House tackles reforms in retirement benefits of uniformed services

October 21, 2017

A technical working group (TWG) of the House committees on government enterprises and privatization and on national defense and security this week started consolidating two measures seeking to reform the retirement benefit and pension system of the seven major uniformed services of the government.

TWG head Rep. Mark Go of Baguio  said President Rodrigo Duterte emphasized the need to reform the benefits and pension system of the uniformed services in his budget message to Congress for fiscal year 2017.

Go said the bills aim to address the many concerns of the major uniformed services of the government.

The seven major uniformed services are the Armed Forces of the Philippines (AFP), Philippine National Police (PNP), Philippine Coast Guard (PCG), Bureau of Fire Protection (BFP), Bureau of Jail Management and Penology (BJMP), Bureau of Corrections (BuCor), and National Mapping and Resource Information Authority (NAMRIA).

The TWG is harmonizing House Bills 1137 and 5673 filed by Magdalo Partylist Reps Gary Alejano and Francisco Jose Matugas of Surigao del Norte, respectively. The bills are both titled “Unified Uniformed Personnel Retirement Benefits and Pension Reform Act.”

The bills provide that existing retirees and future retirees of the uniformed services shall be entitled to receive a monthly retirement pay equivalent to two-and-a-half percent for each year of active service rendered, but not exceeding 90 percent of the monthly base and longevity pay of the grade next higher than the permanent grade last held, amending Section 17 of Presidential Decree 1638 also known as “Establishing A New System Of Retirement And Separation For Military Personnel Of The Armed Forces Of The Philippines” issued in 1979 by former President Marcos.

All new entrants, who at the time of their actual retirement, are eligible to receive retirement benefits and pension under existing laws applicable to the uniformed services, shall be entitled to receive their lump sum benefit equivalent to three years within one month of their effective date of retirement.

All uniformed personnel who are disabled in the line of duty shall be eligible to receive a monthly pension, the rates of which shall be determined by the respective department concerned.

The bills seek to provide a new fund-sourcing scheme for the unified retirees’ pension and benefits that is sustainable in the long term.

They mandate the creation of a Uniformed Personnel Retirement Fund (UPRF) to be managed by the Government Service Insurance System (GSIS) for the sustainability of the retirement benefits and pension of uniformed personnel.

The GSIS shall create a new department which shall exclusively administer the UPRF.

Upon the effectivity of the Act, it shall be mandatory for new entrants to contribute a percentage of their monthly compensation as personal share and for the national government to contribute a corresponding share sourced from the general appropriations for the maintenance of the UPRF.

The additional funding for the maintenance of the UPRF shall be sourced from the sale or disposition of public lands, as may be authorized by the President.

During the hearing, representatives of the seven major uniformed services presented their respective retirement and pension system. DMS