Senate panel mulls new MUP pension system only for new entrants

Some senators on Thursday suggested that the proposed pension system for military and uniformed personnel (MUP) should only cover new entrants.

During the hearing of the Committee on National Defense and Security, Peace, Unification, and Reconciliation, Senator Franklin Drilon cited the sensitivities due to the proposed reforms.

“To be able to move forward, let us separate issues,” he said.

“To me, since sensitivities are on the table, it’s very difficult to resolve, that these sensitivities would be addressed if the reforms will be made to apply to new entrants,” he added.

For Drilon, the current MUP pension system should be maintained for existing pensioners and active members of concerned agencies.

Committee chairperson Senator Panfilo Lacson agreed with the suggestion.

The hearing on the bill seeking to create an MUP Insurance Fund aims to come up with a policy direction to ensure the pension requirement of MUPs would be sustainable for the next 100 years, Lacson said.

“The GSIS released their new actuarial study dated September 13 which capped the salary increase by 5%, with automatic indexation for both existing members and pensioners, and new entrants,” he added.

With a 7% interest rate, the GSIS said the MUP pension system will only need P5.7 trillion as a funding requirement from the previous P9.6 trillion.

“Further, if a mandatory contribution scheme is adopted, the total funding requirements will be reduced to 4 up to 4.4 trillion,” he added. — BM, GMA News