Retirement Law Revisited by Atty. Ada D. Abad CEAP Legal Counsel

advertisement
RETIREMENT LAW
REVISITED
ATTY. ADA D. ABAD
CEAP LEGAL COUNSEL
CEAP RETIREMENT FUND
CEBU WATERFRONT HOTEL
21 SEPTEMBER 2010, 4:00-5:30PM
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
1
RETIREMENT
DEFINED:
A. withdrawal from one's position or occupation
or from active working life
B. The period of a person's life during which
he/she is no longer working, or the
commencement of that period.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
2
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
3
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
4
GENERAL RULE: R.A. 7641
a. OPTIONAL at 60 years with
minimum 5 years of service
b. MANDATORY at 65 years, no
service requirement
EXCEPTION:
Where the company provides for a
Retirement Plan with earlier
retirement age, then the company’s
Retirement Plan will apply
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
5
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
6
GENERAL RULE: R.A. 7641
½ month for every year of service
(expanded concept)
EXCEPTION:
Where the School or company
provides for a Retirement Plan with
better benefits, then the company’s
Retirement Plan will apply
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
7
TWO GOVERNING LAWS ON
RETIREMENT BENEFITS:
A. REPUBLIC ACT NO. 7641, otherwise
known as the RETIREMENT PAY LAW
enacted on 09 December 1992
B. REPUBLIC ACT No. 4917, which amends
the National Internal Revenue Code on
exemption from taxes of retirement
benefits
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
8
COMPANIES
WITHOUT
RETIREMENT PLAN
COMPANIES WITH A
RETIREMENT PLAN
BUT LESS BENEFIT
COMPANIES
WITH A
RETIREMENT PLAN
R.A. 7641
R.A. 7641
R.A. 4917
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
9
COMPANIES
WITHOUT
RETIREMENT PLAN
RETIREMENT LAW TO APPLY
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
10
COMPANIES WITH A
COLLECTIVE BARGAINING
AGREEMENT OR
RETIREMENT PLAN
BUT SAME OR LESS BENEFITS
THAN MINIMUM
RETIREMENT LAW TO APPLY
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
11
1. WHO MAY BENEFIT?
• ALL EMPLOYEES IN THE PRIVATE COMPANY,
REGARDLESS OF POSITION AND CLASSIFICATION.
They shall include part-time employees, employees of service
and other job contractors and domestic helpers or persons in
personal service of another.
2. WHO MAY NOT BENEFIT?
• GOVERNMENT EMPLOYEES
• EMPLOYEES OF RETAIL AND AGRICULTURAL
ESTABLISHMENTS EMPLOYING TEN OR LESS
EMPLOYEES
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
12
3. PARAMETERS FOR AVAILMENT
• MANDATORY AT 65 YEARS OF AGE, NO
SERVICE REQUIREMENT
• OPTIONAL AT AGE 60, WITH FIVE (5) YEARS
SERVICE REQUIREMENT
• IF COMPLIED WITH, BENEFITS ARE TAXEXEMPT.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
13
4.
HOW MUCH IS THE BENEFIT?
4.1 FOR THOSE PAID REGULARLY -- ONE-HALF
MONTH SALARY COMPUTED AT 22.5 DAYS PER
CAPITOL WIRELESS VS. CONFESOR CASE.
(REITERATED IN STA. CATALINA SCHOOL VS. NLRC 2003 CASE)
• Components of one-half month salary
=
15 days x latest salary per day)
+ 5 days leave x latest salary per day)
+ 1/12 of 13th month pay
+ All other benefits that the employer and
employee may agree upon that should be included
in the computation of the employee’s retirement
pay.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
14
NOTE: The fifteen (15) days salary of
the employee is that based on his
latest salary rate.
Except:
(a) cost of living allowances
(b) profit-sharing payments
(c) other monetary benefits which are not
considered as part of or integrated into the
regular salary of the employees.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
15
4.2 FOR THOSE PAID BY THE RESULTS
AND DO NOT HAVE FIXED MONTHLY
RATE –
The basis for determination of the salary for fifteen
days shall be their average daily salary (ADS).
The ADS is the average salary for the last twelve
(12) months reckoned from the date of their
retirement, divided by the number of actual working
days in that particular period. (Source: Section 5.2 and 5.3 of
the Rules Implementing the New Retirement Law)
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
16
5.
IS THE RETIREMENT PAY UNDER
RA 7641 TAX-EXEMPT?
YES, any retiree who satisfies the requirements
of R.A. No. 7641 (retirement under a CBA or
other applicable employment, and service for at
least five years) is entitled to the tax exemption,
• even if he is a member of a reasonable private benefit
plan established by his employer and approved by the
BIR,
• PROVIDED that the retirement benefit he receives
from the Plan is equal to or less than the minimum
requirement benefit provided by R.A. No. 7641
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
17
6. REQUIREMENTS FOR TAX
EXEMPTION UNDER RA 7641
• There is no collective bargaining agreement or
other applicable employment contract providing
for retirement benefits for an employee; OR there
is a collective bargaining agreement or other
applicable employment contract providing for
retirement benefits for an employee, but it is below
the requirements set for by law.
• Employees reached the age of 60 years or more,
but not beyond 65 years
• Employees rendered at least 5 years in service
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
18
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
19
COMPANIES WITH A
COLLECTIVE BARGAINING
AGREEMENT OR
RETIREMENT PLAN
RETIREMENT PLAN TO APPLY
TAX-EXEMPT SUBJECT TO CONDITIONS
UNDER RA 4917
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
20
1. WHO MAY BENEFIT?
AVAILMENT WILL INDUBITABLY
DEPEND
UPON
THE
PARAMETERS GIVEN BY THE
RETIREMENT PLAN ITSELF
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
21
CEAP RETIREMENT PLAN, ARTICLE 10.
SEC. 1: THE NORMAL RETIREMENT DATE
UNDER CEAP RETIREMENT PLAN IS AGE
60
• LAST DAY OF THE SEMESTER DURING WHICH
HE ATTAINS AGE 60
• IF BIRTHDAY IS OUTSIDE OF A SEMESTER
(SUMMER BREAK OR SEM BREAK OR
CHRISTMAS BREAK), THEN ACTUAL BIRTHDAY.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
22
SEC. 2: OPTIONAL OR EARLY
RETIREMENT DATE
• LAST DAY OF THE SEMESTER AFTER HE HAS
RENDERED TWENTY (20) YEARS OF
CONTINUOUS SERVICE; OR
• IF THE LAST DAY OF THE SEMESTER, IF THE
20TH YEAR OF SERVICE FALLS OUTSIDE OF THE
SEMESTER.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
23
SEC. 3: SEPARATION PRIOR TO
RETIREMENT
• EMPLOYEE RESIGNS
• EMPLOYEE IS TERMINATED FOR REASONS
OTHER THAN DISMISSAL FOR CAUSE
ATTRIBUTABLE TO THE FAULT OF MEMBER
(EXAMPLE: RETRENCHMENT, REDUNDANCY, INSTALLATION OF
LABOR SAVING DEVICES)
PROVIDED AT LEAST TEN (10) YEARS OF
CONTINUOUS SERVICE
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
24
WHAT BENEFITS ARE THEY ENTITLED TO?
• RETURN OF TOTAL CONTRIBUTIONS OF
EMPLOYEE
• INCOME ACCRUED FROM HIS CONTRIBUTIONS
UNDER THE TRUST FUND
• SPECIFIED PROPORTION OF TOTAL
CONTRIBUTION OF THE EMPLOYER SCHOOL
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
25
2. PARAMETERS FOR AVAILMENT OF
TAX EXEMPTION UNDER RA 4917
• IF THE CBA OR RETIREMENT PLAN
GIVES A LOWER OPTIONAL RETIREMENT
AGE, PLUS SERVICE REQUIREMENT,
THEN SUCH WILL APPLY AS IT IS MORE
FAVORABLE TO THE EMPLOYEE.
• IF COMPLIED WITH, BENEFITS ARE TAX-
EXEMPT SUBJECT TO THE FOLLOWING
CONDITIONS UNDER REP. ACT 4917
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
26
3. REQUIREMENTS FOR TAX
EXEMPTION UNDER REPUBLIC
ACT NO. 4917
•
•
•
•
The benefit plan must be approved by the
BIR
The retiring official or employee must have
been in the service of the same employer for
at least ten (10) years
Not less than fifty (50) years of age at the
time of retirement
The retiring official or employee shall not
have previously availed of the privilege
under the retirement
benefit
CEAP RETIREMENT FUND
LECTURE OF plan of the
27
ATTY. ADA ABAD 092110
4.
HOW MUCH IS THE BENEFIT?
• IF
THE RETIREMENT PLAN GIVES
BETTER RETIREMENT BENEFITS
THAN THE MINIMUM PROVIDED BY
LAW (1/2 MONTH EXPANDED),
THEN SUCH WILL APPLY AS IT IS
MORE
FAVORABLE
TO
THE
EMPLOYEE
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
28
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
29
RECONCILIATION OF
TAX EXEMPTION UNDER
RA 7641 AND RA 4917
PER BIR OPINION DA-151-2004, March 31, 2004.
Commissioner Jose Mario BuÑag)
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
30
SITUATION ONE:
• COMPANY DOES NOT
HAVE ANY
RETIREMENT PLAN
• EMPLOYEE OPTS
FOR EARLY
RETIREMENT UNDER
REP. ACT NO. 7641, 60
YEARS PLUS AT LEAST
5 YEARS SERVICE
EFFECT: RETIREMENT BENEFIT IS TAXEXEMPT BY EXPRESS
PROVISION OF LAW.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
31
SITUATION TWO:
• EMPLOYEE WILL RETIRE
UNDER COMPANY
RETIREMENT PLAN
• COMPANY RETIREMENT
PLAN IS EQUAL TO OR
LESS THAN THAT
PROVIDED BY REP. ACT
NO. 7641
EFFECT: RETIREMENT BENEFIT IS TAX-EXEMPT
REGARDLESS OF WHETHER THE COMPANY
RETIREMENT PLAN IS REGISTERED WITH BIR OR
NOT.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
32
SITUATION THREE:
• EMPLOYEE WILL RETIRE
UNDER COMPANY
RETIREMENT PLAN
• COMPANY RETIREMENT
PLAN BENEFIT IS MORE
THAN THAT PROVIDED BY
REP. ACT NO. 7641
EFFECT: RETIREMENT BENEFIT WILL BE TAX-EXEMPT
PROVIDED THAT THE REQUIREMENTS UNDER
REPUBLIC ACT NO. 4917 ARE COMPLIED WITH
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
33
REQUIREMENTS FOR TAX
EXEMPTION UNDER REP. ACT
NO. 4917
•COMPANY RETIREMENT PLAN IS
REGISTERED WITH THE BIR
• COMPANY RETIREMENT PLAN GIVES
BENEFIT WHICH IS BETTER THAN THAT
PROVIDED BY REP. ACT NO. 7641
• EMPLOYEE MUST BE AT LEAST FIFTY (50) YEARS
OLD AND MUST HAVE SERVED THE COMPANY FOR AT
LEAST TEN (10) YEARS IN ORDER THAT HIS
RETIREMENT BENEFITS MAY BE TAX EXEMPT.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
34
This is but fair since it is clear that the
retirement benefit comes from the BIR
approved voluntary plan UNDER
REPUBLIC ACT 4917 and not from the
requirements of R.A. No. 7641.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
35
SITUATION FOUR:
• EMPLOYEE WILL RETIRE
UNDER COMPANY
RETIREMENT PLAN
• COMPANY RETIREMENT
PLAN IS NOT REGISTERED
WITH THE BIR OR DOES NOT
COMPLY WITH 50-10
REQUIREMT OF RA 4917
EFFECT: TAX TREATMENT OF THE
RETIREMENT BENEFIT SHALL BE GOVERNED
UNDER REPUBLIC ACT NO. 7641. IF NOT
FALLING UNDER CEAP
EITHER,
EXEMPTION36
RETIREMENT FUND NO
LECTURE TAX
OF
ATTY. ADA ABAD 092110
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
37
R.A. NO. 7641 DOES NOT
APPLY WHEN THE PRIVATE
RETIREMENT PLAN GRANTS
TO THE RETIRING EMPLOYEE
MORE THAN WHAT THE LAW
GIVES.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
38
As the Supreme Court stated in the case of Oxales vs. United
Laboratories, Inc., G.R. No. 152991, July 21, 2008:
R.A. No. 7641, otherwise known as “The
Retirement Pay Law,” only applies in a
situation where
(1) there is no collective bargaining agreement
or other applicable employment contract
providing for retirement benefits for an
employee; OR
(2) there is a collective bargaining agreement
or other applicable employment contract
providing for retirement benefits for an
employee, but it is below the requirements
set for by law.CEAP RETIREMENT FUND LECTURE OF
39
ATTY. ADA ABAD 092110
The reason for the first situation is to prevent
the absurd situation where an employee, who is
otherwise deserving, is denied retirement
benefits by the nefarious scheme of employers
in not providing for retirement benefits for their
employees.
The reason for the second situation is
expressed in the latin maxim pacta privata juri
publico derogare non possunt.
Private
contracts cannot derogate from the public
law.
Ang kasunduang pribado ay hindi
makasisira sa batas publiko.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
40
FIVE REASONS SUPPORT
THIS CONCLUSION
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
41
FIRST, A PLAIN READING OF THE
RETIREMENT PAY LAW.
Article 287 of the Labor Code: xxx In
the absence of a retirement plan or
agreement providing for retirement
benefits of employees in
the establishment, an employee upon reaching
the age of sixty (60) years or more, but not beyond sixtyfive (65) years which is hereby declared the compulsory
retirement age, who has served at least five (5) years in
the said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2)
month salary for every year of service, a fraction of at
least six (6) months being considered as one whole year.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
42
SECOND, THE LEGISLATIVE HISTORY
OF THE RETIREMENT PAY LAW.
It may be recalled that R.A. No. 7641 traces back
its history in the case of Llora Motors, Inc. v.
Drilon.
In this case, the Court held that the then Article
287 of the Labor Code and its Implementing
Rules may not be the source of an employee’s
entitlement to retirement pay absent the
presence of a collective bargaining agreement or
voluntary company policy that provides for
retirement benefits
for the employee.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
43
THIRD, THE LEGISLATIVE INTENT OF
THE RETIREMENT PAY LAW.
A reading of the explanatory note of
Representative Alberto S. Veloso would
show why Congress sought to pass the
Retirement Pay Law:
many employers
refused or neglected to adopt a retirement
plan for their employees because of the
absence of any legal compulsion for them to
do so.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
44
FOURTH, THE TITLE OF THE
RETIREMENT PAY LAW.
The complete title of R.A. No. 7641 is “An Act
Amending Article 287 of Presidential Decree
No. 442, As Amended, Otherwise Known as
the Labor Code of the Philippines, BY
PROVIDING FOR RETIREMENT PAY TO
QUALIFIED PRIVATE SECTOR IN THE
ABSENCE OF ANY RETIREMENT PLAN IN
THE ESTABLISHMENT.”
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
45
Res ipsa loquitur.
The thing speaks for
itself.
Isang bagay na
nangungusap na sa
kanyang sarili.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
46
FIFTH, JURISPRUDENCE.
In Oro Enterprises, Inc. v. National Labor
Relations Commission, the Court held that R.A.
No.
7641
“is
undoubtedly
a
social
legislation. The law has been enacted as a labor
protection measure and as a curative statute that
– absent a retirement plan devised by, an
agreement with, or a voluntary grant from, an
employer – can respond, in part at least, to the
financial well-being of workers during their
twilight years soon following their life of labor.”
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
47
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
48
SECTION 60(B) OF THE NIRC
GOVERNS EXEMPTION FROM THE
INCOME TAX OF THE EARNINGS
DERIVED FROM INVESTMENTS OF
THE EMPLOYEES’ RETIREMENT
FUND.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
49
GENERAL RULE:
INCOME OF THE TRUST FUND FROM ITS
INVESTMENTS IS EXEMPT FROM
INCOME TAX
EXCEPTION:
Interest income and/or yield from the bank
deposits and deposit substitutes of the trust
fund which is subject to the 20% final
withholding tax. (Secs. 24 [B] and 60 [A]) Source: Hector De Leon,
National Internal Revenue Code Annotated, 2003
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
50
RETIREMENT TRUST FUNDS ARE TAXEXEMPT IF CONDITIONS ARE
FOLLOWED:
(1) contributions are made to the trust by such employer, or employees,
or both for the purpose of distributing to such employees the earnings
and principal of the fund accumulated by the trust in accordance with
such plan; and
(2) \per specific provision of the trust fund agreement that at any time
prior to the satisfaction of all liabilities with respect to employees under
the trust, it will be impossible for any part of the corpus or income to be
used for, or diverted to, purposes other than for the exclusive benefit of
his employees provided that any amount actually distributed to any
employee or distributee shall be taxable to him in the year in which so
distributed to the extent that it exceeds the amount contributed by such
employee or distributee.
Source: Tax exemption of Employees' Trust Fund by Lesley Noreen G. Lato,
http://www.punongbayan-araullo.com/pnawebsite/pnahome.nsf/section_docs/WS965B_20-7-10
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
51
TAX
IMPLICATION
ON EARLY
RETIREMENT
BENEFITS
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
52
IN CASE OF CONFLICT BETWEEN THE TAX
CODE AND THE RETIREMENT PLAN RULES
AND REGULATIONS, THE LATTER PREVAILS.
Section 32(B)(6)(a) merely provides for minimum
requirement [e.g., 50 years of age plus 10 service years]
for tax exemption.
The Retirement Plan Rules and Regulations of the
company may provide that the normal retirement date or
early/optional retirement date be more than what is
required by the Tax Code. Consequently, in case of conflict
between the Tax Code and the Retirement Plan Rules and
Regulations, it is the latter that should prevail. (BIR No.
052-2000, October 30, 2000)
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
53
SEPARATION BENEFIT IS A
DISTINCT EXCLUSION FROM
THE RETIREMENT.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
54
In
case
of
a
corporation providing
for early retirement
program
to
their
employees, one should
determine if such was
a retirement plan or a
separation/retrenchme
nt program.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
55
IF part of retirement plan,
there is a need to go through
the requirements provided in
the Tax Code or the retirement
plan in order to be tax exempt.
IF it is simply a separation or
retrenchment
program,
it
should satisfy requirement
under Section 32 (B) (6) (b), -separation for causes beyond
control of the employee.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
56
IF EMPLOYEE OF TEN YEARS SERVICE
RESIGNS UNDER CEAP RETIREMENT
PLAN, IS THIS TAX-EXEMPT?
SINCE THIS IS NOT RETIREMENT, AND
NEITHER IS IT A SEPARATION DUE TO
DEATH, SICKNESS OR PHYSICAL DISABILITY,
OR AUTHORIZED CAUSE FOR
TERMINATION, THEN IT MAY NOT BE TAXEXEMPT.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
57
RA 4917, Section 1. Any provision of law to
the contrary notwithstanding, the
RETIREMENT BENEFITS received by officials
and employees of private firms, whether
individual or corporate, in accordance with a
reasonable private benefit plan maintained by
the employer shall be exempt from all taxes,
XXX;
Provided, That the retiring official or employee has been in
the service of the same employer for at least ten (10)
years and is not less than fifty years of age at
the time of his retirement:
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
58
Provided, further, That the benefits granted under
this Act shall be availed of by an official or employee
only once:
Provided, finally, That in case of separation of an
official or employee from the service of the
employer due to death, sickness or other
physical disability or for any cause beyond
the control of the said official or employee,
any amount received by him or by his heirs from the
employer as a consequence of such separation shall likewise
be exempt as hereinabove provided
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
59
WHAT IS THE
RECKONING
PERIOD FOR
PURPOSES OF
COMPUTATION
OF BENEFITS?
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
60
In reckoning the length of service, the
period of employment with the same
employer before the effectivity date of
the law on January 7, 1993 should be
included. (Guidelines for the Effective
Implementation of R.A. 7641, The Retirement Pay
Law, 24 October 1996)
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
61
The minimum length of service in an
establishment or with an employer of
at least five (5) years required for the
entitlement to retirement pay shall
include authorized absences and
vacations, regular holidays and
mandatory fulfillment of a military or
civic duty (Section 4, Rules Implementing the
New Retirement Law)
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
62
ARE ALLOWANCES,
COMMISSIONS AND
OTHER BENEFITS
INCLUDED IN THE
COMPUTATION OF
THE RETIREMENT
BENEFITS?
GENERAL RULE: THESE
ARE EXCLUDED.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
63
IF THE COMPANY PLAN
PROVIDES FOR ITS EXCLUSION,
THEN IT IS EXCLUDED. (Oxales vs.
United Laboratories, Inc., G.R. No. 152991, July 21, 2008)
IF THE COMPANY PLAN OR CBA
PROVIDES FOR ITS INCLUSION,
THEN THE ALLOWANCES,
COMMISSIONS AND OTHER
BENEFITS ARE INCLUDED.
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
64
THANK YOU VERY
MUCH FOR THE
OPPORTUNITY TO
BE OF SERVICE TO
YOU.
HAVE A GOOD
EVENING!
CEAP RETIREMENT FUND LECTURE OF
ATTY. ADA ABAD 092110
65
Download