President Ferdinand Marcos Jr. has signed into law a measure adjusting the monthly benefits of retirees from the Department of Foreign Affairs (DFA).

The new law, Republic Act 12181, signed on 2 May 2025, applies to retired officers and employees of the DFA who are receiving a monthly pension from the Government Service Insurance System (GSIS), as well as former government workers who opted to retire under Republic Act 1616.

The law provides the option to retire after rendering a total of 30 or 20 years of service, regardless of age, provided they have reached the age of 65 and have enjoyed retirement for at least 15 years.

However, DFA officers and employees who have retired but do not meet these qualifications will only receive the benefits applicable to them.

Each retiree receiving a monthly pension from the GSIS shall receive a monthly pension differential (MPD), which will serve as the difference between the adjusted monthly pension computed by the DFA and the actual monthly pension provided by the GSIS.

Computation

The MPD shall be computed as the adjusted monthly pension minus the actual GSIS monthly pension, multiplied by the adjustment factor.

“The adjusted monthly pension is equal to the product of the monthly salary of the active DFA personnel holding the same rank last held by the retiree, based on the updated salary schedule, multiplied by 2.5 percent and the retiree’s recorded creditable service in the DFA,” the law states.

For the first five years of the law’s implementation, the monthly salary corresponding to Salary Grade Step 1 of the fourth tranche of RA 11466 — the Salary Standardization Law of 2019 — shall serve as the basis for computing the adjusted monthly pension.

Five years after the law takes effect, and every five years thereafter, the MPD may be adjusted, provided that the funds collected by the DFA are sufficient to finance the adjustments.

However, the pension differential of DFA retirees shall not be automatically increased whenever there is an annual increase in the salary of active DFA personnel holding the same ranks as the retirees.

In case of death, surviving family members below the age of 18 and legal spouses of DFA retirees shall receive 50 percent of the retiree’s benefits.

The new law will take effect 15 days after its publication in the Official Gazette or in newspapers of general circulation.