The Department of Finance (DOF) said the House of Representatives and the economic team have reached a consensus on the key aspects of the military and uniformed personnel (MUP) pension reform.

During the Chat with SBED last Friday, Aug. 4, Finance Undersecretary Maria Luwalhati C. Dorotan-Tiuseco said the economic team and the House lawmakers share a common perspective on the establishment of a reformed pension system for the MUPs.

“We would like to confirm that the representatives of the economic team met with the leaders of the House and we have an emerging consensus on general terms,” Dorotan-Tiuseco told reporters.

“It's very important that there has to be an institution of a reformed system, at least we have that,” she added.

As part of the agreed-upon consensus, Dorotan-Tiuseco emphasized the inclusion of an oversight committee composed of MUP members in the establishment of the fund.

This committee will play a crucial role in ensuring transparency.

In addition, Dorotan-Tiuseco said that as part of the pension reform, a mandatory contribution system will also be introduced.

Furthermore, Dorotan-Tiuseco noted that there is a level of agreement regarding the proposed discontinuation of the automatic indexation of MUP retirees' pension to the salary of the next in rank in the active service.

“There’s some understanding on the indexation part but we have to double-check the numeric figure on the indexation,” Dorotan-Tiuseco said. “On the specifics, the economic team will still sit down with the House and of course other stakeholders.”

“But definitely, we have an agreement as to the mandatory contributions. Because we have to emphasize and it has to be out there that in the contribution, there will be a bigger government on their counterpart,” she pointed out.

To illustrate, Dorotan-Tiuseco explained that for every five percent contribution made by the MUPs, there will be a corresponding 16 percent contribution from the government.

Similarly, for a seven percent contribution, the government's share will be 14 percent, and for a nine percent contribution, the government's share will be 12 percent.

Last Saturday, Aug. 5, Finance Secretary Benjamin E. Diokno welcomed the swift creation of an ad hoc Committee on the MUP pension reform which was formalized during the House of Representatives session last Aug. 2.

Albay 2nd District Representative Joey Salceda, who also chairs the House Committee on Ways and Means, was appointed Chairperson of the newly created committee.

“I thank the House, led by Speaker Martin Romualdez, for swiftly acting on this, and Representative Joey Salceda for leading the charge in crafting a pension system that our MUP retirees can look forward to in their retirement,” Diokno said.

“I trust that the Committee will be able to come up with a reasonable solution that is mutually acceptable to all parties involved,” he added.

According to Salceda, the House committee will endeavor to come up with a version of the bill before the 2024 National Budget deliberations.

After concluding its months-long consultations with MUPs, the economic team is now working with legislators in crafting a fair, reliable, sustainable and  financially sound pension system that can guarantee and fully support the needs of the MUP-retirees and their dependents.