EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
S. No.
755
^tOUiCf of t|)r sS>r:rttarp
*19 
JUL 24 P4 38
RECEI.m j  b::
Introduced by Senator Ralph G. Recto
AN ACT
STRENGTHENING THE M ILITARY AND UNIFORMED PERSONNEL PENSION 
SYSTEM, 
CREATING 
THE 
M ILITARY 
AND 
UNIFORMED 
PERSONNEL 
INSURANCE FUND, AMENDING SECTIONS 3 AND 24 OF REPUBLIC ACT 
NUMBER 8291, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Uniformed services are vested with the Aegean tasks of upholding Philippine 
sovereignty and territorial integrity, protecting lives and properties, and maintaining 
peace, order, and safety. To perform their respective mandates, uniformed services 
engage in the active recruitment of their respective manpower complement. Such 
recruitment of military men, police officers, firefighters, jail custodians, and 
coastguardsmen, will invariably result not only in increased operational cost today, 
but also in higher pension payments in the future.
The current system of financing the pension requirements of military and 
uniformed personnel retirees, however, is unsustainable, if not fiscally irresponsible. 
The pension system is entirely dependent on the funds appropriated for pension 
requirements in the annual general appropriations. Apart from the resulting delays in 
the payment of pension claims, the government is also burdened by the need to 
appropriate funds for a ballooning pension requirement without a viable fund source. 
For 2017, the government has obligated P75.17 billion, or 2.27% of total 
obligations1, for military and uniformed personnel pension -  an amount equivalent to
Department of Budget and Management (2018). Budget o f Experxlitures and Sources o f Financing FY 2019. Manila: Department of 
Budget and Management


230.69% of the amount obligated for the same purpose just a decade ago2. This 
figure is almost equal to the P79.58 billion obligated for military and uniformed 
personnel base pay for the same year. Without ample intervention, funding 
requirements for pensioners shall eclipse the operational requirements of all active 
uniformed services in the country in a few years.
This bill seeks to arrest this impending fiscal disaster by establishing a 
government-guaranteed insurance fund to cover the insurance needs of new 
entrants to the uniformed services of the government. This fund shall be managed 
by the Government Service Insurance System (GSIS) and shall be supported by 
agency contributions equivalent to 21% of the total monthly base pay of their 
respective uniformed personnel. Proceeds from investing the fund shall then be used 
to pay for the separation or retirement benefits of qualified uniformed personnel 
member. This bill also ensures that existing pensioners and uniformed personnel in 
active service prior to its approval shall enjoy the prevailing retirement benefits at 
the time of their initial appointment, recruitment, or admission to the uniformed 
services.
Through the creation of the Military and Uniformed Personnel (MUP) 
Insurance Fund, it is hoped that a viable and sustainable funding source for pension 
requirements shall be secured, and a responsible management of scant government 
resources shall be realized.
In view of the foregoing, the swift passage of this measure is earnestly
sought.
/mdg 1
7VLPH G
O
1 Department of Budget and Management (2008). Budget o f Expenditures and Sources o f Financing F Y 2009. Manila: Department of 
Budget and Management


EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
t:,r 
o( t()f £»r :rrtari>
S. No.
SENATE
755
*19 JUL24 P 4 OS
. RECEL.
Introduced by Senator Ralph G. Recto
AN ACT
STRENGTHENING THE M ILITARY AND UNIFORMED PERSONNEL PENSION 
SYSTEM, 
CREATING 
THE 
M ILITARY 
AND 
UNIFORMED 
PERSONNEL 
INSURANCE FUND, AMENDING SECTIONS 3 AND 24 OF REPUBLIC ACT 
NUMBER 8291, AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House o f Representatives o f the Philippines in 
Congress assembled:
1 
Section 1. Short Title. -  This Act shall be known as the "Military and
2 
Uniformed Personnel Insurance Fund A c t"
3 
Sec. 2. Declaration o f Policy and Objectives. -  The State recognizes the
4 
invaluable contribution of the uniformed services in providing an environment
5 
conducive to nation-building and economic development. The State likewise
6 
recognizes the role of uniformed personnel who faithfully carry out their mandate to
7 
uphold Philippine sovereignty and territorial integrity; to protect lives and properties;
8 
and to maintain peace, order, and safety -  often at great personal risk and peril. To
9 
recompense such dedicated performance of duty, it is hereby declared the policy of
10 
the State to provide immediate and adequate care, benefits, and other forms of
11 
assistance to veterans of the uniformed services, as well as to their surviving
12 
spouses and orphans. Towards this end, the State shall develop a sound, viable, and
13 
tax-exempt military and uniformed personnel insurance and pension fund that caters
14 
to the needs of the uniformed personnel of the National Government, and motivates
15 
them to faithfully abide by their commitments to the country and its people.


1 
Sec. 3. Definition o f Terms. -  For the purposes of this Act:
2 
(a) Military and Uniformed Personnel (MUP) Insurance Fund shall refer to the
3 
special insurance fund for the new entrants to the uniformed services of the National
4 
Government created under Section 4 of this Act;
5 
(b) Base Pay shall refer to the primary cash compensation for work
6 
performed by uniformed personnel of the uniformed services, excluding any other
7 
pay, allowances, benefits or incentives;
8 
(c) Government Service Insurance System (GSIS) shall 
refer to the
9 
Government Service Insurance System created by Commonwealth Act No. 186, as
10 
amended;
11 
(d) New Entrants shall refer to newly-appointed, -recruited or -admitted
12 
uniformed personnel of the uniformed services after the effectivity of this Act;
13 
(e) Uniformed Personnel shall refer to the commissioned officers and enlisted
14 
personnel of the uniformed services; and,
15 
(f) Uniformed Services shall refer to the Armed Forces of the Philippines
16 
(AFP), Philippine National Police (PNP), Bureau of Fire Protection (BFP), Bureau of
17 
Jail 
Management and Penology (BJMP), 
Philippine Coast Guard (PCG) and
18 
commissioned corps of the National Mapping and Resource Information Authority
19 
(NAMRIA).
20 
Sec. 4. Military and Uniformed Personnel Insurance Fund. -  To carry out the
21 
purposes of this Act, the Military and Uniformed Personnel Insurance Fund is hereby
22 
created, herein referred to as the MUP Insurance Fund, as a special insurance fund
23 
for the new entrants to the uniformed services who received their initial
24 
appointments after the effectivity of this Act.
25 
The GSIS shall be responsible for the administration of the MUP Insurance
26 
Fund and the implementation of the provisions of this Act: Provided, That the MUP
27 
Insurance Fund shall be administered and reported separately from the GSIS Social
28 
Insurance Fund provided under Section 34 of Republic Act No. 8291, otherwise
29 
known as " The Government Service Insurance System Act o f1997!’
30 
The MUP Insurance Fund shall not be used for purposes other than those
31 
provided for under this Act. No portion of the MUP Insurance Fund or income thereof
32 
shall accrue to the General Fund of the national government and its political


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subdivisions, instrumentalities and other agencies including government-owned and 
controlled corporations except as may be allowed under this Act.
Sec. 5. Coverage. -  Upon recruitment, appointment or admission, coverage in 
the MUP Insurance Fund shall be mandatory for all new entrants to the uniformed 
services.
Sec. 6. Section 3 of Republic Act No. 8291, otherwise known as "The 
Government Sen/ice Insurance System Act of 1997," is hereby amended to read as 
follows:
"Section 3. Compulsory Membership. — Membership in the GSIS 
shall be compulsory for all employees receiving compensation AND
FOR NEW ENTRANTS TO THE UNIFORMED SERVICES COVERED 
BY THE MUP INSURANCE FUND, who have not reached the 
compulsory retirement age, irrespective of employment status, except
contractuals who have no 
employer and employee relationship with the agencies they serve."
Sec. 7. Section 24 of Republic Act No. 8291, otherwise known as "The 
Government Service Insurance System Act of 1997," is hereby amended to read as 
follows:
"Section 24. Compulsory Life Insurance. — All employees
the-PIiitippinc National Police (PNP)] AND NEW ENTRANTS TO THE 
UNIFORMED SERVICES COVERED BY THE MUP INSURANCE 
FUND shall, under such terms and conditions as may be promulgated 
by the GSIS, be compulsorily covered with life insurance, which shall 
automatically take effect as follows:
"X. X. X."
Sec. 8. 
MUP Insurance Fund Generation. -  The government agency 
concerned shall contribute to the MUP Insurance Fund an amount equivalent to 
twenty-one percent (21%) of the monthly base pay of their uniformed personnel 
appointed after the effectivity of this Act.


1 
The government agency concerned shall include in its annual appropriation
2 
such sums as may be necessary to cover the required contribution provided for in
3 
this Act. The manner of collection and remittance of contributions to the MUP
4 
Insurance Fund shall be in accordance with the relevant provisions of Republic Act
5 
No. 8291, otherwise known as '' The Government Service Insurance System Act o f
6 
1997r
1 
Sec. 9. MUP Insurance Fund Investments. -  The portions of the MUP
8 
Insurance Fund which are not needed to meet any current obligation may be
9 
invested in accordance with Section 36 of Republic Act No. 8291, otherwise known
10 
as " The Government Service Insurance System Act o f 1997."
11 
Sec. 10. Retirement, Separation and Other Benefits. 
-  The provision of
12 
retirement, separation, and other benefits chargeable against the MUP Insurance
13 
Fund, including eligibility requirements, shall be governed by the relevant provisions
14 
of Republic Act No. 8291, otherwise known as " The Government Service Insurance
15 
System Act o f 1997."
16 
Sec. 11. Grant o f Additional Retirement and Separation Benefits. -  GSIS may,
17 
upon determination of actuarial soundness, provide better pension benefits to
18 
qualified military and uniformed personnel retirees covered by the MUP Insurance
19 
Fund.
20 
Sec. 12. Exemptions from Tax, Legal Process and Lien. -  Any provision of the
21 
law to the contrary notwithstanding, all contributions for the MUP Insurance Fund
22 
and all accruals thereto and income or investment earnings therefrom shall be
23 
exempt from any tax, assessment, fee, charge, or customs or import duty in
24 
accordance with Section 39 of Republic Act No. 8291, otherwise known as ” The
25 
Government Service Insurance System Act o f 1997."
26 
Sec. 13. Government Guarantee. -  The government of the Republic of the
27 
Philippines hereby guarantees the fulfillment of the obligations of the GSIS to
28 
military and uniformed personnel members covered by the MUP Insurance Fund as
29 
and when they fall due.
30 
Sec. 14. Cost o f MUP Insurance Fund Administration. -  The MUP Insurance
31 
Fund shall bear the costs of its administration and development, in such amounts
32 
and for limits as the GSIS Board of Trustees may deem appropriate, but not


1 
exceeding ten percent (10%) of the annual revenues from all sources: Provided,
2 
T hat^e President of the Philippines may, on the basis of actuarial and management
3 
studies, increase the allotment for the administrative and operational expenses for
4 
the MUP Insurance Fund.
5 
Sec. 15. Audit. -  The audit of the MUP Insurance Fund shall be conducted in
6 
accordance with Section 22 of Republic Act No. 8291, otherwise known as " The
7 
Government Service Insurance System Act o f 1997."
8 
Sec. 16. Pension Benefits for Pensioners and Active Uniformed Personnel Prior
9 
to the Effectivity o f this A ct -  Existing pensioners and uniformed personnel in active
10 
duty prior to the effectivity of this Act shall enjoy the retirement benefits provided
11 
under Presidential Decree No. 1638 as amended, Republic Act No. 6975 as amended
12 
by Republic Act No. 8551, Republic Act No. 9993, and other applicable laws.
13 
Sec. 17. Appropriations. -  The amount necessary for the implementation of
14 
the provisions of this Act shall be included in the annual General Appropriations Act
15 
following its enactment into law.
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Sec. 18. Implementing Rules and Regulations. -  Within ninety (90) days from
17 
effectivity of this Act, the GSIS and the Department of Budget and Management
18 
(DBM) shall, in coordination with the Department of Environment and Natural
19 
Resources (DENR), the Department of the Interior and Local Government (DILG),
20 
the Department of National Defense (DND), and the Department of Transportation
21 
(DOTr), and after consultation with directly affected stakeholders, promulgate the
22 
rules and regulations to effectively implement the provisions of this Act.
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Sec. 19. Separabiiity Clause. -  If any provision, section or part of this Act shall
24 
be declared unconstitutional or invalid, such judgment shall not affect, invalidate or
25 
im pair any other provisions, sections or parts hereof.
26 
Sec. 20. Repealing Ciause. -  All laws, decrees, orders, rules and regulations
27 
which 
are inconsistent with the provisions of this Act are hereby repealed or
28 
modified accordingly.
29 
Sec. 21. Effectivity. -  This Act shall take effect fifteen (15) days following its
30 
publication in at least two (2) newspapers of general circulation or in the Official
31 
Gazette.
Approved,