WHEREAS,
pursuant to Proclamation No. 1081, dated September 21, 1972 and
Proclamation No. 1104, dated January 17, 1973, martial law is in effect
throughout the land;chanroblesvirtualawlibrary
WHEREAS, it is to the best interest of the country that the welfare of
those who serve in the Armed Forces of the Philippines after their
retirement or honorable separation be insured;chanroblesvirtualawlibrary
WHEREAS, since the enactment of Republic Act No. 340, which is the law
providing for retirement and separation benefits of the Armed Forces of
the Philippines and all the latter's amendments, no separate fund or
scheme to insured payment of said benefits has ever been established
resulting in complete reliance upon the yearly appropriations; chanroblesvirtualawlibrary
WHEREAS, in the course of time since World War II, the ranks of retired
servicemen have swelled, entailing a staggering sum every year which
drains a substantial portion of the appropriations for the Armed Forces
of the Philippines;chanroblesvirtualawlibrary
WHEREAS, it is now time that a funding system or scheme be established
to guaranty the continuous financial support to the AFP military
retirement system;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, in my capacity as Commander-in-Chief of all the Armed
Forces of the Philippines, and pursuant to Proclamation No. 1081, dated
September 21, 1972 and Proclamation No. 1104, dated January 17, 1973,
do hereby decree the creation of an Armed Forces Retirement and
Separation Benefits System, in accordance with the following:cralaw:red
Section 1. An Armed Forces Retirement and Separation
Benefits System, referred to in this Act as "System", for payment of
retirement and separation benefits provided and existing laws to
military members of the Armed Forces of the Philippines and such
similar laws as may in the future be enacted applicable to commissioned
officers and enlisted personnel of the Armed Forces of the Philippines
is hereby established.
Section 2. The System shall be funded as follows:cralaw:red
(a) Appropriations and contributions;chanroblesvirtualawlibrary
(b) Donations, gift, legacies, bequest and others to
the System;chanroblesvirtualawlibrary
(c) All earnings of the System which shall not be
subject to any tax whatsoever.
Section 3. The sum of two hundred million pesos shall
be paid to the System in four equal annual payments out of funds of the
Treasury, the first remittance to make in the month of July, nineteen
hundred and seventy-four. chanroblesvirtualawlibrary
Section 4. Officers and enlisted personnel in the
active service shall contribute to the System an amount equivalent to
four per cent (4%) of their monthly base and longevity pay, which
contribution shall be deducted from their pay from the Armed Forces of
the Philippines and paid to the System: Provided, however, That any
officer or enlisted person who is due for compulsory retirement or is
optionally retirable and actually elects to retire within one year from
the approval of this Act, shall no longer be required to contribute to
the System: Provided, further, That any officer or enlisted person who
is separated through no fault of his own and is not eligible for either
retirement or separation benefits shall upon his separation, be
refunded in one lump sum all his actual contributions to the System
plus interest at the rate of four per cent (4%).
Section 5. Retirement and/or separation gratuity
payments in favor of persons already retired at the time of the
effectivity of this Act as well as those who under the preceding
section are not required to contribute to the system shall be included
in and funded out of the annual appropriations for the Armed Forces of
the Philippines: Provided, however, That in case the total cash
requirement covering such retirement and/or gratuity payments exceed
one hundred million pesos in any year, the excess shall be borne out of
the funds of the System: Provided, further, That the preceding proviso
shall take effect after four years from the approval of this Act.
Section 6. The System shall be administered by the
Chief of Staff of the Armed Forces of the Philippines through and
agency, group, committee or board, which may be created and organized
by him and subject to such rules and regulations governing the same as
he may, subject to the approval of the Secretary of National Defense,
promulgate from time to time: Provided, however, That investment of
funds of the System shall be decided by the Chief of Staff of the Armed
Forces of the Philippines with the approval of the Secretary of
National Defense.
Section 7. This Act shall take effect upon its
approval.
Done in the City of Manila,
this 30th day of December, in the year of Our Lord, nineteen hundred
and seventy-three.
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