Tax savings
Relief from one-time retirement payment
Maximize the earning potential of the fund
Improve employee retention
Build a reputable corporate image
Overview
Retirement Fund is an employee plan set up by a company to fund the retirement/separation benefit payments of its qualified employees at a future date. It can be set up using either or a combination of the following plans:
- Fixed Benefit Plan/Defined Benefit Plan – A Retirement plan where only the employer is required to contribute to the Fund and the benefits to be received by the employees are defined.
- Contributory Benefit Plan/ Defined Contribution – A Retirement plan where the company or their employees or both make fixed contributions. The funds accumulated are eventually distributed to separated/retired/incapacitated employees.
How we can help
With our dedicated Sales Officers and Account Officers, we can help you set up your company’s retirement fund and when the account is opened, you have professional and experienced investment managers prudently manage the funds contributed to the retirement fund account in accordance to your risk appetite and liquidity requirements.
Already have a Retirement Fund account? We can act as co-Trustee or an Investment Manager so that you are able to compare return performance and services.
| Minimum investment amount | PHP10,000,000 |
| Minimum employee headcount | 10 |
Requirements
for a valid Retirement Plan
Requirements for a valid Retirement Plan
- It must be a definite written program.
- It must be a permanent and continuing program unless terminated by virtue of a valid business reason.
- It must cover at least 70% of all officials and employees.
- It must be non-discriminatory.
- It must be non-diversionary.
- It must provide for non-forfeitable rights.
- It must be administered by a Trust.
Documents Required
| From the Company | From SBC TAMG |
|---|---|
|
|
Â
How to set up your Retirement Fund
1
Establish a Retirement Plan Rules & Regulations through your Retirement Committee
2
Perform actuarial valuation through an independent actuary
3
Appoint Security Bank as your Trustee or Investment ManagerÂ
What we can do for you
Fund set up
Design & build your fund’s investment portfolio
Performance Monitoring
Regularly review & update your investment’s performance
Fund Disbursement
Settle retirement payment of retiring members
Fund Security
Accounting & safekeeping of your fund
Want to open a Retirement Fund or learn more about the product?
Email SBC Trust and Asset Management Group at [email protected].
Laws
Particulars |
Without a Retirement Plan |
With a Retirement Plan |
| Law | RA No. 7641 mandates the payment of retirement benefits to qualified private sector employees in the absence of any retirement plan established by the employer | To encourage the corporations to establish a qualified retirement plan, R.A. 4917 provides for tax benefits and incentives |
| Age and No. of Years of Service to be entitled to Retirement Pay | 60 years old and 5 years of continuous service to the Company | Defined in the Company’s Plan Rules which may come in the following retirement age and service:
|
| Tax-exemption on Payment to Employee | Death, sickness, physical disability or for any cause beyond the control of the said official or employee | Must be at least 50 years old and 10 years of continuous service to the Company. Death, sickness, physical disability or for any cause beyond the control of the said official or employee |
| Tax-exemption on Investments of the Retirement Fund | None | Exempt from the 20% Final Withholding taxes (with BIR Tax-exempt Certification) |
| Retirement Pay | At least one half (1/2) month salary for every year of service. The one-half (1/2) month salary is comprised of 15 days salary, 1/12 of the 13th month pay and 5 days service incentive leave or a total of 22.5 days for every year of service | Defined in the Company’s Plan Rules which can pay from a minimum of 1 month for every year of service to as much as 3 months for every year of service |
DISCLAIMER:
Under Republic Act No. 4917, the Bureau of Internal Revenue (BIR) determines the qualifications for the tax exemption of the company’s retirement plan.