A BICOLANO House leader has stressed that his proposed fiscal framework for the Military and Uniformed Personnel (MUP) pension will help the government pay bigger benefits to military and police personnel killed or wounded in the line of duty.

Albay Rep. Joey Sarte Salceda, chairman of the House committee on ways and means, said his House Bill (HB) 9271 aims to improve the benefits of those who are killed or wounded among the MUP personnel, “in recognition of their willingness to make the ultimate sacrifice for the country.”

“Right now, we can’t make those compensations, because we don’t have a reserve fund for their pension, and we pay all pensions out of the national budget. Once we get the GSIS (Government Service and Insurance Corporation) to run the military pension, we will be able to create an insurance system for the unique risks they take in the line of duty,” Salceda said.

Under Salceda’s proposal, an MUP Trust Fund will be created out of mandatory contributions from the MUP and the national government.

The GSIS will run the pension fund as administrator. The bill also mandates the GSIS to create an insurance system for uniformed service members.

Reform to move soon

Salceda said the Department of Finance (DOF) has already endorsed his proposal to the House leadership and that Speaker Lord Allan Velasco has consulted him on the matter.

“The House leadership also wants to address longstanding issues in the MUP pension system. The details will be debated, I am sure. But this reform will move under this administration,” Salceda said.

The MUP pension reform was first considered in 2004, during the looming fiscal crisis that the Arroyo administration sought to solve with a series of fiscal and tax reforms.

“This reform will also indirectly help us secure our long-term recovery from the fiscal hole left by COVID-19. The numbers without this reform are catastrophic. Without the reform, funding the pension scheme will become fiscally unsustainable, shrinking the economy by as much as 7.2 percent in the long-run. This is worse than what the economy sustained in the 2004 fiscal crisis and the 2008 global financial crisis,” Salceda added.

Balanced reform needed

Salceda said he does not want the reform to be “all pain.”

“A balanced reform is very critical. So, I am proposing that we strengthen the insurance system for the MUP so that we can give increased insurance benefits. Because the GSIS will be managing the MUP Trust Fund, I also want more loan products made available to them,” Salceda added.

“Of course, we need to come up with new sources. That is also why I think we will consider including reclamation projects as a potential revenue source for the MUP pension,” Salceda concluded.