The House Ad Hoc Committee on the Military and Uniformed Personnel (MUP) pension system on Wednesday approved the proposed retention of the current MUP pension scheme, with the condition that salary increases of MUP personnel will be capped at an annual increase of 5 percent for 10 years.
Following the executive meeting of the committee, panel chairman and Albay Rep. Joey Salceda said members of the committee approved the proposal as the new substitute bill after requests from the military and uniformed services to consider the unique risks in their profession.
“We have studied and listened to the concerns of the uniformed services. Our resolution is to simplify the reform. The heart of the problem is indexation to very rapidly growing salaries. So, the solution is to contain the most crucial aspect of the problem. Let’s contain uncontrollable salary increase,” said Salceda in a news statement.
Even with the 5-percent cap, the lawmaker said the MUPs still “win.”
“The average nominal wage increase over the last 5 years is 4.2 percent. Over the last 10 years, the growth has been 4.4 percent. So, if that cap is imposed, the MUP are still in a privileged place compared to others. This is part of our commitment to recognizing the inherent risks of their job,” Salceda added.
Under the current MUP system, almost the entire pension spending for MUP comes from the national budget.
“And because President Duterte raised their salaries almost by double, they are starting from a high base. So, 5 percent for them is really much higher in monetary terms than 5 percent for a lower-paid employee,” Salceda explained.
“By retaining the pension system structure, I mean everything, including voluntary retirement. So, we are addressing the service members’ concerns about early retirement. We will not change how the pension is computed, or how benefits are computed,” Salceda said.
The lawmaker also explained that the proposed version saves the system from collapse, and ensures that the government can fund pensions for the next 10 years.
“Basically, it buys time for us to find better funding sources and benefits structures for the MUP pension,” Salceda added.
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