NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
o{ tl)r feerrftar.T'
23 NOV 29 PI :13
RECEIVED BV;
SENATE
COMMITTEE REPORT No.
173
Submitted jointly by the Committees on National Defense and Security, Peace, 
Unification and Reconciliation; Government Corporations and Public Enterprises; Ways
and Means; and Finance on NOV 2 9 2023 
Re: Senate Bill No. 
________________
Recommending its approval in substitution of Senate Bill Nos. 284, 1421, 2434 and 
2446 taking into consideration House Bill No. 8969
Sponsor: Senator Jinggoy Ejercito Estrada
MR. PRESIDENT;
The Committees on National Defense and Security, Peace, Unification and 
Reconciliation; Government Corporations and Public Enterprises; Ways and Means; 
and Finance, to which were referred Senate Bill No. 284, introduced by Senator 
Jinggoy Ejercito Estrada, entitled:
"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"
Senate Bill No. 1421, introduced by Senator Ramon Bong Revilla Jr., entitled:
"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"
Senate Bill No. 2434, introduced by Senator Imee R. Marcos, entitled:
"AN ACT
CREATING A SUSTAINABLE FRAMEWORK FOR THE PENSION 
SYSTEM OF THE ARMED FORCES OF THE PHILIPPINES, 
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES"
Senate Bill No. 2446, introduced by Senator Win Gatchalian, entitled:
"AN ACT
STRENGTHENING THE MILITARY AND UNIFORMED PERSONNEL 
PENSION SYSTEM, CREATING THE MILITARY AND UNIFORMED 
PERSONNEL INSURANCE FUND, AMENDING FOR THIS PURPOSE 
REPUBLIC ACT NO. 8291, OTHERWISE KNOWN AS "THE 
GOVERNMENT SERVICE INSURANCE SYSTEM ACT OF 1997", AND 
FOR OTHER PURPOSES"
taking into consideration House Bill No. 8969, introduced by Representatives 
Romualdez (F.M.), Romualdez (Y.M.) Acidre, Dalipe, Salceda, Matugas, et a!., 
entitled:


"AN ACT
CREATING A SUSTAINABLE FISCAL FRAMEWORK FOR THE 
PENSION SYSTEM OF THE MILITARY AND UNIFORMED 
PERSONNEL, PROVIDING MECHANISMS FOR THE DISPOSITION OF 
GOVERNMENT ASSETS FOR THE PURPOSE, AND APPROPRIATING 
FUNDS THEREFOR"
prepared by
have considered the same and have the honor to report them back to the Senate with 
the recommendation that the attached Senate Bill No. ^501 
the Committees, entitled:
"AN ACT
PROVIDING A NEW SEPARATION, RETIREMENT AND PENSION 
SYSTEM FOR THE MILITARY AND THE UNIFORMED PERSONNEL,
AND APPROPRIATING FUNDS THEREFOR"
be approved in substitution of Senate Bill Nos. 284, 1421, 2434 and 2446, taking into 
consideration House Bill No. 8969, with Senators Ejercito Estrada, Revilla Jr., Marcos, and 
Gatchalian as authors thereof.
Respectfully Submitted: 
Chairpersons
L
:N. JINGGOY EJERCITO ESTRADA
Committee on National Defense and Security, 
mification and Reconciliation; 
Vice-Chairperson, Committee on Finance;
Member, Committee on Government Corporations and 
Public Enterprises


SEN. ALAN PETER "COMPANERO" S. CAYETANO
Committee on Government Corporations and Public 
Enterprises;
Member, Committee on National Defense and Security, 
Pe^eeTUnffitation and Reconciliation; 
fember. Committee on Finance
SEN. WIN GATCHALIAN
Cqrnmitte^on Ways and Means; 
Vice=Ct»€ritperson, Committee on Finance; 
Member, Committee on National Defense 
and Security, Peace, Unification and 
Reconciliation
SEN. SONNY ANGARA
Committee on Finance;
Vice-Chairperson, Committee on Ways and Means; 
Member, Committee on National Defense 
and Security, Peace, Unification and 
Reconciliation
Vice-Chairpersons
SEN. PIA S. CAYETANO
Senior Vice Chairperson, Committee on 
Finance;
Member, Committee on National Defense 
and Security, Peace, Unification and 
Reconciliation;
Member, Committee on Government 
Corporations and Public Enterprises; 
Member, Committee on Ways and Means
lEE R. MARCOS
Senior Vice Chairperson, Committee on 
Finance;
Member, Committee on National 
Defense and Security, Peace, 
Unification and Reconciliation;
Member, Committee on Ways and 
Means


SEN. RAMON BONG REVILLA JR.
Committeeyn National Defense and 
Security, Peace, Unification and 
Reconciliation;
Member, Committee on Finance
DELA ROSA
efense and 
bn and
SEN. RONAL
Committee on 
Security, Peao 
Reconciliation;
Committee on Finance;
Member, Committee on Government 
Corporations and Public Enterprises; 
Member, Committee on Ways and
[urlH 
Means
SEN. CHMSTOPHER "BONG" GO
Committ^on National Defense and 
Security/Peace, Unification and 
Reconciliation;
Committee on Finance;
Member, Committee on Government 
Corporations and Public Enterprises; 
Member, Committee on Ways and Means
ROBII^OOD C. PADILLA
Con^ttee ^ National Defense and 
S^rity, f^ce. Unification and 
(econcili^ion;
Member^ Committee on Finance;
Member, Committee on Government 
Corporations and Public Enterprises
V
SEN. CYNTHIA A. VILLAI
Committee on Finance;
Member, Committee on National Defense 
and Security, Peace, Unification and 
Reconciliation;
SEN. JOSEPH VICTOR G. EJERCITO
Committee on National Defense and 
Security, Peace, Unification and 
Reconciliation;
Committee on Finance;
Member, Committee on Government 
Corporations and Public Enterprises; 
Member, Committee on Ways and 
Means
ANCIS "TOL" N. 
INO
Committee on National Defense and 
Security, Peace, Unification and 
Reconciliation;
Committee on Finance;
Member, Committee on Ways and 
Means
SEN. RISA HONTIVEROSt)
Committee on Finance;
Member, Committee on National 
Defense and Security, Peace, 
Unification and Reconciliation; 
Member, Committee on Government 
Corporations and Public Enterprises; 
Member, Committee on Ways and
Meansai( 
\


SEN. MARIA LOURpES NANCY S. 
BINAY
Committee on Finance;
Member, Committee on National Defense 
and Security, Peace, Unification and 
Reconciliation;
Member, Committee on Ways and Means
I
SEN^RACE POE
Corr])mittee on Finance;
Member, Committee on National 
Defense and Security, Peace, 
Unification and Reconciliation; 
Member, Committee on Ways and 
Means
---------------------------------
SEN. MARK VILLAR
Committee on Finance;
Member, Committee on National Defense 
and Security, Peace, Unification and 
Reconciliation;
Member, Committee on Government 
Corporations and Public Enterprises; 
Member, Committee on Ways and Means
SEN. FRANCIS G. ESCUDERO
Committee on National Defense 
Security, ^ace. Unification 
RecondiiatiSnj
CopcMfiittee onJ/iZays-apd Meaf 
)mmitteer5nFinance
SENN^FY T. TUL^
jmmitteg~~ on—National Defense 
SecLlritw——Eeaeer 
Unification
Reconciliation;
Committee on Ways and Means; 
Committee on Finance
Members
SEN. MANUEL ntITO" M. LAPID
and Committee on National Defense and
and
Security, Peace, Unification and 
Reconciliation;
Committee on Government 
Corporations and Public Enterprises; 
Committee on Ways and Means; 
Committee on Finance
and
and


SEN. MARIA LOURDES NANCY S. 
BINAY
Committee on Finance;
Member, Committee on National Defense 
and Security, Peace, Unification and 
Reconciliation;
Member, Committee on Ways and Means
SEN. GRACE POE
Committee on Finance;
Member, Committee on National 
Defense and Security, Peace, 
Unification and Reconciliation; 
Member, Committee on Ways and 
Means
SEN. MARK VILLAR
Committee on Finance;
Member, Committee on National Defense 
and Security, Peace, Unification and 
Reconciliation;
Member, Committee on Government 
Corporations and Public Enterprises; 
Member, Committee on Ways and Means
Members
SEN. FRAl^CXS G. ESCUDERO
Committee on National Defense and 
Security, Peace, Unification and 
Reconciliation;
Committee on Ways and Means; 
Committee on Finance
SEN. RAFFY T. TULFO
Committee on National Defense and 
Security, Peace, Unification and 
Reconciliation;
Committee on Ways and Means; 
Committee on Finance
SEN. MANUEL "LITO" M. LAPID
Committee on National Defense and 
Security, Peace, Unification and 
Reconciliation;
Committee on Government 
Corporations and Public Enterprises; 
Committee on Ways and Means; 
Committee on Finance
6-A


Ex Officio Members
SEN. LOREN LEGARDA
President Pro Tempore 
Senior Vice Chair, Committee on Finance
SEN. JOEL VILLANUEVA
Majority Fioor Leader 
Vice-Chairperson, Committee on 
Government Corporations and Pubiic 
Enterprises
PIMENTEL III
Minority Fioor Leader
HON. JUAN MIGUEL F. ZUBIRI
Senate President


Ex Officio Members
SEN. LOREN LEGARDA
President Pro Tempore 
Senior Vice Chair, Committee on Finance
SEN. JOEL VILLANUEVA
Majority Fioor Leader 
Vice-Chairperson, Committee on 
Government Corporations and Pubiic 
Enterprises
SEN. AQUILINO "KOKO" PIMENTEL III
Minority Fioor Leader
HON. JUAN MIGUEL F. ZUBIRI
Senate President
7-A


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
SENATE 
S. B. No. ^501
o( tlje &i‘fr?L; ;
23 NOV 29 PI :13
RECEIVED BV;
(In Substitution of Senate Biii Nos. 284, 1421, 2434 and 2446 taking into
consideration HBN 8969)
Prepared and submitted jointly by the Committees on National Defense and Security, 
Peace, Unification and Reconciliation; Government Corporations and Public 
Enterprises; Ways and Means; and Finance with Senators Ejercito Estrada, RevHia Jr., 
Marcos and Gatchaiian as authors thereof
AN ACT
PROVIDING A NEW SEPARATION, RETIREMENT AND PENSION SYSTEM 
FOR THE MILITARY AND THE UNIFORMED PERSONNEL, AND 
APPROPRIATING FUNDS THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
TITLE I
2 
GENERAL PROVISIONS
3 
Section 1. Declaration of Policy. - The State duly recognizes the vital role of
4 
the Military and Uniformed Personnel in providing internal and external security,
5 
promoting peace and order, and ensuring public safety.
6 
The State also recognizes its obiigation to ensure a secure, reliable and
7 
sustainable pension system for the Miiitary and Uniformed Personnel given the
8 
distinctive personal risks in their role in nation-building and national defense and
9 
security.
10 
The State shall provide immediate and adequate care, benefits and other forms
11 
of assistance to war veterans and veterans of miiitary campaigns, their surviving
12 
spouses and orphans.
13 
Towards these ends, the State shaii establish a fiscal framework that fully
14 
supports their funding requirements.


1 
Sec. 2. Coverage. - Unless otherwise specified, this Act shall apply only to new
2 
entrants of the Military and Uniformed Services.
3 
Sec. 3. Definition of Terms. -
4 
a) Aieiv Entrants are Military or Uniformed Personnel, as referred under this
5 
Act, who entered or re-entered the Military or Uniformed Services after the
6 
effectivity of this Act;
7 
b) Miiitary Personnei refer to employees of the government who wear
8 
uniforms, with ranks, may be armed or unarmed, primarily involved in
9 
national defense, enforcement of laws, and in the maintenance of peace,
10 
order, and security and who belong to the Armed Forces of the Philippines
11 
(AFP);
12 
c) Uniformed Personnei refer to employees of the government who wear
13 
uniforms, with ranks, may be armed or unarmed, primarily involved in the
14 
enforcement of laws, and in the maintenance of peace, order, and security
15 
and who belong to any of the following services: Philippine National Police
16 
(PNP), Philippine Coast Guard (PCG), Bureau of Fire Protection (BFP),
17 
Bureau of Jail Management and Penology (BJMP), Bureau of Corrections
18 
(BuCor), and the Hydrography Branch of the National Mapping and
19 
Resource Information Authority (NAMRIA);
20 
d) Pension refers to the sum of money representing the monthly retirement
21 
pay or the monthly life annuity of a Military or Uniformed Personnel;
22 
e) Survivors refer to the following:
23 
1) Surviving spouse of the deceased Military or Uniformed Personnel who
24 
married the deceased prior to the latter's retirement or separation and
25 
not legally separated by judicial decree from the deceased issued on
26 
grounds not attributable to the surviving spouse: Provided, That
27 
entitlement to benefits shall terminate when the surviving spouse
28 
remarries, cohabits, engages in a common law relationship, commits any
29 
crime of violence or abuse against the children of the Military or
30 
Uniformed Personnel, is convicted of any crime which carries the penalty
31 
of imprisonment of more than six (6) years and one (1) day, loss of
32 
Philippine citizenship, or dies;


1 
2) Surviving chiidren refers to:
2 
i) 
Children born within a marriage contracted prior to the retirement
3 
or separation from the active duty;
4 
ii) 
Adopted and illegitimate children by the deceased while in active
5 
duty; and
6 
iii) 
Children who are eighteen (18) years oid and above but suffering
7 
from mental or physical incapacity, or any disability that renders
8 
them totaiiy dependent on the deceased.
9 
Provided, That entitlement to benefits shali terminate when the surviving
10 
children attain eighteen (18) years of age or get married, except for
11 
surviving children who were duly medically certified by government
12 
medical practitioners, to be incapable of employment by reason of their
13 
mental or physical incapacity;
14 
3) In the absence of surviving spouse and surviving children as mentioned
15 
in paragraphs (1) and (2) above, survivors shall refer to the surviving
16 
parent or parents, the surviving unmarried brothers and sisters who are
17 
below eighteen (18) years of age and without parentai obligation,
18 
surviving brothers and sisters eighteen (18) years oid and above who
19 
are incapable of employment by reason of their mental or physical
20 
incapacity: Provided, That their entitlement to benefits shall terminate
21 
upon their death; and
22 
f) Survivorship Pension refers to the monthiy benefit or the monthly life
23 
annuity of the beneficiaries of a deceased Miiitary or Uniformed Personnei
24 
who is retired under the provisions of existing laws.
25 
TITLE II
26 
MILITARY PERSONNEL SEPARATION, RETIREMENT
27 
AND PENSION SYSTEM
28 
CHAPTER I
29 
RETIREMENT
30 
Sec. 4. Active Duty. -It shall refer to the service as defined under Republic Act
31 
No. 11709, as amended by Republic Act No. 11939, and its impiementing rules and
32 
regulations.


1 
Sec. 5. Compulsory Retirement - Military Personnel shall be compulsorily
2 
retired from service in accordance with Republic Act No. 11709, as amended by
3 
Republic Act No. 11939, and its implementing rules and regulations.
4 
Military Personnel killed-in-action or wounded-in-action resulting in total
5 
permanent disability as duly certified by the appropriate medical certification process,
6 
shall be deemed compulsorily retired for purposes of computing retirement benefits.
7 
Sec. 6. Optional Retirement - Military Personnel may voluntarily retire upon
8 
accumulation of at least twenty (20) years of satisfactory active duty, subject to the
9 
approval of the appropriate authority.
10 
CHAPTER II
11 
BENEFITS
12 
Sec. 7. Retirement Grade and Pay. -The monthly retirement pay shall be fifty
13 
percent (50%) of the monthly base pay and longevity pay of the permanent grade
14 
last held by the Military Personnel in case of twenty (20) years in active duty,
15 
increasing by two-point five percent (2.5%) for every year of active duty rendered
16 
beyond twenty (20) years to a maximum of ninety percent (90%) for thirty-six (36)
17 
years of active duty and over.
18 
Upon retirement. Military Personnel shall choose between the following modes
19 
of payment of retirement benefits:
20 
a) Lump Sum - To receive in advance and in one lump sum, retirement
21 
benefits equivalent to thirty-six (36) months; and three (3) years thereafter,
22 
to receive monthly retirement benefits as they accrue; or
23 
b) Direct Pension - To receive monthly retirement benefits as they accrue.
24 
The retirement pay of Military Personnel who is killed-in-action or wounded-in-
25 
action resulting in total permanent disability, as duly certified by the appropriate
26 
medical certification process, shall be computed at the rate of ninety percent (90%)
27 
of the monthly base and longevity pay of the retirement grade last held of the
28 
personnel regardless of years in active duty.
29 
Sec. 8. Separation Pay. - Military Personnel who separate or resign from the
30 
service without reaching twenty (20) years of satisfactory active duty shall receive a
31 
separation pay equivalent to one-month base pay plus longevity pay of the permanent
32 
grade held at the time of separation for every year of active duty: Provided, That


1 
such Military Personnei shall have rendered at least nine (9) years of satisfactory
2 
active duty prior to resignation or separation.
3 
Sec. 9. Survivorship Pension Rates. -The survivorship pension rates of Military
4 
Personnel shall be governed by existing laws and regulations created therefor.
5 
Sec. 10. Adjustments in Pension. -There shall be no automatic adjustment of
6 
the pension to the prevailing scale of salary of the active Military Personnel of the
7 
same rank: Provided, That the President of the Philippines is hereby authorized,
8 
subject to the recommendation of the Armed Forces of the Philippines Trust Fund
9 
Committee (AFP Trust Fund Committee) created under this Act, to adjust the
10 
retirement and survivorship pension by not less than one-point five percent (1.5%)
11 
thereof, in consideration of fiscal or economic conditions, as certified by the
12 
Development Budget Coordination Committee.
13 
Sec. 11. Harmonization of Totai Permanent Disabiiity Benefits. - Military
14 
Personnel with total permanent disability as a result of injuries sustained or sickness
15 
contracted in the performance of duty, duly certified by the appropriate medical
16 
certification process, shall be compulsorily retired.
17 
Sec. 12. Termination of Benefits. - Retired Military Personnel who lose their
18 
Filipino citizenship shall be removed from the retired list and forfeit all rights to receive
19 
the benefits herein provided upon such loss.
20 
CHAPTER III
21 
ARMED FORCES OF THE PHILIPPINES TRUST FUND
22 
Sec. 13. Armed Forces of the Phiiippines Trust Fund (AFP Trust Fund). - The
23 
AFP Trust Fund is hereby created for the budgetary support and payment of
24 
separation, retirement, pension, survivorship, and other benefits granted under this
25 
Act.
26 
The AFP Trust Fund is separate and distinct and should not be commingled
27 
with the Government Service Insurance System (GSIS) funds. The GSIS shall not
28 
advance funds and grant any form of loans to the AFP Trust Fund Committee from
29 
the GSIS administered funds.
30 
Sec. 14. Funding Sources. -The AFP Trust Fund shall be funded through the
31 
following:
32 
a) Mandatory Contributions. - Military Personnel shall contribute seven


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5
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19
20 
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23
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27
28
29
30
31
32
percent (7%) of their base pay and longevity pay as personal share and 
the National Government shall contribute fourteen percent (14%) as its 
counterpart share: Provided, That the aforementioned rates may be 
adjusted by the Development Budget Coordination Committee, in 
consultation with the AFP Trust Fund Committee, on account of adverse 
fiscal or economic conditions or the fiscal constraints of the National 
Government;
b) Additional Sources of Funding. -The AFP Trust Fund may be funded from 
the proceeds of the following:
1) All residual assets and funds of the AFP Retirement and Separation 
Benefits System (RSBS);
2) Sale of military reservations, as may be authorized by Congress, 
pursuant to the provisions of existing laws and regulations governing 
sales of government properties, including such immovable and other 
facilities as may be found therein, not otherwise covered by the Bases 
Conversion and Development Authority (BCDA), as provided for in 
Republic Act No. 7227, otherwise known as the "Bases Conversion and 
Development Act of 1992," as amended;
3) Lease or joint development of military reservations, as may be 
authorized by the President, pursuant to the provisions of existing laws 
and regulations governing lease or joint development of government 
properties, including such immovable and other facilities as may be 
found therein, not specifically enumerated under Republic Act No. 
7227, as amended;
4) Income derived from public-private partnerships entered into by the 
Department of National Defense (DND) or the AFP, as may be 
authorized by the President, pursuant to the provisions of existing laws 
and regulations;
5) Non-strategic real estate assets of the DND or the AFP as determined 
by the Secretary of National Defense; and
6) Earnings and dividends from investment made by the GSIS as the fund 
manager.


1 
Sec. 15. AFP Trust Fund Committee. - To carry out the declared policy of this
2 
Act, the AFP Trust Fund Committee, hereinafter referred to as the Trust Fund
3 
Committee, is hereby created. The AFP Trust Fund Committee shall be organized
4 
within ninety (90) days from the effectivity of this Act. It shall be composed of the
5 
following members:
6 
a) Secretary of Finance as Chairperson;
7 
b) Secretary of National Defense as Co-Chairperson;
8 
c) Chief of Staff of the AFP;
9 
d) Secretary of Budget and Management; and
10 
e) President and General Manager of the GSIS.
11 
The Bureau of the Treasury shall serve as the Secretariat of the Trust Fund
12 
Committee and maintain the records and accounts of all investments, receipts,
13 
disbursements, and other transactions relating to the management, administration,
14 
and utilization of the AFP Trust Fund: Provided, That these records and accounts are
15 
maintained in accordance with the existing accounting and auditing laws, rules and
16 
regulations, and audited by the Commission on Audit.
17 
Sec. 16. Powers and Functions of the Trust Fund Committee. - The T rust Fund
18 
Committee shall exercise the following powers and functions:
19 
a) Formulate policies, guidelines and programs to ensure that the AFP Trust
20 
Fund is actuarially and financially optimal and sustainable;
21 
b) Act as Trustee of the AFP Trust Fund and direct how the assets of the AFP
22 
Trust Fund are managed;
23 
c) Perform oversight functions over the AFP Trust Fund manager;
24 
d) Provide the proper mechanisms for consultation and information
25 
dissemination among members regarding the management, utilization,
26 
investment, and administration of AFP Trust Fund;
27 
e) Implement and execute functions related to the disposition of assets
28 
identified under this Act;
29 
f) Commission an actuarial evaluation of the fiscal sustainability of the
30 
separation, retirement 
and pension scheme, 
including specific
31 
recommendations on the rates for contributions and investment options for
32 
the AFP Trust Fund, as applicable;


1 
g) Obtain information from any officer or office of local governments and
2 
agencies and instrumentalities of the National 
Government, as may be
3 
necessary;
4 
h) Assess possible risks to the fiscal sustainability of the pension of Military
5 
Personnel and propose appropriate policy interventions;
6 
i) Identify, manage, and control risks that the pension of the Military Personnel
7 
may pose to the National Government's fiscal position;
8 
j) Inform both Houses of Congress of such risks through the annual Fiscal Risk
9 
Statement and propose legislative reforms to address such risks; and
10 
k) Perform other necessary functions for the effective management of the AFP
11 
Trust Fund.
12 
CHAPTER IV
13 
INVENTORY, ACCOUNTING AND DISPOSITION OF ASSETS
14 
Sec. 17. Inventory of Assets. - Within thirty (30) days from the creation of the
15 
AFP Trust Fund Committee, the Military Service, through the DND, shall submit a
16 
complete list of assets to the AFP Trust Fund Committee to identify additional sources
17 
of funding as provided in Section 14(b) of this Act.
18 
Thereafter, the AFP Trust Fund Committee shall conduct a complete accounting
19 
and inventory of the assets of the Military Service that may be used to support the
20 
AFP Trust Fund, including the amount, value, description and nature of such funds,
21 
properties, assets, records, choses in action, and other rights, claims, or causes of
22 
action pertaining thereto, and submit a report to the Office of the President, both
23 
Houses of Congress, and the Commission on Audit (COA).
24 
Sec. 18. Accounting of Assets. - Within thirty (30) days from the receipt of the
25 
inventory by the AFP Trust Fund Committee, the COA shall audit the accounting and
26 
inventory of the assets of the Military Service to determine the completeness of the
27 
inventory and establish the reasonableness of the asset valuation.
28 
Within one (1) year from the submission of the accounting and inventory of the
29 
assets of the Military Service, the COA shall submit to the AFP Trust Fund Committee,
30 
both Houses of Congress and the Office of the President the audit report, including
31 
the complete list of the assets of the Military Service and their valuation, and the
32 
empirical basis and the methodologies employed for the valuation.


1 
Sec. 19. Disposition of Assets. - The AFP Trust Fund Committee shall
2 
prioritize the disposition modes that may generate income from these assets without
3 
undertaking the sale thereof. The AFP Trust Fund Committee may recommend to the
4 
President the sale of an asset when there is a notice from the GSIS of an unfunded
5 
liability and the AFP Trust Fund is no longer sustainable.
6 
The AFP Trust Fund Committee shall publish any disposition of assets in a
7 
newspaper of general circulation.
8 
TITLE III
9 
UNIFORMED PERSONNEL SEPARATION, RETIREMENT
10 
AND PENSION SYSTEM
11 
CHAPTER I
12 
RETIREMENT
13 
Sec. 20. Active Duty. - Service rendered as an officer and non-officer, cadet,
14 
trainee, draftee, probationary ensign or those rendered as a civilian official or
15 
employee in the Philippine Government.
16 
Sec. 21. Compulsory Retirement - All Uniformed Personnel shall be
17 
compulsorily retired from service upon reaching the age of fifty-seven (57) including
18 
those in the active duty before the enactment of this Act.
19 
Uniformed Personnel killed-in-action or wounded-in-action resulting in total
20 
permanent disability, as duly certified by the appropriate medical certification process,
21 
shall be deemed compulsorily retired for purposes of computing retirement benefits.
22 
Sec. 22. Optional Retirement - Uniformed Personnel may voluntarily retire
23 
upon accumulation of at least twenty (20) years of satisfactory active duty, subject
24 
to the approval of the appropriate authority.
25 
CHAPTER II
26 
BENEFITS
27 
Sec. 23. Retirement Grade and Pay. -The monthly retirement pay shall be fifty
28 
percent (50%) of the monthly base pay and longevity pay of the permanent grade
29 
last held by the Uniformed Personnel in case of twenty (20) years in active duty,
30 
increasing by two-point five percent (2.5%) for every year of active duty rendered
31 
beyond twenty (20) years to a maximum of ninety percent (90%) for thirty-six (36)
32 
years of active duty and over.


1 
Upon retirement, Uniformed Personnei shaii choose between the foliowing
2 
modes of payment of retirement benefits:
3 
a) Lump Sum - To receive in advance and in one lump sum, retirement
4 
benefits equivalent to thirty-six (36) months; and three (3) years
5 
thereafter, to receive monthly retirement benefits as they accrue; or
6 
b) Direct Pension - To receive monthly retirement benefits as they accrue.
7 
The retirement pay of Uniformed Personnel who is killed-in-action or wounded-
8 
in-action resulting in total permanent disability, as duly certified by the appropriate
9 
medical certification process, shall be computed at the rate of ninety percent (90%)
10 
of the monthly base and longevity pay of the retirement grade of the personnel
11 
regardless of years in active duty.
12 
Sec. 24. Separation Pay. - Uniformed Personnel who separate or resign from
13 
the service without reaching twenty (20) years of satisfactory active duty shall receive
14 
a separation pay equivalent to one-month base pay plus longevity pay of the
15 
permanent grade held at the time of separation for every year of active duty:
16 
Provided, That such Uniformed Personnel shall have rendered at least nine (9) years
17 
of satisfactory active duty prior to resignation or separation.
18 
Sec. 25. Survivorship Pension Rates. - The survivorship pension rates of
19 
Uniformed Personnel shall be governed by existing laws and regulations created
20 
therefor.
21 
Sec. 26. Adjustments in Pension. -There shall be no automatic adjustment of
22 
pension to the prevailing scale of salary of the active Uniformed Personnel of the
23 
same rank: Provided, That the President of the Philippines is hereby authorized,
24 
subject to the recommendation of the Uniformed Personnel Trust Fund Committee
25 
created under this Act, to adjust the retirement and survivorship pension by not less
26 
than one-point five percent (1.5%) thereof, in consideration of fiscal or economic
27 
conditions, as certified by the Development Budget Coordination Committee.
28 
Sec. 27. Harmonization of Totai Permanent Disabiiity Benefits. - Uniformed
29 
Personnel with total permanent disability as a result of injuries sustained or sickness
30 
contracted in the performance of duty, duly certified by the appropriate medical
31 
certification process, shall be compulsorily retired.
32 
Sec. 28. Termination of Benefits. - Retired Uniformed Personnel who lose their
10


1 
Filipino citizenship shall be removed from the retired list and forfeit all rights to receive
2 
the benefits herein provided upon such loss.
3 
CHAPTER III
4 
UNIFORMED PERSONNEL TRUST FUND
5 
Sec. 29. Uniformed Personnel Trust Fund. -The Uniformed Personnel Trust
6 
Fund is hereby created for the budgetary support and payment of separation,
7 
retirement, pension, survivorship, and other benefits granted under this Act.
8 
The Uniformed Personnel Trust Fund is separate and distinct and should not be
9 
commingled with the GSIS funds. The GSIS shall not advance funds and grant any
10 
form of loans to the Uniformed Personnel Trust Fund Committee from the GSIS
11 
administered funds.
12 
Sec. 30. Funding Source. - The Uniformed Personnel Trust Fund shall be
13 
funded through the following:
14 
a) Mandatory Contributions. - Uniformed Personnel shall contribute nine
15 
percent (9%) of their monthly base pay and longevity pay as personal share
16 
and the National Government shall contribute twelve percent (12%) as its
17 
counterpart share: Provided, That both the aforementioned rates may be
18 
adjusted by the Development Budget Coordination Committee, in
19 
consultation with the Uniformed Personnel Trust Fund Committee, on
20 
account of adverse fiscal or economic conditions or the fiscal constraints of
21 
the National Government; and
22 
b) Earnings and dividends from investment made by the GSIS as the fund
23 
manager.
24 
Sec. 31. Uniformed Personnel Trust Fund Committee. - To carry out the
25 
declared policy of this Act, the Uniformed Personnel Trust Fund Committee is hereby
26 
created. The Trust Fund Committee shall be organized within ninety (90) days from
27 
the effectivity of this Act. It shall be composed of the following members:
28 
a) Secretary of Finance as Chairperson;
29 
b) Chief of the PNP;
30 
c) Chief of the BFP;
31 
d) Chief of the BJMP;
32 
e) Director General of BuCor;
11


1 
f) Commandant of PCG;
2 
g) Director of the Hydrography Branch of NAMRIA;
3 
h) Secretary of Budget and Management; and
4 
i) President and General Manager of the Government Service Insurance
5 
System (GSIS).
6 
Provided, That the participation of representatives of the Uniformed Personnel
7 
in deliberations and decision-making processes of the Trust Fund Committee shall be
8 
limited to the matters concerning their respective service.
9 
The Bureau of the Treasury shall serve as the Secretariat of the Trust Fund
10 
Committee and maintain the records and accounts of all investments, receipts,
11 
disbursements, and other transactions relating to the management, administration,
12 
and utilization of the Uniformed Personnel Trust Fund: Provided, That these records
13 
and accounts are maintained in accordance with the existing accounting and auditing
14 
laws, rules and regulations, and audited by the COA.
15 
Sec. 32. Powers and Functions of the Trust Fund Committee. - The Uniformed
16 
Personnel Trust Fund Committee shall exercise the following powers and functions:
17 
a) Formulate policies, guidelines and programs to ensure that the fund is
18 
actuarially and financially optimal and sustainable;
19 
b) Act as Trustee of the Uniformed Personnel Trust Fund;
20 
c) Perform oversight functions over the fund manager;
21 
d) Provide the proper mechanisms for consultation and information
22 
dissemination among members regarding the management, utilization,
23 
investment, and administration of funds;
24 
e) Commission an actuarial evaluation of the fiscal sustainability of the
25 
separation, retirement and pension scheme, including specific
26 
recommendations on the rates for contributions and investment options for
27 
the Uniformed Personnel Trust Fund, as applicable;
28 
f) Obtain information from any officer or office of local governments and
29 
agencies and instrumentalities of the National Government, as may be
30 
necessary;
31 
g) Assess possible risks to the fiscal sustainability of the pension of Uniformed
32 
Personnel and propose appropriate policy interventions;
12


1 
h) Identify, manage, and control risks that the pension of the Uniformed
2 
Personnel may pose to the National Government's fiscal position;
3 
i) Inform both Houses of Congress of such risks through the annual Fiscal Risk
4 
Statement and propose legislative reforms to address such risks; and
5 
j) Perform other necessary functions for the effective management of the
6 
Uniformed Personnel Trust Fund.
7 
TITLE IV
8 
MANAGEMENT OF TRUST FUNDS
9 
Sec. 33. Manager of Trust Funds. - The GSIS is hereby designated as the fund
10 
manager of AFP and Uniformed Personnel Trust Funds, and shall:
11 
a) Implement an investment management strategy as directed by the
12 
Committees;
13 
b) Monitor market and economic trends and track securities to make informed
14 
investment decisions that would be beneficial to the continued growth and
15 
sustainability of the trust funds;
16 
c) Present and report its portfolio strategy to the Committees;
17 
d) Design and implement programs that will promote and mobilize earnings,
18 
savings and additional resources for social security expansion and afford
19 
individual members appropriate returns on their savings/investments;
20 
e) Conduct continuing actuarial and statistical studies and valuations to
21 
determine the financial condition of the trust funds and taking into
22 
consideration such studies and valuations, recommend to the Committees
23 
the adjustment of benefits, contributions, interest rates or the allocation of
24 
the funds to the contingencies covered;
25 
f) Track financial results of companies in the portfolio and its various metrics,
26 
including price-to-earnings ratios, inflation-adjusted return, sales, earnings,
27 
and dividends; and
28 
g) Perform other acts necessary to fulfill its mandate under this Act, or such
29 
acts that may be delegated by the Committees.
30 
Sec. 34. Structure, Staffing Pattern, and Operating Budget - The
31 
organizational structure and staffing pattern for the management of the trust funds
32 
within the GSIS and for the creation of the Trust Fund Secretariat within the Bureau
13


1 
of the Treasury shall be approved by the Trust Fund Committees within one hundred
2 
twenty (120) days from the effectivity of this Act, subject to further extensions as
3 
may be approved by the Trust Fund Committees: Provided, That appointees to
4 
various positions shail compiy with the qualification standards approved by the Civil
5 
Service Commission: Provided, further. That the GSIS shali be entitled to reasonable
6 
annual management fees but shall not exceed one percent (1%) of the total assets
7 
managed in each trust fund charged against the respective Trust Funds.
8 
Sec. 35. Tax Treatment of the AFP and Uniformed Personnel Trust Funds. -
9 
Notwithstanding any law to the contrary, the trust funds, its assets, revenues,
10 
including all accruals thereto, and benefits paid, are exempt from all taxes,
11 
assessments, fees, charges, or duties of all kinds. These exemptions shall continue
12 
uniess expressly and specifically revoked.
13 
Subject to Section 41 of this Act, the trust funds, the properties of the Military
14 
identified by the AFP Trust Fund Committee to be disposed and sums or monies for
15 
the payment of the benefits provided under this Act are exempt from attachment,
16 
garnishment, execution, levy or other processes issued by the courts, quasi-judicial
17 
agencies or administrative bodies and from all financial obligations of the members,
18 
including pecuniary accountabiiity arising from or caused or occasioned by the
19 
members' exercise or performance of official functions or duties, or incurred relative
20 
to or in connection with the members' position or work except when the monetary
21 
liability, contractual or otherwise, is in favor of the trust funds.
22 
Ail other applicable tax exemptions granted to the GSIS shall also apply to the
23 
trust funds.
24 
Sec. 36. Government Guarantee. - The government of the Republic of the
25 
Philippines hereby guarantees the fuifiliment of the obligations of the trust funds to
26 
its members when they fall due.
27 
TITLE VI
28 
MISCELLANEOUS, PENAL, AND FINAL PROVISIONS
29 
Sec. 37. Administration of Benefits. - The powers and functions of units or
30 
instrumentaiities of agencies that empioy Military or Uniformed Personnei and
31 
administer their separation, retirement and pension system or parts thereof shaii
32 
remain with the existing offices of their respective agencies.
14


1 
The respective services or mother units shall monitor proof of life or life events
2 
that will affect the qualification of pensioners and beneficiaries to receive the pension
3 
or benefit. The computation of pension and benefits accruing to each retiree or
4 
beneficiary shall be undertaken by the concerned mother unit.
5 
Sec. 38. Adjustments in Salary and Pension Benefits. - Upon the effectivity of
6 
this Act, there shall be a guaranteed annual adjustment in the base pay of three
7 
percent (3%) for the next ten (10) years for those in the active duty and pension
8 
benefits of the retirees.
9 
On the fifth (5th) year, and when the need arises thereafter, there shall be a
10 
review on the base pay and the rule on automatic indexation by the Development
11 
Budget Coordination Committee.
12 
Sec. 39. Separation, Retirement and Pension Benefits of the Active Military and
13 
Uniformed Personnel. - The separation, retirement and pension benefits of Military
14 
or Uniformed Personnel in active duty prior to the effectivity of this Act shall be
15 
governed by existing laws and regulations created therefor and shall be funded
16 
annually under the General Appropriations Act: Provided, That the maximum
17 
retirement pay for active Military or Uniformed Personnel who will compulsorily retire
18 
after the effectivity of this Act shall be increased to ninety percent (90%): Provided,
19 
further. That the rate of ninety percent (90%) shall also apply to those deemed
20 
compulsorily retired by reason of having been killed-in-action or wounded-in-action
21 
after the effectivity of this Act resulting in total permanent disability: Provided, finally,
22 
That the separation, retirement and pension benefits payable to the Uniformed
23 
Personnel from the Bureau of Corrections who were affected by the implementation
24 
of Republic Act No. 10575 or the "Bureau of Corrections Act of 2013" and who may
25 
or may not have contributed to the GSIS, shall also be covered in full by the General
26 
Appropriations Act.
27 
Sec. 40. Medical Insurance. - Military or Uniformed Personnel, who enter the
28 
service after the effectivity of this Act, shall be provided medical insurance upon their
29 
compulsory retirement.
30 
Sec. 41. Non-encumbrance of Benefits. - The benefits authorized under this
31 
Act, except as provided herein, shall not be subject to attachment, garnishment, levy,
32 
execution or any tax whatsoever, and may not be assigned, ceded, or conveyed to
15


1 
any third person: Provided, That if a retired or separated Military or Uniformed
2 
Personnel who is entitled to any benefit under this Act has unsettled money or
3 
property accountabilities incurred while in the active duty, an amount not exceeding
4 
fifty percent (50%) of the pension gratuity or other payment due to the Military or
5 
Uniformed Personnel or their survivors under this Act may be withheld and be applied
6 
to settle such accountabilities.
7 
Sec. 42. Rule on Interpretation. - Nothing in this Act shall be construed as
8 
authorizing any downward adjustment of pay, or payment of any differential in
9 
retirement pay, to Military or Uniformed Personnel who are already retired prior to
10 
the effectivity of this Act.
11 
Sec. 43. Submission of Report to Congress. - In accordance with the pertinent
12 
provisions of this Act and its Implementing Rules and Regulations, and International
13 
Financial Reporting Standards and Principles, the Committees shall submit to both
14 
Houses of Congress every three (3) years after the effectivity of this Act, the financial
15 
statements and reports, and all information as may be required, to monitor and assess
16 
the distribution of retirement benefits and pension, as well as the overall performance
17 
of Military or Uniformed Trust Funds, which are funded in whole or in part by the
18 
National Government.
19 
Sec. 44. Pena! Clause. - Any person who participates directly or indirectly in
20 
the commission of fraud, falsification, misrepresentation of facts, collusion or any
21 
similar anomaly in the issuance of any certificate or document for any purpose
22 
connected with this Act shall, upon conviction, be punished by a fine of not less than
23 
the amount defrauded but not more than threefold of such amount or imprisonment
24 
of not less than six (6) months and one (1) day to six (6) years and perpetual
25 
disqualification from holding public office and from practicing any profession licensed
26 
by the government: Provided, that a conviction or acquittal obtained under this
27 
section shall not be a bar to the filing of an administrative, civil, or criminal case under
28 
existing laws.
29 
Sec. 45. Implementing Rules and Regulations. - Within sixty (60) days from
30 
the effectivity of this Act, the Secretaries of Finance, National Defense, Interior and
31 
Local Government, Justice, Transportation, Environment and Natural Resources,
32 
Budget and Management, and the President and General Manager of the GSIS, in
16


1 
consultation with the concerned Military or Uniformed Services, shall promulgate the
2 
necessary rules and regulations for the effective implementation of this Act: Provided,
3 
That the non-promulgation of the implementing rules and regulations shall not
4 
prevent the implementation of this Act upon effectivity.
5 
Supplemental rules and regulations governing the management and
6 
administration of the pension system of the Military or Uniformed Personnel may be
7 
issued within one (1) year from the effectivity of this Act.
8 
Sec. 46. Separability Clause. - If any provision or part of this Act is declared
9 
invalid or unconstitutional, the remaining parts or provisions not affected shali remain
10 
in full force and effect.
11 
Sec. 47. Repealing Clause. - The pertinent provisions of these laws are hereby
12 
repealed, amended, or modified accordingly.
13 
a) Section 11 of Republic Act No. 340, as amended, entitled "An Act to
14 
Establish a Uniform Retirement System for the Armed Forces of the
15 
Philippines, to Provide for Separation Therefrom, and for Other Purposes";
16 
b) Sections 2(b), 3, 5, 11, 12, 14, 16, 17, 18, 19, 20, and 22 of Republic Act
17 
No. 5976, otherwise known as the "Coast Survey Officers Retirement and
18 
Separation Act of 1969";
19 
c) Sections 5, 17, and 26 of Presidential Decree No. 1638, entitled
20 
"Establishing a New System of Retirement and Separation for Military
21 
Personnel of the Armed Forces of the Philippines and for Other Purposes,"
22 
as amended by Presidential Decree No. 1650;
23 
d) Presidential Decree No. 361, entitled "Providing for an Armed Forces
24 
Retirement and Separation Benefits System," as amended by Presidential
25 
Decree No. 1656 and Presidential Decree No. 1909;
26 
e) Section 39 of Republic Act No. 6975, otherwise known as the "Department
27 
of the Interior and Local Government Act of 1990";
28 
f) Section 3 of Republic Act No. 8291, as amended, otherwise known as "The
29 
Government Service Insurance System Act of 1997";
30 
g) Sections 4 and 5 of Republic Act No. 9040, otherwise known as "The AFP
31 
Tax Exemption for Pay and Allowances Act of 2001";
32 
h) Sections 17 and 18 of Republic Act No. 9993, otherwise known as the
17


1 
"Philippines Coast Guard Law of 2009";
2 
i) Sections 2 and 24 of Republic Act No. 10575, otherwise known as "The
3 
Bureau of Corrections Act of 2013"; and
4 
j) Section 8 of Republic Act No. 11709, as amended, entitled "An Act
5 
Strengthening Professionalism and Promoting the Continuity of Policies and
6 
Modernization Initiatives in the Armed Forces of the Philippines, by
7 
Prescribing Fixed Terms for Key Officers Thereof, Increasing the Mandatory
8 
Retirement Age of Generals/Flag Officers, Providing for a More Effective
9 
Attrition System, and Providing Funds Therefor."
10 
All other laws, rules and regulations, and other issuances or parts thereof,
11 
which are inconsistent with the provisions of this Act, are hereby repealed, amended,
12 
or modified accordingly.
13 
Sec. 48. Elfectivity. -This Act shall take effect after fifteen (15) days following
14 
the completion of its publication in the Official Gazette or in a newspaper of general
15 
circulation.
16 
Approved,
17
18