REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. _ 1210

Introduced by MAGDALO Party-List Representative
HON. MANUEL DG. CABOCHAN IIL

EXPLANATORY NOTE

“The State shall provide immediate and adequate care, benefits, and other forms of assistance
to war veterans and veterans of military campaigns, their surviving spouses and orphans.”
— Section 7 of Article XVI of the 1987 Philippine Constitution

It is the responsibility of the State to ensure that the retirees continue to receive benefits
commensurate to the service they have rendered and that they be allowed to live a
comfortable life during their retirement.

Hence, to be consistent with the government policy to help foster socio-economic security
and general well-being of the country’s veterans in recognition of their bravery and loyalty to
the country, the government, through existing retirement laws, provides for the automatic
adjustment of retirement pension based on the prevailing scale of base pay of similarly
ranked active personnel. Said existing laws also have a non-contributory nature which means
that no “seed fund” was established and the budget for pension comes from the annual
General Appropriations Act.

Such policies led to the ballooning of pension costs. It is estimated that by year 2022, the
total pension costs of the Armed Forces of the Philippines will eventually surpass the salaries
paid to its active personnel. If this condition is allowed to persist, the government will
eventually fail to provide adequate retirement pension to the uniformed personnel.

Thus, in order to allow the government to fulfill its duties to the retirees, this measure will
implement reforms by overhauling the entire retirement benefits and pension system in the
uniformed service. This piece of legislation will also provide a new fund-sourcing scheme for
the uniformed retirees’ pension and benefits that is sustainable in the long term

In view of the foregoing, the immediate approval of this bill is urgently sought.

MAN PEABOCHAN IL

Pilipino Party-List



REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 1210

Introduced by MAGDALO Party-List Representative
HON. MANUEL DG. CABOCHAN IIL

AN ACT
AMENDING PERTINENT LAWS ON THE RETIREMENT BENEFITS AND
PENSION OF THE UNIFORMED PERSONNEL OF THE UNIFORMED SERVICES
AND PROVIDING FUNDS THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Title. — This Act shall be known as the “Unified Uniformed Personnel
Retirement Benefits and Pension Reform Act.”

SECTION 2. Declaration of State Policy. — The State duly recognizes the vital role
of the uniformed services in providing internal and external security, promoting peace and
order, ensuring public safety and further strengthening local government capability aimed
towards the effective delivery of basic services to the citizenry. The State also recognizes the
extraordinary hazards, risks, perils and dangers that the uniformed personnel of the uniformed
services encounter in the performance of their duties

It shall therefore be the prime concern of the State to provide all uniformed personnel
adequate remuneration and benefits, including retirement benefits and pension. To this end,
the State shall ensure that the retirement benefits and pension scheme of the uniformed
personnel is secure, reliable, and sustainable.

SECTION 3. Definition of Terms. — As used in this Act, the following terms shall
have the corresponding meanings hereinafter set forth:

a) AFP-RSBS shall refer to the Armed Forces of the Philippines Retirement and
Separation Benefits System established by virtue of Presidential Decree (PD)
361, as amended by PD 1656;

b) _Existing Retirees shall refer to retired uniformed personnel who are currently
receiving or entitled to receive retirement benefits and pension under existing
laws applicable to the uniformed services at the time of the effectivity of this
Act;

c) Future Retirees shall refer to uniformed personnel active at the time of the
effectivity of this Act, and to new entrants, all of whom, at the time of their
actual retirement from the uniformed services, are eligible to receive


retirement benefits and pension under existing laws applicable to the
uniformed services;

d) _ GSIS shall refer to the Government Service Insurance System;

©) New Entrants shall refer to uniformed personnel who enter the uniformed
services upon the effectivity of this Act, excluding those who entered the
uniformed services through lateral entry from another uniformed service;

f) Uniformed Personnel shall refer to the officers and enlisted personnel of the
uniformed services; and,

£) Uniformed Services shall refer to 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 (BMP),
Bureau of Corrections (BuCor), and National Mapping and Resource
Information Authority (NAMRIA), ses

SECTION 4. Standardizing the Uniformed Services Monthly Retirement Pay. —
‘New entrants and those in the active service of the uniformed services, upon their retirement,
shall be entitled to receive a monthly retirement pay equivalent to two and one-half percent (2
1/2%) for each year of active service rendered, but not exceeding ninety percent (90%) of the
monthly base and longevity pay of the grade next higher than the permanent grade last held.

SECTION 5. Rationalized Adjustment of Retirement Benefits and Pension. — The
retirement benefits and pension of all new entrants shall not be subject to automatic
adjustments based on the prevailing scale of base pay of active uniformed personnel
Provided, however, That the existing and future retirees shall continue to receive retirement
benefits and pension and their corresponding automatic adjustments. Provided, further, That,
the existing and future retirees of the Philippine Coast Guard shall likewise be subject to
adjustments based on the prevailing scale of base pay of the PCG uniformed personnel in the
active service. The funding of which shall still be sourced from the annual General
Appropriations Act (GAA).

SECTION 6. Receipt of Retirement Benefits and Pension.— 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 (3) years pay within one (1) month of their effective
date of retirement,

SECTION 7. Automatic Review. — The retirement benefits and pension of the new
entrants shall be reviewed commencing two (2) years after the year of retirement of the first
new entrant retirees and every two (2) years thereafter, by the Department of National
Defense (DND), Department of Interior and Local Government (DILG), Department of
Justice (DOJ), Department of Transportation and Communication (DOTC), Department of
Budget and Management (DBM), the Department of Finance (DOF), and the GSIS for the
purpose of recommending to the President, for his approval, appropriate adjustments thereto,
in accordance with rules and regulations to be jointly promulgated by the DOF and the DBM
under Section 12 of this Act.


SECTION 8. Disability Pension. — All uniformed personne! 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.

SECTION 9. Creation of a Uniformed Personnel Retirement Fund and Sources of
Funding. — A Uniformed Personnel Retirement Fund (UPRF), to be managed by the GSIS,
shall be established 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
for the payment of retirement benefits and pension to new entrants.

The UPRF shall be financed through the following:

(a) Mandatory Contributions. Upon the effectivity of this 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 annual
general appropriations for the maintenance of the UPRF, as provided hereunder:

i) New entrants shall contribute nine percent (9%) of their monthly
compensation as personal share and for the National Government, a
corresponding share of eighteen percent (18%); and,

ii) The National Government, representing the active uniformed
personnel’s contribution, shall contribute twenty-seven percent (27%)
of the monthly base pay of the aforementioned uniformed personnel.

(b) Additional Sources of Funding. Additional funds for the maintenance of the UPRF
shall be sourced from:

(i) The proceeds derived from the sale or disposition of public lands; as
may be authorized by the President for this purpose;

(ii) The proceeds derived from the lease or joint development of public
lands, as may be authorized by the President for this purpose, pursuant
to the provisions of existing laws and regulations governing lease or
joint development of public lands, including such immovables and
other facilities as may be found therein; and,

(iii) _ The proceeds derived from reclamation projects to be approved by the
President for this purpose.

SECTION 10. Deactivation of the AFP-RSBS. — The AFP-RSBS shall be
deactivated upon the effectivity of this Act.

For purposes of this Section, the AFP-RSBS Board, at the option of the Secretary of
National Defense, shall constitute the Board of Liquidators (BOL), which is mandated to
supervise collecting and realizing the assets of the AFP-RSBS, and effect the settlement of
the obligations of the AFP-RSBS to third persons. The BOL is hereby authorized to perform
such other functions as may be necessary for the purpose of winding-up the affairs of the

3


AFP-RSBS, which may include, but are not limited to, the payment of obligations, set-off,
write-off3, condonations, collections, reappraisals, prosecution and defense of suits, disposal
and conveyance of properties, and distribution of assets: Provided, That the BOL shall
continue to perform its mandated duties and authorized functions until all the obligations of
the AFP-RSBS have been settled, for a period not to exceed three (3) years from the time the
BOL is constituted: Provided, further, That the remaining assets and obligations of the AFP-
RSBS, if any, shall be transferred to the UPRF after the said three-year period.

SECTION 11. Termination of Contributions to the AFP-RSBS. — Upon the
effectivity of this Act, the active AFP personnel shall immediately cease to pay to the AFP-
RSBS the contributions required under Section 4 of PD 361, as amended by PD 1656.

SECTION 12. Return of Contributions made to the AFP-RSBS. — All contributions
previously paid by the active uniformed personnel of the AFP shall be refunded within a
period not to exceed three (3) years from the effectivity of this Act.

SECTION 13. Implementing Rules and Regulations. ~ Within sixty (60) days from
the effectivity of this Act, the DBM and the DOF, in consultation with the GSIS, shall
promulgate the necessary rules and regulations for the effective implementation of this Act.

SECTION 14. Separability Clause.— If any provision of this Act is declared invalid
by a competent court, the other provisions not affected by such declaration of invalidity shall
continue to be in force and effect.

SECTION 15. Repealing Clause. — The pertinent portions of the following legal
provisions, insofar as they dispose of the net income of the Philippine Reclamation Authority,
are hereby repealed and/or modified accordingly: a) Section 112, RA 8435, as amended by
RA 9281; b) Section 42(a), RA 7279; and, c) Section 10(d), RA 7835.

RA 9993, RA 8551, PD 1638, PD 361, PD 1656 and all other laws, decrees, orders,
rules and regulations, or parts thereof, specifically inconsistent with any provision of this Act
shall be deemed repealed, amended or modified accordingly.

SECTION 16. Effectivity. — This act shall take effect fifteen (15) days after the date
of its publication in the Official Gazette or in at least two (2) newspapers of general
circulation,

Approved,