Tf
TWENTIETH CONGRESS OF THE ] 
REPUBLIC OF THE PHILIPPINES ] 
First Regular Session 
]
25 JUL 15 PI :52
SENATE
RliCttVhD SV.
S.B. No.
636
Introduced by SEN. WIN GATCHALIAN
AN ACT
PROVIDING A NEW SEPARATION, RETIREMENT, AND PENSION SYSTEM 
FOR THE MILITARY AND THE UNIFORMED PERSONNEL, AND 
APPROPRIATING FUNDS THEREFOR
EXPLANATORY NOTE
Absent any reform, the existing military and uniformed personnel (MUP) 
retirement scheme continues to contribute to the ballooning government budget deficit 
as the latest salary adjustment of active MUP translates to a corresponding increase 
in the pension that retired MUPs receive. Being non-contributory, the MUP pension 
and any increases thereto is drawn solely from the national budget through the 
General Appropriations Act.
In a 2020 actuarial study conducted by the Government Service Insurance 
System (GSIS) on the financial impact of the existing MUP retirement scheme, the 
total funding requirement of the current system was estimated at PhP 9.6 trillion. If 
the current system prevails, the GSIS projects that around PhP 850 billion may need 
to be allocated to MUP pensions annually for the next 20 years.1 Based on a September 
2021 presentation of the GSIS assuming a lower percentage of salary increase and 
including new entrants, the adjusted total funding requirement under the existing MUP
1 Department of Finance. Available at https://www.dof.gov.ph/btr-pension-reform-to-ensure-fiscal-stablllty-sustained- 
support- to-military-other-uniformed-personnel/.
1


retirement scheme still remains at over Php. 5.7 trillion or roughly Php 500 billion in 
annual payments if amortized over the course of 20 years.
Accordingly, this bill seeks to avert this impending fiscal disaster by establishing 
a separate separation, retirement, and pension system for the military and uniformed 
personnel. This fund shall be managed by the GSIS, requiring mandatory contributions 
of 7% from military personnel and 9% from other uniformed personnel. Meanwhile, 
the National Government shall contribute 14% and 12% as counterpart share for the 
AFP Trust Fund and the Uniformed Personnel Trust Fund respectively.
This bill will be applied prospectively in order to ensure that existing pensioners 
and MUPs 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 these separate funds, it is hoped that a 
viable and sustainable funding source for pension requirements shall be secured, and 
the responsible management of scant government resources shaMjerealized.
In view of the foregoing, the immediate passage of
rnestly sought.
IN GATCHALIAN


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TWENTIETH CONGRESS OF THE ] 
REPUBLIC OF THE PHILIPPINES ] 
First Regular Session 
]
I . i .
cf i' ' r" ■* ’
25 JUL15 PI :52
SENATE 
S.B. No. 00
RHCEIVQBV,
636
Introduced by SEN. WIN GATCHALIAN
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 the House of Representatives of the Philippines in 
Congress assembled:
TITLE I
GENERAL PROVISIONS
SECTION 1. Declaration of Policy. - The State duly recognizes the vital role of 
the Military and Uniformed Personnel in providing internal and external security, 
promoting peace and order, and ensuring public safety.
The State also recognizes its obligation to ensure a secure, reliable, and 
sustainable pension system for the Military and Uniformed Personnel given the 
distinctive personal risks in their role in nation-building, national defense, and security.
The State shall provide immediate and adequate care, benefits, and other forms 
of assistance to war veterans and veterans of military campaigns, their surviving 
spouses and orphans.
Towards these ends, the State shall establish a fiscal framework that fully 
supports their funding requirements.


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SEC. 2. Coverage. - Unless otherwise specified, this Act shall apply only to new
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entrants of the Military and Uniformed Services.
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SEC. 3. Definition of Terms. -
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a) New Entrants are Military or Uniformed Personnel, as referred under this
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Act, who entered or re-entered the Military or Uniformed Sen/ices after the
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effectivity of this Act;
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b) Military Personnel refers to employees of the government who wear
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uniforms, with ranks, may be armed or unarmed, primarily involved in
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national defense, enforcement of laws, and in the maintenance of peace,
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order, and security and who belong to the Armed Forces of the Philippines
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(AFP).
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c) Uniformed Personnel refers to employees of the government who wear
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uniforms, with ranks, may be armed or unarmed, primarily involved in the
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enforcement of laws, and in the maintenance of peace, order, and security
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and who belong to any of the following services: Philippine National Police
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(PNP), Philippine Coast Guard (PCG), Bureau of Fire Protection (BFP),
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Bureau of Jail Management and Penology (BJMP), Bureau of Corrections
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(BuCor), and the Hydrography Branch of the National Mapping and
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Resource Information Authority (NAMRIA);
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d) Pension refers to the sum of money representing the monthly retirement
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pay or the monthly life annuity of a Military or Uniformed Personnel;
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e) Survivors refer to the following:
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1) Surviving spouse of the deceased Military or Uniformed Personnel who
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married the deceased prior to the latter's retirement or separation and
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not legally separated by judicial decree from the deceased issued on
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grounds not attributable to the surviving spouse: Provided, That
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entitlement to benefits shall terminate when the surviving spouse
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remarries, cohabits, engages in a common law relationship, commits any
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crime of violence or abuse against the children of the Military or
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Uniformed Personnel, is convicted of any crime which carries the penalty
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of imprisonment of more than six (6) years and one (1) day, loss of
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Philippine citizenship, or dies;
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2) Surviving children refer to:
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i. Children born within a marriage contracted prior to the retirement
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or separation from the active duty;
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ii. Adopted and illegitimate children by the deceased while in active
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duty; and
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iii. Children who are eighteen (18) years old and above but suffering
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from mental or physical incapacity, or any disability that renders
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them total dependent on the deceased.
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Provided, That entitlement to benefits shall terminate when the surviving
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children attain eighteen (18) years of age or get married, except for
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surviving children who were duly medically certified by government
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medical practitioners, to be incapable of employment by reason of their
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mental or physical incapacity;
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3) In the absence of surviving spouse and surviving children as mentioned
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in paragraphs (1) and (2) above, survivors shall refer to the surviving
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parent or parents, the surviving unmarried brothers and sisters who are
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below eighteen (18) years of age and without parental obligation,
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surviving brothers and sisters eighteen (18) years old and above who
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are incapable of employment by reason of their mental or physical
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incapacity: Provided, That their entitlement to benefits shall terminate
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upon their death; and
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f) Survivorship Pension refers to the monthly benefit or the monthly life
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annuity of the beneficiaries of a deceased Military or Uniformed Personnel
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who is retired under the provisions of existing laws.
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TITLE II
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MILITARY PERSONNEL SEPARATION, RETIREMENT, AND PENSION SYSTEM
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CHAPTER I
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RETIREMENT
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SEC. 4. Active Duty. - It shall refer to the service as defined under Republic
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Act No. 11709, as amended by Republic Act No. 11939, and its implementing rules
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and regulations.


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SEC. 5. Compulsory Retirement. Military Personnel shall be compulsorily retired 
from service in accordance with Republic Act No. 11709, as amended by Republic Act 
No. 11939, and its implementing rules and regulations.
Military Personnel killed-in-action or wounded-in-action resulting in total 
permanent disability as duly certified by the appropriate medical certification process, 
shall be deemed compulsorily retired for purposes of computing retirement benefits.
SEC. 6. Optional Retirement - Military Personnel may voluntarily retire upon 
accumulation of at least twenty (20) years of satisfactory active duty, subject to the 
approval of the appropriate authority.
CHAPTER II 
BENEFITS
SEC. 7. Retirement Grade and Pay. - The monthly retirement pay shall be fifty 
percent (50%) of the monthly base pay and longevity pay of the permanent grade 
last held by the Military Personnel in case of twenty (20) years in active duty, 
increasing by two-point five percent (2.5%) for every year of active duty rendered 
beyond twenty (20) years to a maximum of ninety percent (90%) for thirty-six (36) 
years of active duty.
Upon retirement. Military Personnel shall choose between the following modes 
of payment of retirement benefits:
a) Lump Sum - To receive in advance and in one lump sum, retirement 
benefits equivalent to thirty-six (36) months; and three (3) years thereafter, 
to receive monthly retirement benefits as they accrue; or
b) Direct Pension - To receive monthly retirement benefits as they accrue.
The retirement pay of Military Personnel who is killed-in-action or wounded-in-
action resulting in total permanent disability, as duly certified by the appropriate 
medical certification process, shall be computed at the rate of ninety percent (90%) 
of the monthly base and longevity pay of the retirement grade last held by the 
personnel regardless of years in active duty.


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SEC. 8. Separation Pay. - Military Personnel who separate or resign from the 
service without reaching twenty (20) years of satisfactory active duty shall receive a 
separation pay equivalent to one-month base pay plus longevity pay of the permanent 
grade held at the time of separation for every year of active duty: Provided, That such 
Military Personnel shall have rendered at least nine (9) years of satisfactory active 
duty prior to resignation or separation.
SEC. 9. Survivorship Pension Rates. - The survivorship pension rates of Military 
Personnel shall be governed by existing laws and regulations created therefor.
SEC. 10. Adjustments in Pension. - There shall be no automatic adjustment of 
the pension to the prevailing scale of salary of the active Military Personnel of the 
same rank: Provided, That the President of the Philippines is hereby authorized, 
subject to the recommendation of the Armed Forces of the Philippines Trust Fund 
Committee (AFP Trust Fund Committee) created under this Act, to adjust the 
retirement and survivorship pension by not less than one-point five percent (1.5%) 
thereof, in consideration of fiscal or economic conditions, as certified by the 
Development Budget Coordination Committee.
SEC. 11. Harmonization of Total Permanent Disability Benefits. - Military 
Personnel with total permanent disability as a result of injuries sustained or sickness 
contracted in the performance of duty, duly certified by the appropriate medical 
certification process, shall be compulsorily retired.
Sec. 12. Termination of Benefits. - Retired Military Personnel who lose their 
Filipino citizenship shall be removed from the retired list and forfeit all rights to receive 
the benefits herein provided upon such loss.
CHAPTER III
ARMED FORCES OF THE PHILIPPINES TRUST FUND
SEC. 13. Armed Forces of the Philippines Trust Fund (AFP Trust Fund). - The 
AFP Trust Fund is hereby created for the budgetary support and payment of


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separation, retirement, pension, survivorship, and other benefits granted under this
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Act.
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The AFP Trust Fund is separate and distinct and should not be commingled with
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the Government Service Insurance System (GSIS) funds. The GSIS shall not advance
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funds and grant any form of loans to the AFP Trust Fund Committee from the GSIS
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administered funds.
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SEC 14. Funding Sources. - The AFP Trust Fund shall be funded through the
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following:
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a) Mandatory Contributions. - Military Personnel shall contribute seven percent
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(7%) of their base pay and longevity pay as personal share and the National
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Government shall contribute fourteen percent (14%) as its counterpart
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share: Provided, That the aforementioned rates may be adjusted by the
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Development Budget Coordination Committee, in consultation with the AFP
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Trust Fund Committee, on account of adverse fiscal or economic conditions
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or the fiscal constraints of the National Government;
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b) Additional Sources of Funding. - The AFP Trust Fund may be funded from
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the proceeds of the following:
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1. All residual assets and funds of the AFP Retirement and Separation
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Benefits System (RSBS);
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2. Sale of military reservations, as may be authorized by Congress,
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pursuant to the provisions of existing laws and regulations governing
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sales of government properties, including such immovable and other
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facilities as may be found therein, not otherwise covered by the Bases
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Conversion and Development Authority (BCDA), 
as provided for 
in
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Republic Act No. 7227, otherwise known as the "Bases Conversion and
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Development Act of 1992", as amended;
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3. Lease or joint development of military reservations, as may be
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authorized by the President, pursuant to the provisions of existing laws
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and regulations governing lease or joint development of government
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properties, including such immovable and other facilities as may be
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found therein, not specifically enumerated under Republic Act No. 7227,
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as amended;
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4. Income derived from public-private partnerships entered into by the
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Department of National Defense (DND) or the AFP, as may be authorized
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by the President, pursuant to the provisions of existing laws and
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regulations;
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5. Non-strategic real estate assets of the DND or the AFP as determined by
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the Secretary of National Defense; and
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6. Earnings and dividends from investment made by the GSIS as the fund
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manager.
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SEC. 15. AFP Trust Fund Committee. - To carry out the declared policy of this
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Act, the AFP Trust Fund Committee, hereinafter referred to as the Trust Fund
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Committee, is hereby created. The AFP Trust Fund Committee shall be organized
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within ninety (90) days from the effectivity of this Act. It shall be composed of the
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following members:
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a) Secretary of Finance as Chairperson;
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b) Secretary of National Defense as Co-Chairperson;
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c) Chief of Staff of the AFP;
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d) Secretary of Budget and Management; and
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e) President and General Manager of the GSIS.
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The Bureau of the Treasury shall serve as the Secretariat of the Trust Fund
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Committee and maintain the records and accounts of all investments, receipts,
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disbursements, and other transactions relating to the management, administration,
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and utilization of the AFP Trust Fund: Provided, That these records and accounts are
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maintained in accordance with the existing accounting and auditing laws, rules and
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regulations, and audited by the Commission on Audit.
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SEC. 16. Powers and Functions of the Trust Fund Committee. -The Trust Fund
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Committee shall exercise the following powers and functions:
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a) Formulate policies, guidelines and programs to ensure that the AFP Trust
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Fund is actuarially and financially optimal and sustainable;
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b) Act as Trustee of the AFP Trust Fund and direct how the assets of the AFP
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Trust Fund are managed;
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c) Perform oversight functions over the AFP Trust Fund manager;
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d) Provide the proper mechanisms for consultation and information
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dissemination among members regarding the management, utilization,
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investment, and administration of AFP Trust Fund;
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e) Implement and execute functions related to the disposition of assets
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identified under this Act;
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f) Commission an actuarial evaluation of the fiscal sustainability of the
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separation, retirement and pension scheme, including specific
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recommendations on the rates for contributions and investment options for
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the AFP Trust Fund, as applicable;
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g) Obtain information from any officer or office of local governments and
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agencies and instrumentalities of the National 
Government, as may be
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necessary;
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h) Assess possible risks to the fiscal sustainability of the pension of Military
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Personnel and propose appropriate policy interventions;
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i) Identify, manage, and control risks that the pension of the Military Personnel
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may pose to the National Government's fiscal position;
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j) Inform both Flouses of Congress of such risks through the annual Fiscal Risk
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Statement and propose legislative reforms to address such risks; and
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k) Perform other necessary functions for the effective management of the AFP
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Trust Fund.
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CHAPTER IV
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INVENTORY, ACCOUNTING, AND DISPOSITION OF ASSETS
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SEC. 17. Inventory of Assets. - Within thirty (30) days from the creation of the
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AFP Trust Fund Committee, the Military Service, through the DND, shall submit a
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complete list of assets to the AFP Trust Fund Committee to identify additional sources
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of funding as provided in Section 14(b) of this Act.
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Thereafter, the AFP Trust Fund Committee shall conduct a complete accounting
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and inventory of the assets of the Military Service that may be used to support the
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AFP Trust Fund, including the amount, value, description and nature of such funds,
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properties, assets, records, choses in action, and other rights, claims, or causes of


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action pertaining thereto, and submit a report to the Office of the President, both 
Houses of Congress, and the Commission on Audit (COA).
SSEC. 18. Accounting of Assets. - Within thirty (30) days from the receipt of 
the inventory by the AFP Trust Fund Committee, the COA shall audit the accounting 
and inventory of the assets of the Military Service to determine the completeness of 
the inventory and establish the reasonableness of the asset valuation.
Within one (1) year from the submission of the accounting and inventory of the 
assets of the Military Service, the COA shall submit to the AFP Trust Fund Committee, 
both Houses of Congress and the Office of the President the audit report, including 
the complete list of the assets of the Military Service and their valuation, and the 
empirical basis and the methodologies employed for the valuation.
SEC. 19. Disposition of Assets. - The AFP Trust Fund Committee shall prioritize 
the disposition modes that may generate income from these assets without 
undertaking the sale thereof. The AFP Trust Fund Committee may recommend to the 
President the sale of an asset when there is a notice from the GSIS of an unfunded 
liability and the AFP Trust Fund is no longer sustainable.
The AFP Trust Fund Committee shall publish any disposition of assets in a 
newspaper of general circulation.
TITLE III
UNIFORMED PERSONNEL SEPARATION, RETIREMENT, AND PENSION SYSTEM
CHAPTER I 
RETIREMENT
SEC. 20. Active Duty. - Service rendered as an officer and non-officer, cadet, 
trainee, draftee, probationary ensign or those rendered as a civilian official or 
employee in the Philippine Government.
SEC. 21. Compulsory Retirement - All Uniformed Personnel shall be 
compulsorily retired from service upon reaching the age of fifty-seven (57) including 
those in the active duty before the enactment of this Act.


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Uniformed Personnel killed-in-action or wounded-in-action resulting in total 
permanent disability, as duly certified by the appropriate medical certification process, 
shall be deemed compulsorily retired for purposes of computing retirement benefits.
SEC. 22. Optional Retirement - Uniformed Personnel may voluntarily retire 
upon accumulation of at least twenty (20) years of satisfactory active duty, subject to 
the approval of the appropriate authority.
CHAPTER II 
BENEFITS
SEC. 23. Retirement Grade and Pay. - The monthly retirement pay shall be fifty 
percent (50%) of the monthly base pay and longevity pay of the permanent grade 
last held by the Uniformed Personnel in case of twenty (20) years in active duty, 
increasing by two-point five percent (2.5%) for every year of active duty rendered 
beyond twenty (20) years to a maximum of ninety percent (90%) for thirty-six (36) 
years of active duty and over.
Upon retirement. Uniformed Personnel shall choose between the following 
modes of payment of retirement benefits:
a) Lump Sum - To receive in advance and in one lump sum, retirement 
benefits equivalents thirty-six (36) months; and three (3) years thereafter, 
to receive monthly retirement benefits as they accrue; or
b) Direct Pension - To receive monthly retirement benefits as they accrue.
The retirement pay of Uniformed Personnel who is killed-in-action or wounded-
in-action resulting in total permanent disability, as duly certified by the appropriate 
medical certification process, shall be computed at the rate of ninety percent (90%) 
of the monthly base and longevity pay of the retirement grade of the personnel 
regardless of years in active duty.
SEC. 24. Separation Pay. - Uniformed Personnel who separate or resign from 
the service without reaching twenty (20) years of satisfactory active duty shall receive 
a separation pay equivalent to one-month base pay plus longevity pay of the 
permanent grade held at the time of separation for every year of active duty: Provided,
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That such Uniformed Personnel shall have rendered at least nine (9) years of 
satisfactory active duty prior to resignation or separation.
SEC. 25. Survivorship Pension Rates. - The survivorship pension rates of 
Uniformed Personnel shall be governed by existing laws and regulations created 
therefor.
SEC. 26. Adjustments in Pension. - There shall be no automatic adjustment of 
pension to the prevailing scale of salary of the active Uniformed Personnel of the same 
rank: Provided, That the President of the Philippines is hereby authorized, subject to 
the recommendation of the Uniformed Personnel Trust Fund Committee created under 
this Act, to adjust the retirement and survivorship pension by not less than one-point 
five percent (1.5%) thereof, in consideration of fiscal or economic conditions, as 
certified by the Development Budget Coordination Committee.
SEC. 27. Harmonization of Totai Permanent Disabiiity Benefits. - Uniformed 
Personnel with total permanent disability as a result of injuries sustained or sickness 
contracted in the performance of duty, duly certified by the appropriate medical 
certification process, shall be compulsorily retired.
SEC. 28. Termination of Benefits. - Retired Uniformed Personnel who lose their 
Filipino citizenship shall be removed from the retired list and forfeit all rights to receive 
the benefits herein provided upon such loss.
CHAPTER III
UNIFORMED PERSONNEL TRUST FUND
SEC. 29. Uniformed Personnei Trust Fund. - The Uniformed Personnel Trust 
Fund is hereby created for the budgetary support and payment of separation, 
retirement, pension, survivorship, and other benefits granted under this Act.
The Uniformed Personnel Trust Fund is separate and distinct and should not be 
commingled with the GSIS funds. The GSIS shall not advance funds and grant any
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form of loans to the Uniformed Personnel Trust Fund Committee from the GSIS 
administered funds.
SEC. 30. Funding Source. - The Uniformed Personnel Trust Fund shall be 
funded through the following:
a) Mandatory Contributions. - Uniformed Personnel shall contribute nine 
percent (9%) of their monthly base pay and longevity pay as personal share 
and the National Government shall contribute twelve percent (12%) as its 
counterpart share: Provided, That both the aforementioned rates may be 
adjusted by the Development Budget Coordination Committee, in 
consultation with the Uniformed Personnel Trust Fund Committee, on 
account of adverse fiscal or economic conditions or the fiscal constraints of 
the National Government; and
b) Earnings and dividends from investment made by the GSIS as the fund 
manager.
SEC. 31. Uniformed Personnel Trust Fund Committee. - To carry out the 
declared policy of this Act, the Uniformed Personnel Trust Fund Committee is hereby 
created. The Trust Fund Committee shall be organized within ninety (90) days from 
the effectivity of this Act. It shall be composed of the following members:
a) Secretary of Finance as Chairperson;
b) Chief of the PNP;
c) Chief of the BFP;
d) Chief of the BJMP;
e) Director General of BuCor;
f) Commandant of PCG;
g) Director of the Hydrography Branch of NAMRIA;
h) Secretary of Budget and Management; and
i) President and General Manager of the Government Service Insurance 
System (GSIS).
Provided, That the participation of representatives of the Uniformed Personnel 
in deliberations and decision-making processes of the Trust Fund Committee shall be 
limited to the matters concerning their respective service.
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The Bureau of the Treasury shall serve as the Secretariat of the Trust Fund 
Committee and maintain the records and accounts of all investments, receipts, 
disbursements, and other transactions relating to the management, administration, 
and utilization of the Uniformed Personnel Trust Fund: Provided, That these records 
and accounts are maintained in accordance with the existing accounting and auditing 
laws, rules and regulations, and audited by the COA.
SEC. 32. Powers and Functions of the Trust Fund Committee. - The Uniformed 
Personnel Trust Fund Committee shall exercise the following powers and functions:
a) Formulate policies, guidelines and programs to ensure that the fund is 
actuarially and financially optimal and sustainable;
b) Act as Trustee of the Uniformed Personnel Trust Fund;
c) Perform oversight functions over the fund manager;
d) Provide the proper mechanisms for consultation and information 
dissemination among members regarding the management, utilization, 
investment, and administration of funds;
e) Commission an actuarial evaluation of the fiscal sustainability of the 
separation, retirement and pension scheme, including specific 
recommendations on the rates for contributions and investment options for 
the Uniformed Personnel Trust Fund, as applicable;
f) Obtain information from any officer or office of local governments and 
agencies and instrumentalities of the National Government, as may be 
necessary;
g) Assess possible risks to the fiscal sustainability of the pension of Uniformed 
Personnel and propose appropriate policy interventions;
h) Identify, manage, and control risks that the pension of the Uniformed 
Personnel may pose to the National Government's fiscal position;
i) Inform both Houses of Congress of such risks through the annual Fiscal Risk 
Statement and propose legislative reforms to address such risks; and
j) Perform other necessary functions for the effective management of the 
Uniformed Personnel Trust Fund.
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TITLE IV
2 
MANAGEMENT OF TRUST FUNDS
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SEC. 33. Manager of Trust Funds. - The GSIS is hereby designated as the fund
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manager of AFP and Uniformed Personnel Trust Funds, and shall:
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a) Implement an investment management strategy as directed by the
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Committees;
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b) Monitor market and economic trends and track securities to make informed
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investment decisions that would be beneficial to the continued growth and
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sustainability of the trust funds;
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c) Present and report its portfolio strategy to the Committees;
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d) Design and implement programs that will promote and mobilize earnings,
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savings and additional resources for social security expansion and afford
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individual members appropriate returns on their savings/investments;
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e) Conduct continuing actuarial and statistical studies and valuations to
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determine the financial condition of the trust funds and taking into
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consideration such studies and valuations, recommend to the Committees
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the adjustment of benefits, contributions, interest rates or the allocation of
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the funds to the contingencies covered;
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f) Track financial results of companies in the portfolio and its various metrics,
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including price-to-earnings ratios, inflation-adjusted return, sales, earnings,
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and dividends; and
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g) Perform other acts necessary to fulfill its mandate under this Act, or such
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acts that may be delegated by the Committees.
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SEC. 34. Structure, Staffing Pattern, and Operating Budget - The
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organizational structure and staffing pattern for the management of the trust funds
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within the GSIS and for the creation of the Trust Fund Secretariat within the Bureau
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of the Treasury shall be approved by the Trust Fund Committees within one hundred
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twenty (120) days from the effectivity of this Act, subject to further extensions as may
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be approved by the Trust Fund Committees: Provided, That appointees to various
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positions shall comply with the qualification standards approved by the Civil Service
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Commission: Provided, further, That the GSIS shall be entitled to reasonable annual
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management fees but shall not exceed one percent (1%) of the total assets managed 
in each trust fund charged against the respective Trust Funds.
SEC. 35. Tax Treatment of the AFP and Uniformed Personnel Trust Funds. - 
Notwithstanding any law to the contrary, the trust funds, its assets, revenues, 
including all accruals thereto, and benefits paid, are exempt from all taxes, 
assessments, fees, charges, or duties of all kinds. These exemptions shall continue 
unless expressly and specifically revoked.
Subject to Section 41 of this Act, the trust funds, the properties of the Military 
identified by the AFP Trust Fund Committee to be disposed and sums or monies for 
the payment of the benefits provided under this Act are exempt from attachment, 
garnishment, execution, levy or other processes issued by the courts, quasi-judicial 
agencies or administrative bodies and from all financial obligations of the members, 
including pecuniary accountability arising from or caused or occasioned by the 
members' exercise or performance of official functions or duties, or incurred relative 
to or in connection with the members' position or work except when the monetary 
liability, contractual or otherwise, is in favor of the trust funds.
All other applicable tax exemptions granted to the GSIS shall also apply to the 
trust funds.
SEC. 36. Government Guarantee. - The government of the Republic of the 
Philippines hereby guarantees the fulfillment of the obligations of the trust funds to 
its members when they fall due.
TITLE V
MISCELLANEOUS, PENAL, AND FINAL PROVISIONS
SEC. 37. Administration of Benefits. - The powers and functions of units or 
instrumentalities of agencies that employ Military or Uniformed Personnel and 
administer their separation, retirement and pension system or parts thereof shall 
remain with the existing offices of their respective agencies.
The respective services or mother units shall monitor proof of life or life events 
that will affect the qualification of pensioners and beneficiaries to receive the pension
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or benefit. The computation of pension and benefits accruing to each retiree or 
beneficiary shall be undertaken by the concerned mother unit.
SEC. 38. Adjustments in Salary and Pension Benefits. - Upon the effectivity of 
this Act, there shall be a guaranteed annual adjustment in the base pay of three 
percent (3%) for the next ten (10) years for those in the active duty and pension 
benefits of the retirees.
On the fifth (5th) year, and when the need arises thereafter, there shall be a 
review on the base pay and the rule on automatic indexation by the Development 
Budget Coordination Committee.
SEC. 39. Separation, Retirement and Pension Benefits of the Active Military and 
Uniformed Personnel. - The separation, retirement and pension benefits of Military or 
Uniformed Personnel in active duty prior to the effectivity of this Act shall be governed 
by existing laws and regulations created therefor and shall be funded annually under 
the General Appropriations Act: Provided, That the maximum retirement pay for active 
Military or Uniformed Personnel who will compulsorily retire after the effectivity of this 
Act shall be increased to ninety percent (90%): Provided, further, That the rate of 
ninety percent (90%) shall also apply to those deemed compulsorily retired by reason 
of having been killed-in-action or wounded-in-action after the effectivity of this Act 
resulting in total permanent disability: Provided, finally. That the separation, 
retirement and pension benefits payable to the Uniformed Personnel from the Bureau 
of Corrections who were affected by the implementation of Republic Act No. 10575 or 
the "Bureau of Corrections Act of 2013" and who may or may not have contributed to 
the GSIS, shall also be covered in full by the General Appropriations Act.
SEC. 40. Medical Insurance. - Military or Uniformed Personnel, who enter the 
service after the effectivity of this Act, shall be provided medical insurance upon their 
compulsory retirement.
SEC. 41. Non-encumbrance of Benefits. - The benefits authorized under this 
Act, except as provided herein, shall not be subject to attachment, garnishment, levy, 
execution or any tax whatsoever, and may not be assigned, ceded, or conveyed to
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any third person: Provided, That if a retired or separated Military or Uniformed 
Personnel who is entitled to any benefit under this Act has unsettled money or property 
accountabilities incurred while in the active duty, an amount not exceeding fifty 
percent (50%) of the pension gratuity or other payment due to the Military or 
Uniformed Personnel or their survivors under this Act may be withheld and be applied 
to settle such accountabilities.
SEC. 42. Rule on Interpretation. - Nothing in this Act shall be construed as 
authorizing any downward adjustment of pay, or payment of any differential in 
retirement pay, to Military or Uniformed Personnel who are already retired prior to the 
effectivity of this Act.
SEC. 43. Submission of Report to Congress. - In accordance with the pertinent 
provisions of this Act and its Implementing Rules and Regulations, and International 
Financial Reporting Standards and Principles, the Committees shall submit to both 
Houses of Congress every three (3) years after the effectivity of this Act, the financial 
statements and reports, and all information as may be required, to monitor and assess 
the distribution of retirement benefits and pension, as well as the overall performance 
of Military or Uniformed Trust Funds, which are funded in whole or in part by the 
National Government.
SEC. 44. Pena! Clause. - Any person who participates 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 of such amount 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 licensed 
by the government: Provided, That a conviction or acquittal obtained under this 
section shall not be a bar to the filing of an administrative, civil, or criminal case under 
existing laws.
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SEC. 45. Implementing Rules and Regulations. - Within sixty (60) days from
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the effectivity of this Act, the Secretaries of Finance, National Defense, Interior and
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Local Government, Justice, Transportation, Environment and Natural Resources,
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Budget and Management, and the President and General Manager of the GSIS, in
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consultation with the concerned Military or Uniformed Services, shall promulgate the
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necessary rules and regulations for the effective implementation of this Act: Provided,
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That the non-promulgation of the implementing rules and regulations shall not prevent
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the implementation of this Act upon effectivity.
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Supplemental rules and regulations governing the management and
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administration of the pension system of the Military or Uniformed Personnel may be
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issued within one (1) year from the effectivity of this Act.
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SEC. 46. Separability Clause. - If any provision or part of this Act is declared
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invalid or unconstitutional, the remaining parts or provisions not affected shall remain
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in full force and effect.
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SEC. 47. Repealing Clause. - The pertinent provisions of these laws are hereby
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repealed, amended, or modified accordingly.
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a) Section 11 of Republic Act No. 340, as amended, entitled "An Act to
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Establish a Uniform Retirement System for the Armed Forces of the
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Philippines, to Provide for Separation Therefrom, and for Other Purposes";
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b) Sections 2(b), 3, 5, 11, 12, 14, 16, 17, 18, 19, 20, and 22 of Republic Act
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No. 5976, otherwise known as the "Coast Survey Officers Retirement and
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Separation Act of 1969";
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c) Sections 5, 17, and 26 of Presidential Decree No. 1638, entitled
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"Establishing a New System of Retirement and Separation for Military
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Personnel of the Armed Forces of the Philippines and for Other Purposes,"
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as amended by Presidential Decree No. 1650;
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d) Presidential Decree No. 361, entitled "Providing for an Armed Forces
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Retirement and Separation Benefits System," as amended by Presidential
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Decree No. 1656 and Presidential Decree No. 1909;
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e) Section 39 of Republic Act No. 6975, otherwise known as the "Department
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of the Interior and Local Government Act of 1990";
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f) Section 3 of Republic Act No. 8291, as amended, otherwise known as "The 
Government Service Insurance System Act of 1997";
g) Sections 4 and 5 of Republic Act No. 9040, otherwise known as "The AFP 
Tax Exemption for Pay and Allowances Act of 2001";
h) Sections 17 and 18 of Republic Act No. 9993, otherwise known as the 
"Philippine Coast Guard Law of 2009";
i) Sections 2 and 24 of Republic Act No. 10575, otherwise known as the 
"Bureau of Corrections Act of 2013"; and
j) Section 8 of Republic Act No. 11709, as amended, entitled "An Act 
Strengthening Professionalism and Promoting the Continuity of Policies and 
Modernization Initiatives of the Armed Forces of the Philippines, by 
Prescribing Fixed Terms for Key Officers Thereof, Increasing the Mandatory 
Retirement Age of Generals/Flag Officers, Providing for a More Effective 
Attrition System, and Providing Funds Therefor."
All other laws, rules, and regulations, and other issuances or parts thereof, 
which are inconsistent with the provisions of this Act, are hereby repealed, amended, 
or modified accordingly.
SEC. 48. Effectivity. - This Act shall take effect after fifteen (15) days following 
the completion of its publication in the Official Gazette or in a newspaper of general 
circulation.
Approved,
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