on national defense, and Laguna Rep. Dan Fernandez, who chairs the committee on public order and safety.
Among those present in the ad hoc panel meeting were representatives of the PNP; the Armed Forces (AFP); Bureau of Fire Protection (BFP); Bureau of Corrections (BuCor); Bureau of Jail Management and Penology (BJMP); the Philippine Coast Guard (PCG), as well as their mother agencies Department of National Defense (DND) and Department of Interior and Local Government (DILG).
The agreed upon provisions, which were moved for approval by Tupas, retains the promotion to one rank higher upon retirement and provides for a uniform 90 percent of longevity pay plus base pay for lump sum benefit upon separation below 20 years in service, a new benefit for the PNP.
There will also be a lump sum benefit based on the years of service for lump sum benefit; a guaranteed three percent annual increase in salaries for 10 years; indexation of pensions to 50 percent of adjustment in pay; creation of window for indigent pensioners under the trust funds; submission of a regular IFRS-compliant (International Financial Reporting Standards) reports every three years for the pension system.
“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. 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,” said Salceda.
He said the economic managers “went through dozens of consultations and we have also ensured that we hear the statements and comments of the various services. We also sought the acceptance of the various services before moving to approve the measure.
“Let me reiterate the three guarantees of this reform: Guaranteed salary increase. Guaranteed pension indexation. Guaranteed funding sources for the pension. This is on top of the President’s commitment to resolve all arrears to pensioners,” Salceda said.
Romualdez said the approval of the substitute bill, which will also be voted upon in the plenary, “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. With this reform, we’re not only prioritizing the well-being of our MUP but also ensuring the country’s economic stability. It is a testament to our commitment to national security and fiscal responsibility. I congratulate the Ad Hoc Committee for their hard work and dedication towards this pressing issue,” he said.
