Extend Retirement Benefits for Military Personnel

Section 2 covers persons who were retired, paid gratuity under Republic Act No. 340 (as amended), and had an effective retirement date prior to January 1, 1955.
Such persons may, at their option, elect to receive the annual retirement pay provided in Section 2 of Republic Act No. 340 in lieu of the gratuity previously paid.
Section 2 provides that once the election is made, the persons are entitled to the annual retirement pay, subject to the provisions and limitations stated in the Act.

Section 3 requires that retirement pay, gratuity, or pension payable under this Act be based on the greater of two standards.
The first standard is the same rank and rate of salary used to compute the original retirement pay, pension, or gratuity.
The second standard is the rank entitled for retirement under Section 10 of Republic Act No. 840, as amended by Republic Act No. 870, and the rate of base and longevity pay the person would have received if in active service on July 26, 1948.
Section 3 adds a rank readjustment rule: if the person’s pre-war permanent rank was not readjusted due to death, retirement, or honorable separation, the person is treated as if promoted to the rank they would have reached had pre-war permanent ranks been readjusted under the 1947–1948 Armed Forces readjustment process.
Under Section 3, retirement computation for that scenario uses the base and longevity pay for the higher rank as of July 26, 1948, unless the person qualifies for a higher retirement pay, pension, or gratuity under Section 3.
Section 3 provides a further upgrade condition: if the person was in active service for at least one year after the effective date when the permanent rank would have been readjusted in 1947 or 1948, the person is retired in the rank next higher to that determined under the immediate preceding proviso, but never higher than the rank of colonel.

Section 4 provides that the monthly pension payable to a person retired under this Act is paid starting July 26, 1948.
Section 4 requires an election when the retired person earns government compensation during periods covered by the monthly pension: if the retired person received any salary or compensation from the Government or its branches, agencies, or instrumentalities, and the salary or compensation has not been previously refunded, the retired person must choose between:
- receiving the monthly pension for that period; or
- retaining the salary or compensation received for the same period.
Section 4 states that the retired person is not entitled to both the monthly pension and the salary/compensation for the same period where refund has not been made.
Section 4 mandates deductions: retirement pay, pension, or gratuity received under this Act is subject to deduction of any other retirement pay, pension, or gratuity received from the Government that accrues and corresponds to a period after July 26, 1948.
Section 4 bars a particular method of refund: certificates of indebtedness issued or to be issued under Republic Act No. 304 and all its amendatory supplementary Acts are not acceptable as payment for the refund of any pension, retirement pay, or gratuity required to be refunded under this Act, even if there is any provision to the contrary.

Section 5 protects existing benefits: this Act does not reduce or adversely affect retirement benefits or privileges authorized for retired persons or beneficiaries on the date this Act takes effect.
Section 5 prevents back-pay and access to additional active service credit: it does not authorize payment of back monthly retirement pay or pension corresponding to any period when the retired or separated person was in active service of the Philippine Army or a duly recognized guerrilla component.
Section 5 also prevents restoring or crediting additional military service as a consequence of this Act.
Section 6 makes certain paragraph (e), Section provisions of Republic Act No. 340, as amended by Republic Act No. 1380, applicable to all persons previously retired or separated under Republic Act No. 340, and to persons retired under this Act.
Section 6 further limits back pension: no back pension or retirement pay is payable under Section 9 of Republic Act No. 340 for any period prior to July 26, 1948.
Section 7 prohibits payment of back amounts on the effective date: no back pension, retirement pay, or gratuity is payable to any person under this Act on the date it takes effect.

Section 8 appropriates PHP 1,200,000 for carrying out the Act.
Section 8 also appropriates any additional sums appropriated by law for the retirement of members of the Armed Forces of the Philippines for the same purpose.