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

Eighteenth Congress
First Regular Session

HOUSE BILL NO. _6823

Introduced by:

Honorable DAVID C. SUAREZ

EXPLANATORY NOTE

This legislative intervention is being proposed in order to give flesh to

President Rodrigo Roa Duterte’s Budget Message for the Fiscal Year
2017, thus:

"The reform on Military and Uniformed Personnel (MUP)
pension shall be pursued in view of the ballooning budget burden
where the total cost of the pensions of retired soldiers will exceed
the compensation of those in the active service. The proposed
law will create a pension fund that is similar to or part of the
Government Service Insurance System, replacing the current
system where the pensions of the military and other uniformed
personnel are appropriated annually by Congress."

The tangible manifestation of the government's profound gratitude
to our MUPs, more than honoring their contributions through superficial
ceremonies, is to utilize all efforts to provide needed assistance, financial
or otherwise, to our indubitably unsung heroes. It is therefore imperative

” RECEIVED
LATE:MAY 26 2021



that we introduce reforms in the pension system of our MUPs to make it
more sustainable.

Through the creation of the Military and Uniformed Personnel
Retirement Fund, we take a step closer to ensuring that a viable and
sustainable funding source for pension requirements shall be secured,
thus, would enable the State to guarantee that the it can and will continue
to provide sufficient benefits and remuneration for our men and women in
uniform.

The immediate passage of this bill is, therefore, earnestly sought.



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

Eighteenth Congress
First Regular Session

HOUSE BILL NO. pees

Introduced by:

Honorable DAVID C. SUAREZ

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 the 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
of 2020."

Title |
Declaration of Policy


Sec. 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.

Title Il
Definition of Terms

Sec. 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 (BUMP), 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 refer to military and uniformed personnel
from the Military and Uniformed Services in the Active Service, and
those who shall enter into the Military and Uniformed Services
before the effectivity of this Act;

d. "Active Service" shall mean Active Service rendered by a Military
or Uniformed Services Personnel as a commissioned officer, non-
commissioned officer, enlisted personnel, cadet, probationary

4


f.

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 shall 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;

. "Total permanent physical disability" shall mean the anatomical loss

or 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;

"Survivors" shall mean:

1. 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
remarriage 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;

2. Surviving legitimate, adopted and illegitimate children of a
deceased Military or Uniformed Services Personnel
conceived, adopted or acknowledged prior to separation or

5


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:

3. 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:

g. "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.

Title Il
Applicability

Sec. 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.

Title IV
Retirement

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


©

a

9°

eo.

a.

b.

c

. Those who attain the age of sixty-five (65); provided, that he/she

has accumulated at least thirty (30) years of satisfactory Active
Service;

. Those who suffer death in line of duty; provided, that he/she has

accumulated at least thirty (30) years of satisfactory Active Service;

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;

Those who are killed in action;

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

f. 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

|. 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.

Sec. 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

Title V
Separation

Sec. 7. Compulsory Separation. - The following Military or

Uniformed Services Personnel shall be compulsorily separated from the
Active Service:

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

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

Sec. 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.

Title VI
Retirement and Separation Benefits

Sec. 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 s 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.

Sec. 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.

Sec. 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.


Sec. 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.

Sec. 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.

Sec. 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;

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

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

10


f. 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.

Sec. 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).

Title VII
Military and Uniformed Personnel Retirement Fund

Sec. 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.

Sec. 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

11


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.

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

a. Mandatory Contributions. - \t shall be mandatory for New Entrants
and Active Members to contribute a percentage of their monthly
compensation as their personal share to the MUPRF, the National
Government shall allocate its share in the contribution sourced from
the annual General Appropriations Act, allocated as follows:

1. 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;

2. 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

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

4. 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.

Sec. 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.

Sec. 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.

Title VII
General Provisions

Sec. 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.

Sec. 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.

Sec. 24. Non-Encumbrance of Benefits. - The benefits authorized
under this Act, except as provided herein, shall not be subject to

23


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.

Sec. 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.

Sec. 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.

Title IX
Miscellaneous Provisions

Sec. 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.

Sec. 28. Rules and Regulations. - Within sixty days (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

14


relevant offices shall formulate and issue the Implementing Rules and
Regulations necessary for the effective implementation hereof.

Sec. 29. 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.

Sec. 30. 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.

Sec. 30. Effectivity Clause. - 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,

15