Republic of the Philippines 10 DEC 20
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Third Regular Session .

House BillNo,__ 6829

Introduced by Magdalo Party-List Representatives
Hon. Francisco Ashley L. Acedillo and Hon. Gary C. Alejano

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 way of 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.

.
HON. FRANCISCO ASHLEY L. ACEDILLO - GARY C. ALEJANO

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SIXTEENTH CONGRESS
Third Regular Session

6329

House Bill No.

Introduced by Magdalo Party-List Representatives
Hon. Francisco Ashley L. Acedillo and Hon. Gary C. Alejano

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. Short Title. - This Act shall be known as the “Unified Uniformed
Personnel Retirement Benefits and Pension Reform Act of 2015.”

SEC. 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.

SEC. 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;


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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;

©) 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;

5) Uniformed Personnel shall refer to the officers and enlisted personnel of the

uniformed services; and,

2) 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 (BJMP), Bureau of
Corrections (BuCor), and National Mapping and Resource Information Authority
(NAMRIA).

SEC. 4. Standardizing the AFP Monthly Retirement Pay. - Existing retirees and
future retirees of the AFP 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, amending Section 17 of PD 1638.

SEC. 5. Rationalized Adjustment of Retirement Benefits and Pension. - The pertinent
portions of a) Section 17, PD 1638, b) Section 3, Republic Act (RA) 5976, c) Section 75, RA
6795, as amended by Section 34, RA 8551, d) Section 12, RA 9263, €) Section 14, RA 9993, and
f) Section 20, RA 10575, inasmuch as they relate to adjustments in retirement benefits and
pension based on the prevailing scale of base pay of active uniformed personnel, are hereby
repealed. The retirement benefits and pension of all existing retirees and future retirees shall
immediately cease to be subject to automatic adjustments based on the prevailing scale of base

pay of active uniformed personnel.


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The retirement benefits and pension of uniformed personnel shall be periodically
reviewed by the Department of National Defense (DND), 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.

SEC. 6. 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 existing retirees and future retirees.

The UPRF shall be financed through the following:

(a) Mandatory Contributions. 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:
(® For the first three years after the effectivity of this Act, new entrants shall
contribute five percent (5%) of their monthly compensation as personal share and
the National Government a corresponding share of twenty-two percent (22%);
(ii) For the next three years, new entrants shall contribute seven percent (7%) of
their monthly compensation as personal share and the National Government a
corresponding share of twenty percent (20%); and,
(iii) For every year thereafter, new entrants shall contribute nine percent (9%) of
their monthly compensation as personal share and the National Government a
corresponding share of eighteen percent (18%).

() 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


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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.

Funds from the foregoing sources, except the mandatory contributions under paragraph
(a) of this Section, shall be directly deposited to a Trust Fund that is hereby created under the
Bureau of the Treasury (BTR). The Trust Fund shall be used solely for the maintenance of the
UPRF. The implementing guidelines for deposits to and withdrawals from the Trust Fund and
releases to the GSIS for the UPRF shall be issued by an Inter- Agency Committee composed of
the DOF, DBM, BTR, and the GSIS. The Inter-Agency Committee shall undertake regular
monitoring of the Trust Fund.

SEC. 7. 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.

SEC. 8. 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 AFP-RSBS,
which may include, but are not limited to, the payment of obligations, set-offs, write-offs,
condonations, collections, reappraisals, prosecution and defense of suits, disposal and
conveyance of properties, and distribution of assets: Provided, 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, the remaining assets and obligations of the AFP-RSBS, if any, shall be
transferred to the UPRF after the said three-year period.

SEC. 9. Termination of Contributions to the AFP-RSBS. - Upon the effectivity of this
Act, the active uniformed personnel shall immediately cease to pay to the AFP-RSBS the


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contributions required under Section 4 of PD 361, as amended by PD 1656. New entrants of the
AEP shall not be required to pay any contributions to the AFP-RSBS.

SEC. 10. 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.

SEC. 11. 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.

SEC. 12. 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.

SEC. 13. 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.

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.

SEC. 14. 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,