A bill proposing reforms in the pension system of military and uniformed personnel or MUP, including a guaranteed three percent annual salary increase for MUP within 10 years from the law's passage, was approved on Tuesday's third and final reading by the House of Representatives.

House Bill 8969, or the proposed Military and Uniformed Personnel Pension System Act, was approved by a vote of 272-4-1. It consolidates 15 other measures, which all propose reforms in the MUP pension system.

The bill aims to ensure the sustainability of the pensions and other benefits of MUP by creating a fiscal framework that fully supports its funding requirement.

Speaker Martin Romualdez, the bill's principal author, deemed it a "landmark legislation" that provides a "robust, sustainable, and fair pension system" for the MUP that recognizes their service to the country.

"With this reform, we're not only prioritizing the well-being of our MUP but also ensuring the country's economic stability. It is a testament to our commitment to national security and fiscal responsibility," the House chief said.

Reforming the MUP pension system — which the Department of Finance earlier warned was fiscally unsustainable — is among President Ferdinand Marcos Jr.'s priority legislations.

The proposed law covers the Armed Forces of the Philippines, the Philippine National Police, the Philippine Coast Guard, the Bureau of Fire Protection, the Bureau of Jail Management and Penology, the Bureau of Corrections, and commissioned officers of the Hydrography branch of the National Mapping and Resource Information Authority who were transferred from the Bureau of Coast and Geodetic Survey.

The bill will create two MUP trust funds, one for the Armed Forces of the Philippines and another for other uniformed personnel services. It will form an MUP trust fund committee chaired by the secretary of Finance to administer the funds, while the Government Service Insurance System will serve as the manager of the trust funds.

New MUP entrants will be mandated to make monthly contributions of 9 percent of their salary, with the national government contributing 12 percent to finance the sources of the trust funds.

Other sources for the trust funds include augmentations from unprogrammed appropriations in the annual national budget, proceeds from leases, joint development and disposition of government properties, and government savings.

Other key provisions of the bill include:

The mandatory monthly contribution of active MUP is 5 percent of their salaries, with the government contributing 14 percent.