Senate Committee Hearing on MUP Concerns

Economy

Good morning, everyone.

As a refresher, allow me to briefly recount where we left off after the Joint Committee Hearing that we conducted last February of 2021, pertaining to the proposed measures that seek to address the pressing concerns from the ballooning pension requirements of our Military and Uniformed Personnel (MUP).

Before the suspension of the said hearing, the Committee had requested the following:

1. For various MUPs to submit to the Government Service Insurance System (GSIS) the necessary data with respect to the new entrants, so the latter will be able to update its actuarial study dated 05 January 2021; and

2. For the agencies to submit complete data on the real properties to aid the Bureau of Internal Revenue (BIR) in computing the total value of assets that may be considered in establishing the seed fund.

This Committee has been informed that, to date, the GSIS is yet to update its actuarial study due to either incomplete or delayed submission of some agencies. We can skip this for now as we were told the aggregate amount involved is not substantial enough to contribute to the reduction of subsidies coming from the GAA. Not to mention that the incomplete submission of data has already delayed the crafting of the committee report.


Further, during the Lenten break, the Committee received a legal opinion from the Department of Justice (DOJ) on whether the termination of indexation and other reforms being introduced by the pending Senate bills can be applied to existing pensioners as well as those in active service or must it be limited to the new entrants. The Committee will request the DOJ to further elaborate on this matter, considering the differing opinions on the coverage of contributions.

Another concern that we need to resolve in today’s hearing is the role of the GSIS should we create an MUP Insurance Fund. Should they be merely the investment manager or the administrator of the entire pension system?

Moving forward, I wish to spread into the record that Secretary of National Defense Delfin Lorenzana had personally asked this representation to have a separate legislation that will deal solely with retirement, fixed term for senior officers, attrition, and other officer grade distribution for the AFP.

With the permission of my colleagues, the Committee can actually come up with two separate committee reports – one on retirement, the other on the MUP pension fund. Some of the amendments of the retirement laws were earlier deliberated by the Sub-Committee on National Defense, as reflected under Senator Gordon’s Senate Bill No. 1785, before the Senate resolved to consolidate all the pending bills related to pension and retirement systems of the AFP personnel. And rightly so, since the proposal to amend the retirement law is an important component of the MUP pension system.

Having said all that, we hope to have a productive discussion in today’s public hearing so your committee can henceforth draft a committee report to be presented for deliberations in plenary.

Let us now resume by acknowledging the presence of our resource persons who are tireless and more than patient in coming up with the right formula to address the pressing problem at hand, which is like a ticking bomb. So before it becomes even more problematic and uncontrollable, let’s do our job this morning.

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