EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S.B. No. 
1042
RECEIVED
yrp 1 1 2i
BILLS
INDEX
Introduced by SENATOR IMEE R. MARCOS
AN ACT
REFORMING THE MILITARY AND UNIFORMED PERSONNEL RETIREMENT 
AND PENSION, AMENDING PRESIDENTIAL DECREE NOS. 3 6 1 ,1 63 8 ,1 6 5 6 ,
REPUBLIC ACT NOS. 8551 AND 9993,
AND FOR OTHER PURPOSES
EXPLANATORY NOTE
In declarations made by the Malacanang as early as February of this year, 
President Rodrigo Roa Duterte signified his intent to certify as urgent bills reforming 
the country's pension system for military and uniformed personnel (MUP).
Under the present system, the pension requirements of the MUP retirees, solely 
derived from the General Appropriations Act of the National Government, have 
become onerous and unaffordable. Pension benefits of uniformed personnel increase 
alongside the salary hikes of those in active service, even as retired uniformed 
personnel enjoy indexation of benefits. Hence, it has become apparent that the 
government cannot sustain such pension system, with no additional sources of 
financing besides the National Budget.
Last 2017, the government set aside PhP 102.44 billion, or 4.1 percent of its 
total new appropriations, for the MUP pension fund, equivalent to 321 percent of the 
amount appropriated for the same purpose just a decade ago. These ballooning 
amounts demand the establishment of a sustainable insurance fund for the MUP 
retirees.


This, this bill seeks to create an MUP Fund to be supervised by the Government 
Service Insurance System (GSIS), its funds to be separate and distinct from other 
funds. It shall cover new entrants to the service, while, the existing pension system 
shall apply to those either already in active service or are among existing pensioners. 
An additional feature of this bill is the option given to early retirees to withdraw a 
minimal portion of their pension to be used for various legitimate purposes, provisions 
on post-retirement preparation, preferential hiring of retirees in government agencies, 
and a more comprehensive medical and health care for the MUP retirees.
Hence, the passage of this bill is earnestly sought.
IMEE R. MARCOS


EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S.B. No. 
1042
RECEIVED 
11 z019
TIME
INDEX
Introduced by SENATOR IMEE R. MARCOS
AN ACT
REFORMING THE MILITARY AND UNIFORMED PERSONNEL RETIREMENT 
AND PENSION, AMENDING PRESIDENTIAL DECREE NOS. 361, 1638, 1656,
REPUBLIC ACT NOS. 8551 AND 9993,
AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House o f Representatives o f the Philippines in 
Congress assembled.
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Section 1. Short Title. - This law shall be known as the "Military and Uniformed
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Personnel Retirement and Pension Reform Act of 2019."
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Section 2. Declaration o f State Policy. - The State duly recognizes the vital
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role of the uniformed services in ensuring security, promoting peace and order,
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ensuring public safety and further strengthening local government capability aimed
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towards the effective delivery of basic services to the citizenry. The State also
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recognizes the extraordinary hazards, risks, perils and dangers that the uniformed
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personnel services encounter in the performance of their duties.
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In an effort to compensate in some small measure the soldier's invaluable
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service, it shall be the State's prime concern to provide all veterans of uniformed
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services, as well as their surviving spouses and orphans, adequate remuneration and
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benefits, including retirement benefits and pensions.
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It shall also be the concern of the State to modernize the military and uniformed
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services retirement benefits and pension system to provide economic security for its
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retirees and their families efficiently and transparently.


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Section 3. D efinition o f Terms. -
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(A) Base Pay -- shall refer to the primary cash compensation for work performed
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by uniformed personnel of the uniformed services, excluding any other pay,
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allowances, benefits or incentives;
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(B) Military and Uniformed Personnel (MUP) Insurance Fund -- shall refer to the
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special insurance fund for the new entrants to the uniformed services of the National
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Government created under Section 4 of this Act;
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(C) New Entrants -- shall refer to the newly-appointed, -recruited or re-admitted
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uniformed personnel of the uniformed services after the effectivity of this Act;
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(D) Existing Retirees -  shall refer to the retired uniformed personnel who are
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currently receiving or entitled to receive retirement benefits and pension under
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existing laws applicable to the uniformed services at the time of effectivity of this Act;
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(E) Future Retirees ~  shall refer to the uniformed personnel active at the time
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of the effectivity of this Act, and to new entrants, all of whom, at the time of their
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actual retirement from the uniformed, services, are eligible to receive retirement
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benefits and pension under existing laws applicable to the uniformed services;
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(F) Uniformed Personnel -  shall refer to the commissioned officers and
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personnel of the uniformed service; and
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(G) Uniformed Services -- shall refer to the Armed Forces of the Philippines
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(AFP), Philippine National Police (PNP), Bureau of Fire Protection (BFP), Bureau of Jail
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Management and Penology (BJMP), Bureau of Corrections (BuCor), Philippine Coast
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Guard (PCG) and commissioned corps of the National Mapping and Resource
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Information Authority (NAMRIA).
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Section 4. 
Coverage. - Upon recruitment, appointment or admission,
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coverage in the MUP Insurance Fund shall be mandatory for all new entrants to the
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uniformed services.
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Section 5. Education, Training and Financial Literacy Program. - The
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Uniformed Services shall provide educational and training opportunities, whether
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graduate, diploma or short-term, to enhance both necessary skillsets for service, as
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well as new career possibilities after retirement.


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In the appraisal for promotions, attendance to these courses shall be 
considered in addition to such meritorious services as may have been rendered by the 
personnel.
Section 6. Standardizing the Uniformed Services M onthly Retirem ent
Pay. - New entrants and those in the active service of the uniformed services, upon 
their retirement, shall be entitled to receive a monthly retirement pay equivalent to 
fifty percent (50%) of the base pay and longevity pay of the retired grade in case of 
twenty (20) years of active service, increasing by two and one-half percent (2.5%) for 
every year of active service rendered beyond twenty (20) years to a maximum of 
ninety percent (90%) for thirty-six (36) years of active service and over.
Provided that, the uniformed personnel shall have the option to receive in 
advance and in lump sum his retirement pay for the first three (3) years, which shall 
be made within six (6) months from effectivity date of retirement and/or completion.
Section 7. Early Availm ent o f Retirem ent Benefits. - Upon completion of 
ten (10) years satisfactory service, the uniformed personnel may withdraw thirty 
percent (30%) of his/her lump sum optional retirement benefit. The advanced amount 
shall be invested only for the following purposes: housing, educational expenses, and 
purchase of low-risk government securities.
Upon completion of twenty (20) years satisfactory service, another thirty 
percent (30%) of his/her lump sum compulsory retirement benefit, to be used as 
desired.
Section. 8. Rationalized Adjustm ent of Retirem ent Benefits and 
Pension. - The retirement benefits and pension of all new entrants shall not be 
subjected to automatic adjustments based on the prevailing scale of the base pay of 
active uniformed personnel. Provided, however. That future and existing retirees shall 
continue to receive retirement benefits and pension and their corresponding 
adjustments:


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Provided, That the existing and future retirees of the Philippine Coast Guard 
shall likewise be subject to adjustments based on the prevailing scale of the base pay 
of the PCG uniformed personnel in the active service, the funding of which shall be 
sourced from the annual General appropriations Act (GAA).
Provided, further. That existing uniformed personnel of NAMRIA at the date of 
effectivity of this Act shall also be covered thereby, the funding of which shall be 
sourced from the annual GAA.
Section 9. 
Receipt o f Retirem ent 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 
receive their lump sum benefit equivalent to 18 months pay within three (3) months 
of their actual retirement.
Section 10. D isability Pension. - All uniformed personnel who are disabled 
in line of duty shall be eligible to receive a monthly pension, the rates of which shall 
be determined by the respective department concerned.
Section. 11. Creation o f M ilitary 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 MUP Insurance Fund, as 
special insurance fund for the new entrants to the uniformed services who received 
their initial appointments after the effectivity of this Act.
The Government Service Insurance System (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 Insurance Fund provided under Section 34 of RA 8291, 
otherwise known as "the GSIS Act of 1997".


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Section. 12. MUP Insurance Fund G eneration. - The government agency 
concerned shall contribute to the MUP Insurance Fund an amount equivalent to 9% 
of the monthly base pay of their uniformed personnel appointed after the effectivity 
of this Act, and for the National Government a corresponding share of 12%.
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 
Act. The manner of collection and remittance of contributions to the MUP Insurance 
fund shall be in accordance with the relevant provisions of RA 8291, otherwise known 
as "The Government Service Insurance System act of 1997".
Section 13. Cost o f MUP Insurance Fund Adm inistration. - 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 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 administrative and operational cost.
Section 14. Exemptions from  Tax, Legal Process and Lien. - All laws to 
the contrary notwithstanding, all contributions to the MUP insurance Fund and all 
accruals thereto and income or investment earnings therefrom shall be exempt from 
any tax, assessment, fee, charge, or custom or import duty in accordance with 
Section 39 of RA 8291, otherwise known as "The Government Service Insurance 
System Act of 1997".
Section 15. Retirem ent Guidance. - The Uniformed Services shall establish 
retiree assistance centers to render services such as providing labor market 
information and civilian workplace requirements to retiring and exiting members, 
conducting outreach efforts to potential employers and establishing linkages with 
national and local chambers of commerce, undertaking, in conjunction with employers, 
conducting job bridging and preparation/training for post-retirement employment.


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Section 16. Preference in Em ploym ent. - The government, having invested 
in the training and education of the members, shall prioritize said personnel in hiring 
for 
employment 
in 
government-owned 
or 
controlled 
corporations, 
national 
government agencies/offices, and LCD's where his/her qualifications are appropriate.
Section 17. M edical and Health Care. -  In coordination with the Department 
of Health (DOH), the Uniformed Services shall continue to provide medical and health 
care services to their personnel who have rendered twenty (20) years satisfactory 
service and have retired optionally shall be given medical and health care services 
until they are fifty-six (56) years old. 
The early retirees may choose to be admitted 
into a public hospital or health facility of their choice.
Section 18. A uto m atic review . - The retirement benefits and pension, 
including the compulsory retirement age, 
of the new entrants shall be reviewed 
commencing two (2) years after the year of retirement of the first new entrant retirees 
and every two (2) years thereafter by the Department of National Defense (DND), 
Department of the Interior and Local Government (DILG), 
Department of 
Transportation (DOTr), Department of Justice (DOJ), Department of Budget and 
Management (DBM), Department of Finance (DOF) and the GSIS for the purpose of 
recommending to the President, for his approval, appropriate adjustments thereto.
Section 19. Im p le m e n tin g  Rules and R egulations. - Within ninety (90) 
days from the effectivity of this Act, the GSIS and the Department of Budget and 
Management (DBM), shall, in coordination with the Department of National Defense 
(DND), Department of the Interior and Local Government (DILG), Department of 
Transportation (DOTr) and Department of Justice (DOJ) and after consultation with 
affected stakeholders, promulgate the rules and regulations to effectively promulgate 
the provisions of this Act.
Section 20. Repealing Clause. -  Presidential Decree Nos. 361, 1638, 1656, 
Republic Act Nos. 8551, 9993, and all laws, decrees, executive orders, administrative


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orders or parts thereof inconsistent with the provisions of this Act are hereby repealed, 
amended or modified accordingly.
Section 21. Separability Clause. - If any provision of this Act is held invalid 
or unconstitutional, other provisions not affected thereby shall continue to be in full 
force and effect.
Section 22. E ffectivity Clause. - This Act shall take effect fifteen (15) days 
following its complete publication in the Official Gazette or in at least two (2) 
newspaper of general circulation.
Approved,