Recto on MUP pension reform: New entrants should contribute

Finance Secretary Ralph Recto is echoing the Senate’s position on the military and uniformed personnel (MUP) pension system reform.

“My personal stand is the same as the position now in the Senate. Number one, the government cannot be an Indian giver… the government has a social contract with our MUPs… we promised them a certain pension. I think the government should respect that, I think the Senate respects that,” Recto said at a press briefing in Manila on Wednesday.

“What we can do for the reform is that all new entrants, for example, on January 1, 2025, will have a different pension system similar to what civilians have. They will contribute now, let's say, to the GSIS (Government Service Insurance System),” he added.

The current Senate version of the MUP pension reform bill, contained in Senate Bill 2501, seeks to impose a mandatory contribution for new entrants in the Armed Forces of the Philippines and other uniformed services.

Under SB 2501, new entrants in the military service will contribute 7% of monthly base pay and longevity pay, with 14% from the government share.

For uniformed services, new entrants in 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 will pay 9% of their monthly base pay and longevity pay with a 12% government share.

A trust fund will be established for the AFP and another for uniformed services to be managed by the GSIS.

SB 2501 sets the retirement age for uniformed services at 57 years old.

The monthly retirement pay under the bill is set at 50% of the base pay and longevity pay of the permanent grade last held by the personnel in case of 20 years of active duty, increasing by 2.5% for every year of active duty rendered beyond 20 years to a maximum of 90% for 36 years of active duty and over.

The Senate version, however, was different from what Recto’s predecessor, Benjamin Diokno, had proposed.

Diokno pushed to mandate both active and new entrants to contribute to their pension fund.

Under its proposal, a technical working group led by the DOF called for MUP in active service to contribute 5% of their monthly pay and new entrants to contribute 9% of their basic salary and longevity pay.

In September, the House of Representatives approved on third and final reading a bill reforming the MUP pension system.

The measure proposed that new MUP entrants would have to make a mandatory monthly contribution of 9% of their salary, with the national government contributing 12%.

Recto said the government could also sell some assets of the AFP "to partially pay for the pension.”

“At the same time, maybe those assets are idle; the government, together with the private sector, can develop these assets,” he said. — VBL, GMA Integrated News