Republic of the Philippines
House of Representatives
Quezon City, Meteo Manila

EIGHTEENTH CONGRESS
Second Regular Session

House Bill No._ 7158

INTRODUCED BY
REP. ALFRED VARGAS

Gas RESE NN

AN ACT
PROVIDING FOR A UNIFIED SYSTEM FOR SEPARATION, RETIREMENT,
AND PENSION OF THE MILITARY AND UNIFORMED PERSONNEL (MUP)
SERVICES OF THE REPUBLIC OF THE PHILIPPINES, CREATING THE
MILITARY AND UNIFORM PERSONNEL RETIREMENT FUND
AUTHORITY, PROVIDING FUNDS THEREFOR,
AND FOR OTHER PURPOSES

EXPLANATORY NOTE

The 1987 Constitution recognizes the invaluable role of the military
and uniformed personnel in protecting the nation and its citizens from
threats, within and outside the country’s borders. It mandates the State to
strengthen the patriotic spirit and nationalist consciousness of the military,
and to ensure professionalism in the service and adequate remuneration
and benefits of its members. With the growing demands for peace and
stability in the country, a reformed and upgraded system for adequate
remuneration and benefits for military and uniformed personnel is vital to
sustaining interest in this endeavor.

This bill seeks to provide for a unified system for separation,
retirement, and pension of the military and uniformed personnel (MUP)
services, in order to realize its mandate of maintaining financial flexibility
and stability on the part of the government while also providing necessary
benefits and remuneration to our men and women in uniform.

In view of the foregoing the immediate passage of this bill is earnestly
sought.

‘RED VARGAS

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Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
Second Regular Session

House Bill No, _7158

INTRODUCED BY
REP. ALFRED VARGAS

AN ACT
PROVIDING FOR A UNIFIED SYSTEM FOR SEPARATION, RETIREMENT,
AND PENSION OF THE MILITARY AND UNIFORMED PERSONNEL (MUP)
SERVICES OF THE REPUBLIC OF THE PHILIPPINES, CREATING THE
MILITARY AND UNIFORM PERSONNEL RETIREMENT FUND
AUTHORITY, PROVIDING FUNDS THEREFOR,
AND FOR OTHER PURPOSES

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 "Military and
Uniformed Personnel Services Separation, Retirement, and Pension Act."

SECTION 2. Declaration of Policy. - The State duly recognizes the vital
role of military and uniformed personnel 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 military and uniformed personnel encounter in the
performance of their duties.

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

SECTION 3. Definition of Terms. - For the purposes of this Act:

{a) “Military 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 (BJMP), Bureau of Corrections (BuCor),
and employees of National Mapping and Resource Information Agency
(NAMRIA) who were Philippine Navy officers and enlisted personnel
and members of the defunct Philippine Navy Coast and Geodetic
Survey that became the nucleus of the NAMRIA;

(b) “New Entrants” shall refer to military and uniformed personnel from
the Military and Uniformed Services who entered the Military and
Uniformed Services after the effectivity of this Act;

(c) “Active Members” shall mean Active Service rendered by a Military or
Uniformed Services Personnel as a commissioned officer, non-
commissioned officer, enlisted personnel, cadet, probationary officer,
trainee or draftee in the Military or Uniformed Services and service
rendered by him/her as a civilian official or employee in the Philippine
Government prior to the date of his/her separation or retirement from
the Military or Uniformed Services, for which armed and/or civilian
service he/she shail have received pay from the Philippine
Government and/or such others as may hereafter be prescribed by
law as Active Service; Provided, That for purposes of retirement,
he/she shall have rendered at least ten (10) years of Active Service as
an officer or enlisted man in the Military or Uniformed Services:
Provided, further. That no period of such civilian government service
longer than his/her active armed service shall be credited for
purposes of retirement: Provided, finally. That service rendered as a
cadet, probationary officer, trainee or draftee in the Military or
Uniformed Services shall be credited for retirement purposes with a
maximum of four (4) years, subject to applicable rules and

regulations;

(d) “Total permanent physical disability” shall mean the anatomical loss
of the permanent loss of use of both hands, of both feet, of both eyes,
of both ears or any combination, or loss of mental faculties, as
determined by the medical board created for the purpose;

(e) “Survivors” shall mean:
i, Surviving spouse of a deceased Military or Uniformed Services
Personnel not legally separated by judicial decree from the
deceased issued on grounds not attributable to said spouse,
and such marriage was contracted during the Active Service of

the deceased: Provided, That entitlement of said spouse to
benefits under this Act shall terminate upon re-marriage or co-
habitation with another, or the commission of any of the acts
amounting to “physical violence, "sexual _violence",
"psychological violence’, or "economic abuse" against the
biological or adopted children of the deceased as defined in
Republic Act No. 9262, as determined by a Board created for the


purpose; Provided, further. That the conviction of the surviving
spouse of any crime which carries a penalty of imprisonment of
more than six (6) years and one (1) day, the conception of a
child after the death of the deceased, or loss of Philippine
Citizenship shall terminate the entitlement of such surviving
spouse to benefits under this Act;

ii. Surviving legitimate, adopted and illegitimate children of a
deceased Military or Uniformed Services Personnel conceived,
adopted or acknowledged prior to separation or retirement of
the parent from active service: Provided, That entitlement of said
children to benefits under this Act shall terminate when such
children attain twenty-one (21) years of age or upon marriage,
whichever is earlier: Provided, further. That children who suffer
from total permanent disability as defined in this Act, shall be
entitled to benefits under this Act for their lifetime: Provided,
finally. That the conviction of the surviving child of any crime
which carries a penalty of imprisonment of more than six (6)
years and one (1) day. or loss of Philippine Citizenship shall
terminate the entitlement of such child to benefits under this
Act;

ili, In default of those mentioned in sub-paragraphs f (1) and (2)
above, surviving parents of a deceased Military or Uniformed
Services Personnel who are primarily dependent on the
deceased for support, or in default thereof, surviving siblings
who are under twenty-one (21) years of age and unmarried:
Provided, That the conviction of the parent or sibling of the
deceased for any crime which carries a penalty of imprisonment
of more than six (6) years and one (1) day, or loss of Philippine
Citizenship shall terminate the entitlement of such parent or
sibling to benefits under this Act;

() "Death or physical disability in line of duty" shall refer to death, illness
or injury incurred while in the Active Service and not attended by
misconduct, willful failure, the use of drugs or alcoholic liquor or
vicious or immoral habits.

SECTION 4. Applicability. - This Act shall apply only to all new entrants of
the Military and Uniformed Services unless otherwise specified in the
succeeding provisions of this Act.

SECTION 5. Compulsory Retirement. — The following active Military or
Uniformed Services Personnel shall be compulsorily retired:

(a) Those who attain the age of sixty-five (65); Provided, that he/she has
accumulated at least thirty (30) years of satisfactory Active Service;

(b) Those who suffer death in line of duty: Provided, that he/she has
accumulated at least thirty (30) years of satisfactory Active Service;


(c) Those who incur total permanent physical disability in line of duty:
Provided, That he/she has accumulated at least thirty (30) years of
satisfactory Active Service;

(d) Those who are killed in action;

(e) Those who are wounded in action and incur total permanent physical
disability as a result thereof;

() Those subject to attrition, as provided in Section 8 of this Act;
provided, that he/she has accumulated at least thirty (30) years of
satisfactory Active Service; or

(g) Those separated by the appropriate Disciplinary Board under Section
14 of this Act; provided, that he/she has accumulated at least thirty
(30) years of satisfactory Active Service.

SECTION 6. Voluntary Retirement. - Upon accumulation of at least thirty
(30) years of satisfactory Active Service, a Military or Uniformed Services
Personnel may, at his/her own request, be retired from Active Service,
subject to the approval of appropriate authority as provided in the
Implementing Rules and Regulations of this Act.

SECTION 7. Compulsory Separation. - The following Military or
Uniformed Services Personnel shall be compulsorily separated from the
Active Service:

(a) Those who attain the age of sixty-five (65) without having accumulated
at least thirty (30) years of satisfactory Active Service;

(b) Those who suffer death in line of duty but without having
accumulated at least thirty (30) years of satisfactory Active Service;

() Those who incur total permanent physical disability in line of duty but
without having accumulated at least thirty (30) years of satisfactory
Active Service;

(d) Those subject to attrition, as provided in Section 8 of this Act, without
having accumulated at least thirty (30) years of satisfactory Active
Service; or

(e) Those separated by the appropriate Disciplinary Board under Section
14 of this Act without having accumulated at least thirty (30) years of
satisfactory Active Service.

SECTION 8. Attrition. - The attrition systems of Military or Uniformed
Services shall be provided for in the Implementing Rules and Regulations of
this Act.


SECTION 9. Voluntary Separation. - A Military or Uniformed Services
Personnel, who has not accumulated at least thirty (30) years of satisfactory
Active Service, may, at his/her own request, resign from Active Service,
subject to the approval of appropriate authority as provided in the
Implementing Rules and Regulations of this Act.

SECTION 10. Gratuity and Retirement Pay. - When a Military or
Uniformed Services Personnel is retired under Title IV of this Act, he/she
shall, at his/her option, receive:

(a) Gratuity Pay - equivalent to one (1) month of base and longevity pay of
the permanent grade last held for every year of service payable in one
(1) lump sum; or

(b) Retirement Pay - 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 permanent grade last held; provided, further, that when he/she
retires, he/she shall be entitled to receive a lump sum equal to
eighteen (18) months of his monthly retirement pay, and thereafter
receive his/her annual retirement pay payable in equal monthly
installments upon reaching sixty (60) years of age; provided, finally,
that if he/she dies before his/her retirement pay begins to accrue,
and is survived by beneficiaries as defined in this Act, the latter shall
receive only the derivative benefits thereunder when they accrue.

Pension payments for those retired under Title IV shall commence
immediately after their retirement from the service, except for those
retired due to Attrition under Section 5 (f). Honorably Discharged
under Section 5 (g), and those who avail of Voluntary Retirement
under Section 6 shall be eligible to receive monthly retirement pay
only upon reaching the age of sixty (60); provided, further, that the
retirement pay of those that are Killed in Action under Section 5 (d),
and those that are Wounded in Action resulting in Total Permanent
Disability shall be computed at the rate of ninety (90%) of their
monthly base and longevity pay regardless of their years in Active
Service: provided, finally, that nothing in this Section shall be
construed as authorizing adjustment of pay, or payment of any
differential in retirement pay to Military or Uniformed Services
Personnel who are already retired prior to the approval of this Act as a
result of increases in salary of those in the Active Service may have
their retirement pension adjusted based on the rank they hold and on
the prevailing pay of

military personnel in the Active Service, at the time of the termination
of their recall to Active Service.

SECTION 11. Separation Pay. - Except for those provided for in Section 13


of this Act, when a Military or Uniformed Services Personnel is separated
from the service under Section 7 and Section 9 of Title V of this Act, he/she,
or his/her survivors as defined in this Act, shall receive a separation pay
equivalent to one-month base plus longevity pay of the permanent grade
he/she holds for every year of Active Service: provided, that nothing in this
Section shall be construed as authorizing adjustment of pay, or payment of
any differential in separation pay to Military or Uniformed Services
Personnel who are already retired or separated from the service prior to the
approval of this Act as a result of increases in salary granted to Military or
Uniformed Services Personnel in Active Service.

SECTION 12. Survivorship Benefits. - The qualified survivors, as defined
in this Act, of a deceased Military or Uniformed Services Personnel retired
under Title IV, and Section 7 (b) and 7 (c) of Title V of this Act shall be
entitled to a monthly annuity equivalent to seventy-five percent (75%) of
his/her monthly retirement pay which he/she was receiving to be divided
among them in equal shares and with the right of accretion; provided, that
the minimum monthly annuity to be received shall be equivalent to fifty
percent (50%) of the base and longevity pay of the permanent grade last
held.

SECTION 13. Benefits for Death and Total Permanent Disability in
Line of Duty. - A Military or Uniformed Services Personnel separated under
Section 7(b) and 7(c) of Title V of this Act shall be entitled to a monthly life
annuity the amount of which shall be fifty per centum (50%) of the base and
longevity pay computed on the basis of his/her actual rank held at time of
death or disability.

SECTION 14. Separation by the Disciplinary Board. ~ A Military or
Uniformed Services Personnel referred to and found by the appropriate
Disciplinary Board not fit for retention in the Active Service because of
substandard performance, low potentiality, doubtful integrity and/or acts
inconsistent with the best interest of the service shall be separated from the
Active Service, subject to the approval of appropriate Disciplining Authority
as provided in the Implementing Rules and Regulations of this Act; provided,
that the Disciplining Authority, based on the facts and circumstances of the
case, shall determine whether the subject Military or Uniformed Services
Personnel shall be granted an Honorable Discharge and is entitled to receive
benefits under Sections 10 or 11, as applicable, of Title VI of this Act,
otherwise, all benefits under this act shall be forfeited.

SECTION 15. Disability Pension. - A Military or Uniformed Services
Personnel retired for disability which is the proximate result of wounds or
injuries received or sickness or disease incurred in line of duty or as a battle
casualty shall receive, in addition to the other benefits under this Act,
Disability Pension fixed as follows:

(a) If and while the disability is rated twenty-five percent (25%), the
monthly pension shall be PHP 2,500.00;


(b) If and while the disability is rated fifty percent (50%), the monthly
pension shall be PHP 5,000.00;

(c) If and while the disability is rated sixty percent (60%), the monthly
pension shall be PHP 6,000.00;

(a) If and while the disability is rated seventy percent (70%), the monthly
pension shall be PHP 7,000.00;

(c) If and while the disability is rated eighty percent (80%), the monthly
pension shall be PHP 8,000.00;

(9 If and while the disability is rated ninety percent (90%), the monthly
pension shall be PHP 9,000.00; or

(g) If and while the disability is rated one hundred percent (100%), the
monthly pension shall be PHP 10,000.00.

SECTION 16. Manner of Increase of Pension Benefits. - The automatic
indexing of Gratuity and Retirement Pay, and Survivorship Benefits of
pensioners with the salary increases of active Military and Uniformed
Services Personnel is hereby terminated.

Pension benefits shall be reviewed annually and increases and/or
adjustments in

Gratuity and Retirement Pay, and Survivorship Benefits, will be based on
the recommendation of the actuary of the Pension Fund and approved by
the Board of Directors of the Fund Manager of the Military and Uniformed
Personnel Retirement Fund (MUPRF).

SECTION 17. Creation of the Military and Uniformed Personnel Fund
Authority. - For the purpose of carrying out and effecting the declared
policy, as provided for in Section 2 hereof, there is hereby created a
government instrumentality with corporate powers as defined in Section 3
(n) of Republic Act No. 10149 or the GOCC Governance Act of 2011, to be
known as the Military and Uniformed Personnel Fund Authority which shall
be organized within six (6) months from the approval of this Act. The
Authority shall execute its powers and functions through its Board of
Directors, in such a manner, as will, in its judgment, aid to the fullest
possible extent in carrying out the aims and purposes of this Act.

SECTION 18. Board of Directors, Composition. — The powers and
functions of the Authority shall be exercised by the Board of Directors
composed by the Chairman and President of the Authority, which shall be
appointed by the President of the Philippines, and ten (10) other members:
four (4) of whom shall be ex-officio Members from the Department of
National Defense, Department of the Interior and Local Government,
Department of Justice, Department of Transportation, Department of


Finance and Department of Budget and Management as designated by the
concerned Department Secretary from the undersecretaries of the concerned
Departments: another three (3) shall be appointed by the President of the
Philippines from the banking, finance, investment, and insurance sector,
and one (1) shall be appointed by the President of the Philippines from the
legal profession. The Board of Directors shall elect from amongst themselves
a Vice-Chairman.

The Members of the Board the Department Undersecretaries, shall hold
office for

six (6) years without reappointment, or until their successors are duly
appointed and qualified. Vacancy, other than through the expiration of the
term, shall be filled for the unexpired term only: provided, that, the
Chairman and President shall be initially appointed to a six (6) year term,
and one (1) member to a five (5) year term, one (1) member to a four (4) year
term, one (1) member to a three (3) year term, and the representative from
the legal profession to an initial term of two (2) years.

SECTION 19. Funding Sources. - Aside from the initial proposed
capitalization, the MUPRF shall be funded through the following:

(a) If and while the disability is rated twenty-five percent (25%), the
monthly pension shall be PHP 2,500.00;

i. For the first three (3) years after the effectivity of this Act, New
Entrants and Active Members shall contribute five percent (5%)
of their monthly base and longevity pay as personal share, while
the National Government shall provide an equivalent of twenty-
two (22%) as its share;

ii, After such period, for the next three years. New Entrants and
Active Members shall contribute seven percent (7%), while the
National Government shall provide twenty percent (20%); and

iii, For every year thereafter. New Entrants and Active Members
shall contribute nine percent (9%) and the National Government
shall provide eighteen percent (18%).

iv. Additional funds to cover past service of Active Members subject
to the recommendation of the actuary of the Pension Fund and
approved by the Board of Directors of the Fund Manager of the
Military and Uniformed Personnel Retirement Fund (MUPRF).

(b) Additional Sources of Funding - Additional funds for the maintenance
of the MUPRF shall be sourced from the proceeds derived from the
lease, joint development, or disposition of the assets of the Military
and Uniformed Services, and other government properties identified
for that purpose


SECTION 20. Termination of Other Contributions of the Same Nature. -
Upon the effectivity of this Act, other mandatory contributions by Military
and Uniformed Services Personnel in the same nature and purpose, for their
retirement benefits and pension, shall immediately cease and be subject to
the provisions of this Act instead.

SECTION 21. Retirement Grade. - Military and Uniformed Services
members, officers and other ranks, covered under this Act shall be retired in
the grade they hold at the time of their retirement.

SECTION 22. Retired List. - Military and Uniformed Service Personnel
retired under Title IV of this Act shall be carried in the retired list of the
applicable Military and Uniformed Services. The name of a retiree who loses
his/her Filipino citizenship shall be removed from the Retired List and
his/her retirement benefits terminated upon such loss.

SECTION 23. Recall to Active Service. - (1) AFP Personnel carried in the
retired list shall be subject to the Articles of War and may be recalled at any
time by the President to Active Service in the permanent grade last held
upon retirement. His/her refusal to perform such duty shall be a ground for
court-martial under Article 97 of the Articles of War and subsequent
termination of payments of benefits as determined by the court martial.

(2) When recalled to Active Service, a retiree shall receive the pay and
allowances of the permanent grade last held and shall continue to be carried
in the retired list and shall be eligible for promotion in the retired list as long
as he/she remains in active status.

SECTION 24. Non-Encumbrance of Benefits. - The benefits authorized
under this Act, except as provided herein, shall not be subject to
attachment, garnishment, levy, execution or any tax whatsoever; neither
shall they be assigned, ceded, or conveyed to any third person; provided,
that if a retired or separated Military or Uniformed Services Personnel who is
entitled to any benefit under this Act has unsettled money and/or property
accountabilities incurred while in the Active Service, not more than fifty
percent (50%) of the pension gratuity or other payment due such Military or
Uniformed Services Personnel or his/her survivors under this Act may be
withheld and be applied to settle such accountabilities.

SECTION 25. Accrual of Benefits to Personnel Separated by Court
Martial. - The benefits authorized under this Act shall accrue to AFP
Personnel separated by court martial action except when non-entitlement of
such benefits is expressly adjudged by the military court and approved by
the approving authority.

SECTION 26. Non-Diminution of Benefits. — Nothing in this Act shall be
construed in any manner to reduce whatever retirement and separation pay
or gratuity or other monetary benefits which any person is heretofore
receiving or is entitled to receive under the provisions of existing law.


SECTION 27. Penal Clause. - Any person found to have participated
directly or indirectly in the commission of fraud, falsification,
misrepresentation of facts, collusion or any similar anomaly in the issuance
of any certificate or document for any purpose connected with this Act shall
upon conviction be punished by a fine of not less than the amount
defrauded but not more than threefold such amount and/or imprisonment
of not less than six (6) months and one (1) day to six (6) years and perpetual
disqualification from holding public office and from practicing any
profession or calling licensed by the government.

SECTION 28. Implementing Rules and Regulations. - Within sixty (60)
days upon the effectivity of this Act, the Department of Finance, Department
of National Defense, Department of the Interior and Local Government,
Department of Justice, Department of Transportation, Department of
Environment and Natural Resources, Government Service Insurance
System, and the Department of Budget and Management, in coordination
with the AFP, PNP, PCG, BJMP, BFP, BuCor and NAMRIA and other relevant
offices shall formulate and issue the Implementing Rules and Regulations
necessary for the effective implementation hereof.

SECTION 28. Repealing and Modifying Clause. — Presidential Decree No.
1656, Presidential Decree No. 1638, Republic Act No. 340, Republic Act No.
5976, Republic Act No. 6975, Republic Act No. 8551, Republic Act No. 9263,
Republic Act No. 9993, Republic Act No. 10575, and all laws, rules and
regulations, and other issuances or parts thereof, which are inconsistent
with the provisions of this Act are hereby repealed or modified accordingly

SECTION 29. Separability Clause. - If any provision of this Act shall be
declared invalid or unconstitutional, the remaining parts or provisions not
otherwise affected shall remain in force and effect.

SECTION 30. Effectivity. - This Act shall take effect fifteen (15) days
following its complete publication in the Official Gazette or in two (2)
national newspapers of general circulation.

Approved,