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NINETEENTH CONGRESS OF THE ) Is * REC EINED iva Poe
REPUBLIC OF THE PHILIPPINES ) (2 BATE: Te)
First Regular Session )
HOUSE OF REPRESENTATIVES
H.B.No,__ 2998

Introduced by Representative Ralph G. Recto

AN ACT
STRENGTHENING THE MILITARY AND UNIFORMED PERSONNEL PENSION
SYSTEM, CREATING THE MILITARY AND UNIFORMED PERSONNEL
INSURANCE FUND, AMENDING SECTIONS 3 AND 24 OF REPUBLIC ACT
NUMBER 8291, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Uniformed services are vested with the Aegean tasks of upholding Philippine
sovereignty and territorial integrity, protecting lives and properties, and maintaining
peace, order, and safety. To perform their respective mandates, uniformed services
engage in the active recruitment of their respective manpower complement. Such
recruitment of military men, police officers, firefighters, jail custodians, and
coastguardsmen, will invariably result not only in increased operational cost today, but
also in higher pension payments in the future.

The current system of financing the pension requirements of military and
uniformed personnel retirees, however, is unsustainable, if not fiscally irresponsible.
The pension system is entirely dependent on the funds appropriated for pension
requirements in the annual general appropriations. Apart from the resulting delays in
the payment of pension claims, the government is also burdened by the need to
appropriate funds for a ballooning pension requirement without a viable fund source,
For 2022, the government has obligated P153.13 billion, or 3.05% of the National
Expenditure Program, for military and uniformed personnel pension — an amount
equivalent to 138.68% of the amount obligated for the same purpose just a decade
ago. This figure is equivalent to about 89% of the amount obligated for military and


uniformed personnel base pay for the same year. Without ample intervention, funding
requirements for pensioners shall eclipse the operational requirements of all active
uniformed services in the country.

This bill seeks to arrest this impending fiscal disaster by establishing a
government-guaranteed insurance fund to cover the insurance needs of new entrants
to the uniformed services of the government. This fund shall be managed by the
Government Service Insurance System (GSIS) and shall be supported by agency
contributions equivalent to 21% of the total monthly base pay of their respective
uniformed personnel. Proceeds from investing the fund shall then be used to pay for
the separation or retirement benefits of qualified uniformed personnel member. This
bill also ensures that existing pensioners and uniformed personnel in active service
prior to its approval shall enjoy the prevailing retirement benefits at the time of their
initial appointment, recruitment, or admission to the uniformed services.

Through the creation of the Military and Uniformed Personnel (MUP) Insurance
Fund, itis hoped that a viable and sustainable funding source for pension requirements
shall be secured, and a responsible management of scant government resources shall
be realized,

In view of the foregoing, the swift passage of this measures earnestly sought.

Jind


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NINETEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES )
First Regular Session )
HOUSE OF REPRESENTATIVES

H.B.No,__2558

Introduced by Representative Ralph G. Recto

AN ACT
STRENGTHENING THE MILITARY AND UNIFORMED PERSONNEL PENSION
SYSTEM, CREATING THE MILITARY AND UNIFORMED PERSONNEL
INSURANCE FUND, AMENDING SECTIONS 3 AND 24 OF REPUBLIC ACT
NUMBER 8291, 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 Insurance Fund Act.”

Sec. 2. Declaration of Policy and Objectives. — The State recognizes the
invaluable contribution of the uniformed services in providing an environment
conducive to nation-building and economic development. The State likewise
recognizes the role of uniformed personnel who faithfully carry out their mandate to
uphold Philippine sovereignty and territorial integrity; to protect lives and properties;
and to maintain peace, order, and safety ~ often at great personal risk and peril. To
recompense such dedicated performance of duty, it is hereby declared the policy of
the State to provide immediate and adequate care, benefits, and other forms of
assistance to veterans of the uniformed services, as well as to their surviving spouses
and orphans. Towards this end, the State shall develop a sound, viable, and tax-
exempt military and uniformed personnel insurance and pension fund that caters to
the needs of the uniformed personnel of the National Government, and motivates
them to faithfully abide by their commitments to the country and its people.

Sec. 3. Definition of Terms. ~ For the purposes of this Act:


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(a) Military and Uniformed Personnel (MUP) Insurance Fund shall refer to the
special insurance fund for the new entrants to the uniformed services of the National
Government created under Section 4 of this Act;

(b) Base Pay shall refer to the primary cash compensation for work performed
by uniformed personnel of the uniformed services, excluding any other pay,
allowances, benefits or incentives;

(©) Government. Service Insurance System (GSIS) shall refer to the
Government Service Insurance System created by Commonwealth Act No. 186, as
amended;

(d) New Entrants shall refer to newly-appointed, -recruited or -admitted
uniformed personnel of the uniformed services after the effectivity of this Act;

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

(f) Uniformed Services shall refer to the Armed Forces of the Philippines (AFP),
Philippine National Police (PNP), Bureau of Fire Protection (BFP), Bureau of Jail
Management and Penology (BJMP), Philippine Coast Guard (PCG) and commissioned
corps of the National Mapping and Resource Information Authority (NAMRIA).

Sec. 4. Military and Uniformed Personnel Insurance Fund. — To carry out the
purposes of this Act, the Military and Uniformed Personnel Insurance Fund is hereby
created, herein referred to as the MUP Insurance Fund, as a special insurance fund
for the new entrants to the uniformed services who received their initial appointments
after the effectivity of this Act.

The GSIS shall be responsible for the administration of the MUP Insurance Fund
and the implementation of the provisions of this Act: Provided, That the MUP
Insurance Fund shall be administered and reported separately from the GSIS Social
Insurance Fund provided under Section 34 of Republic Act No. 8291, otherwise known
as “The Government Service Insurance System Act of 1997."

The MUP Insurance Fund shall not be used for purposes other than those
provided for under this Act. No portion of the MUP Insurance Fund or income thereof
shall accrue to the General Fund of the national government and its political
subdivisions, instrumentalities and other agencies including government-owned and
controlled corporations except as may be allowed under this Act.


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Sec. 5. Coverage. ~ Upon recruitment, appointment or admission, coverage in
the MUP Insurance Fund shall be mandatory for all new entrants to the uniformed
services.

Sec. 6. Section 3 of Republic Act No. 8291, otherwise known as “The
Government Service Insurance System Act of 1997,” is hereby amended to read as
follows:

“Section 3. Compulsory Membership. — Membership in the GSIS

shall be compulsory for all employees receiving compensation AND FOR

NEW ENTRANTS TO THE UNIFORMED SERVICES COVERED BY

THE MUP INSURANCE FUND, who have not reached the compulsory

retirement age, irrespective of employment status, except [members-of

the-Armed-Forces-of-the-Philippines-and-the-Philippine-National Police;
obligation-with-the-GSIS;-and] contractuals who have no employer and
employee relationship with the agencies they serve.”

Sec. 7. Section 24 of Republic Act No. 8291, otherwise known as “The
Government Service Insurance System Act of 1997,” is hereby amended to read as

follows:
“Section 24. Compulsory Life Insurance, — All employees [exept
for-Members-of-the-Armed—Forces-of-the-Philippines_(AFP)-and-the
Phitippine—Nationat-Police-{PNP)] AND NEW ENTRANTS TO THE
UNIFORMED SERVICES COVERED BY THE MUP INSURANCE
FUND shall, under such terms and conditions as may be promulgated
by the GSIS, be compulsorily covered with life insurance, which shall
automatically take effect as follows:
OK
Sec. 8. MUP Insurance Fund Generation. - The government agency concerned
shall contribute to the MUP Insurance Fund an amount equivalent to twenty-one
percent (21%) of the monthly base pay of their uniformed personnel appointed after
the effectivity of this Act.

The government agency concerned shall include in its annual appropriation
such sums as may be necessary to cover the required contribution provided for in this


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Act. The manner of collection and remittance of contributions to the MUP Insurance
Fund shall be in accordance with the relevant provisions of Republic Act No. 8291,
otherwise known as “ 7he Government Service Insurance System Act of 1997."

Sec. 9. MUP Insurance Fund Investments. — The portions of the MUP Insurance
Fund which are not needed to meet any current obligation may be invested in
accordance with Section 36 of Republic Act No. 8291, otherwise known as “ The
Government Service Insurance System Act of 1997."

Sec. 10. Retirement, Separation and Other Benefits. - The provision of
retirement, separation, and other benefits chargeable against the MUP Insurance
Fund, including eligibility requirements, shall be governed by the relevant provisions
of Republic Act No. 8291, otherwise known as “The Government Service Insurance
System Act of 1997."

Sec. 11. Grant of Additional Retirement and Separation Benefits. - GSIS may,
upon determination of actuarial soundness, provide better pension benefits to qualified
military and uniformed personnel retirees covered by the MUP Insurance Fund.

Sec, 12. Exemptions from Tax, Legal Process and Lien. — Any provision of the
law to the contrary notwithstanding, all contributions for the MUP Insurance Fund and
all accruals thereto and income or investment earnings therefrom shall be exempt
from any tax, assessment, fee, charge, or customs or import duty in accordance with
Section 39 of Republic Act No. 8291, otherwise known as “ The Government Service
Insurance System Act of 1997."

Sec. 13. Government Guarantee. - The government of the Republic of the
Philippines hereby guarantees the fulfillment of the obligations of the GSIS to military
and uniformed personnel members covered by the MUP Insurance Fund as and when
they fall due.

Sec. 14. Cost of MUP Insurance Fund Administration. - The MUP Insurance
Fund shall bear the costs of its administration and development, in such amounts and
for limits as the GSIS Board of Trustees may deem appropriate, but not exceeding ten
percent (10%) of the annual revenues from all sources: Provided, That the President
of the Philippines may, on the basis of actuarial and management studies, increase
the allotment for the administrative and operational expenses for the MUP Insurance
Fund.


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Sec. 15. Audit. - The audit of the MUP Insurance Fund shall be conducted in
accordance with Section 22 of Republic Act No. 8291, otherwise known as “7he
Government Service Insurance System Act of 1997."

Sec. 16. Pension Benefits for Pensioners and Active Uniformed Personnel Prior
to the Effectivity of this Act. — Existing pensioners and uniformed personnel in active
duty prior to the effectivity of this Act shall enjoy the retirement benefits provided
under Presidential Decree No. 1638 as amended, Republic Act No. 6975 as amended
by Republic Act No. 8551, Republic Act No. 9993, and other applicable laws.

Sec. 17. Appropriations. — The amount necessary for the implementation of the
provisions of this Act shall be included in the annual General Appropriations Act
following its enactment into law.

Sec. 18. Implementing Rules and Regulations. — Within ninety (90) days from
effectivity of this Act, the GSIS and the Department of Budget and Management (DBM)
shall, in coordination with the Department of Environment and Natural Resources
(DENR), the Department of the Interior and Local Government (DILG), the
Department of National Defense (DND), and the Department of Transportation
(DOTr), and after consultation with directly affected stakeholders, promulgate the
rules and regulations to effectively implement the provisions of this Act.

Sec. 19. Separability Clause. - If any provision, section or part of this Act shall
be declared unconstitutional or invalid, such judgment shall not affect, invalidate or
impair any other provisions, sections or parts hereof.

Sec. 20. Repealing Clause. — All laws, decrees, orders, rules and regulations
which are inconsistent with the provisions of this Act are hereby repealed, amended
or modified accordingly.

Sec. 21. Effectivity. — This Act shall take effect fifteen (15) days following its
publication in at least two (2) newspapers of general circulation or in the Official
Gazette.

Approved,