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CEAP Retirement Plan Profile

The CEAP Retirement Plan has come a long way since its establishment on July 1, 1968 spearheaded by 22 schools upon the initiative of the CEAP National Board. After securing approval from the Bureau of Internal Revenue (BIR) as a qualified and tax-exempt Plan under R.A. 4917 on April 11, 1969, it has since undergone several amendments through the years, the latest of which was on September 22, 2011.

In a way, the Plan was ahead of its time when it was established, brought about by the fact that there was no law requiring private employers, including private schools, colleges and universities, to pay retirement benefits to their employees. In fact, it even preceded the Bureau of Private Schools Memorandum No. 99, series of 1974 and Memorandum No. 127, series of 1974, issued on August 12, 1974 and October 29, 1974, respectively, requiring establishment or adoption of a retirement plan for the teaching and non-teaching personnel in each private school to enhance careerism, bolstered by PD No. 451.

The Plan is administered by a 13 member Retirement Commission. All questions relating to the operation and administration of the Retirement Fund, except those strictly pertaining to its investments, are resolved by the Retirement Commission. This includes but is not limited to the power to interpret, construe and administer the Plan to determine the rights of members and their beneficiaries to the Fund, and all such powers necessary or useful in the discharge of its duties.

The Retirement Plan’s enhanced vision, mission and goals were put in place during the Commission’s strategic plan meeting at CSB Hotel last January 14, 2012 and approved by the CEAP National Board during their strategic plan meeting at PHINMA Training Institute in Tagaytay City last January 17, 2012.

Vision – to make the CEAP Retirement Plan the primary plan for private schools and other education related institutions nationwide.

Mission – to provide flexible retirement options and deliver retirement related value-added services for its participating institutions and members; to exercise judicious fiduciary responsibility in providing reasonable return and growth for the monies entrusted to its care; and to operate as a non-profit organization committed to the guiding principles of solidarity, ethical conduct, accountability, excellence and continuous process improvement.

Strategic goals – to provide retirement plan options to meet the unique needs of the participating institutions and members; to increase membership to the CEAP Retirement Plan; to achieve a more cohesive and efficient process in the administration of the Plan; and to ensure responsible stewardship of the assets and monies of the participating institutions and members.

Nature of the Plan

1. What is the CEAP Retirement Plan?

It is a Plan established to provide retirement and other benefits for the qualified employees of (a) the CEAP member schools and CEAP Secretariat and Retirement Office and (b) other Catholic institutions which are subsequently accepted by the CEAP Retirement Commission.

2. What other institutions may be accepted as Participating Employers in the Plan?

Any Catholic school, college, university, congregation, order or diocese may be accepted by the Retirement Commission as a Participating Employer upon application and upon signing a pledge to the effect that it will pay the contributions required by the Plan for its covered employees, provided that said Catholic school or institution becomes CEAP-accredited within 12 months from the date of acceptance in the Plan and that, in the opinion of the Commission, sufficient proof exists to show that the applicant intends and has the capacity, financial and otherwise, to continue its participation in the Plan indefinitely, and provided further that its acceptance will not prejudice the tax exemption of the Plan.

3. Is the CEAP Retirement Plan qualified under BIR regulations?

Yes and as such, Participating Employers and Members of the Plan are entitled to the following privileges:

  • All school contributions to the Fund are deductible from the schools’ taxable income, if any;
  • The income of the retirement Fund is exempt from tax; and
  • The retirement benefit payments from the Fund of the qualified and retired members are exempted from tax.

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Membership

1. Who are qualified to become members of the Plan?

All regular employees of the Participating Employers including probationary employees but excluding part-time, casual and temporary employees, whose ages are less than 60 years old shall automatically become members of the Plan.

2. What is the rationale for including probationary employees to automatically become members of the Plan?

The rationale for this is that under the Labor Code, as amended by R.A. 7641, the lump sum retirement benefit is computed from date of employment as a probationary employee, not from the date of permanency or acquisition of teneure. Hence, a Participating Employer might as well start contributing to his employee’s retirement from the date of hiring as a probationary employee and not three (3) years later. If the employee does not become permanent, his credits in the Retirement Plan due to his employer’s contributions are forfeited and used to reduce the employee’s subsequent contributions.

This is also in line with the requirement in the Social Security Act that a probationary employee is covered by Social Security from the date of hire. It will also mean that the counting of periods of continuous service will commence from date of hiring as a probationary employee and not three (3) years later (in the case of academic employees) or six (6) months later (in the case of non-academic employees).

3. Does a full-time employee who changes his status to a part-time employee still qualify to become a member of the Plan?

The CEAP Retirement Plan does not cover part-time employees. The original Plan considered as members “regular” employees of a Participating Employer. The latest amended Plan categorically states that “part-time” employees are excluded.

In view of this provision in the Plan, a part-time employee can not be a member of the Plan. And a full-time employee who changes his status to a part-time employee may be considered as one who has resigned as a full-time employee and applied for employment and was hired as a part-time employee. By that voluntary change of status from full-time to part-time, the employee losses even the tenure he had as a full-time employee. Another consequence is that he can no longer be considered a member of the CEAP Retirement Plan and therefore must be paid whatever benefits he is entitled to under Section 3, Article XI of the Plan.

4. What is meant by continuous service?

Continuous service means the uninterrupted service as determined by the Participating Employer’s personnel records. Leaves of absence approved by the Participating Employer with or without pay and school vacation shall not constitute an interruption of service, but only periods of compensated service shall be used in computing benefits under the Plan.

5. How does an Institution or School apply for membership in the Plan?

Institutions or schools interested in joining the Plan should either first get themselves CEAP-accredited or accepted by the CEAP Retirement Commission. They can get in touch with:

The Director

CEAP Retirement Plan Office

3rd Floor, CEAP Building

No. 7 Road 16, Bagong Pagasa

1105 Quezon City

Telefax no. (02) 426-2677

All communications regarding application for Plan membership should be sent to the Retirement Plan Office. Thereafter, the Office will submit to the Retirement Commission for approval all such applications. The Institution or School will be informed of the Retirement Commission’s decision in writing.

6. If a member resigns after having been admitted into the Plan and is afterward re-employed by the same or new Participating Employer, will he be treated as a new member?

Yes, except when it concerns portability of benefits.

7. What is meant by portability of benefits?

It is a feature of the Retirement Plan wherein the credit earned by a member from the Participating Employer who has rendered less than 10 years of continuous service is carried to his new Participating Employer and the length of service in both will be taken into consideration in determining his total years of continuous service for purpose of Section 3, Article XI only but not for the purpose of computing his retirement benefits. Furthermore, the following requirements must be met:

  • He must first secure the approval of the Participating Employer whose service he is leaving.
  • He must notify in writing the Chairperson of the CEAP Retirement Commission of his decision; and
  • He must be employed by another Participating Employer within a period of one (1) year following the effective date of his resignation.

However, if upon resignation or separation, the Member has already rendered at least ten (10) years of continuous service with a Participating Employer or with two or more successive Participating Employers, he shall be paid the proportion of the amount standing to his credit, as provided in Section 3, Article XI.

Consequently, the forfeitures arising out of the separation of the member who has rendered at least 10 years of continuous service but less than 20 years of continuous service, shall be proportionately divided among the member’s previous employer/s whose credit were carried by their former employee to his current Participating Employer, whose service he is leaving.

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Beneficiaries

1. Who can be nominated as beneficiaries?

Any member shall upon joining the Fund, forthwith nominate in writing in such forms, as shall be described by the Retirement Commission, a person or persons to receive the amount which may be due him in case of his death or total disability from among those enumerated hereunder in the order specified.

  • Legitimate spouse and children
  • Parents
  • Brothers and sisters
  • His estate or any other person or entity

However, single or unmarried members may indicate any beneficiary not necessarily following the order provided by the law on intestate succession.

2. If a member fails to nominate any beneficiary, who shall receive the benefits due him in the event of his death?

If at the death of a member there shall exist no valid nomination by him of a beneficiary, he shall be conclusively presumed to have appointed, as his beneficiary or beneficiaries, the person or persons in the first of the following classes then surviving.

  • Legitimate spouse and children
  • Parents
  • Brothers and sisters
  • His estate

3. If the beneficiary is a minor or under any disability at the time of death of the member, to whom shall the benefits be given?

In case the beneficiary is a minor or is under any disability to give a legal discharge for payment of the benefits, the benefits shall be paid to the duly appointed judicial guardian for and in behalf of the minor or person under disability, except that where beneficiary is a minor and the benefits due him amount to P 50,000.00 or less, payment may be made to his legal guardian, in accordance with Article 225 of the Family Code of the Philippines.

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Contribution

1. Are the members required to contribute to the CEAP Retirement Fund?

The CEAP Retirement Plan is basically non-contributory. No member shall be required to make any contribution to the Fund. However, prior to his retirement, a member may, at his option, elect to contribute monthly to the Trust Fund an amount equal to 1% but not more than 4% of his salary, provided that the option, once exercised, will serve as a continuing authority for the Participating Employer to deduct every month thereafter the corresponding amount from his salary and to remit the same to the Trustee. The contribution shall be subject to the provisions of the Plan and shall not be subject to withdrawal unless for a cause provided herein.

2. How does a member apply for a voluntary contribution?

A member who wishes to contribute voluntarily to the Fund should fill out Authorization for Voluntary Contribution – Form No. 10 which will serve as a continuing authority for the Participating Employer to deduct every month the indicated percentage of salary as voluntary contribution and to remit the same to the Trustee.

3. How much should a Participating Employer contribute to the Fund in behalf of its covered employees?

Starting from the date of acceptance in the Plan, each Participating Employer is required to contribute to the Fund the following amounts:

  • Past service – this contribution will be equal to five percentum (5%) of the member’s average salary for the twelve month period immediately preceding the date of acceptance of the Participating Employer in the Plan and shall be reckoned according to the definition of “past service” given in Section 1, Article II. The past service contributions will be paid into the Trust Fund for the credit of the member concerned either in lump sum or in equal monthly installments over a period of 10 years or over a period up to the member’s normal retirement date, whichever is the shorter period.
  • Future service – this monthly contribution will be equal to four per centum (4%) of the member’s salary. Remittance to the Fund for the period or month covered shall not be later than 15 calendar days of the following month.

On a voluntary basis, Participating Employers which can afford to contribute more to the Trust Fund may further increase their future service contributions provided that every percentage increase in the Participating Employer’s contributions may be matched by the employee as forced savings.

4. What is meant by Future Service?

Future service shall mean periods of covered employment on or after July 1, 1968 or after the acceptance of Participating Employer for which contributions are paid in accordance with Section 2, Article VI.

5. What is meant by Past Service?

“Past Service” shall mean that continuous service of a Member to the Participating Employer from the date the Member is hired by his Participating Employer and met the requirements for membership in the Plan to the date of acceptance of the Participating Employer in the Plan or to the date the member acquired tenure.

6. How can we send our teller validated deposit slips and allocation sheets electronically to ASC Philippines, Inc. and CEAP Retirement Plan Office.

It is simple enough. Please be guided by the instructions indicated hereunder:

Procedure in Submitting Contributions On-Line

Step 1. Payment of Contributions

a. Thru Metrobank branches nearest your location using “Payment Slip for Companies with Collection Arrangements” (green color deposit slip).

b. Company with Collection Arrangement – refers to CEAP Retirement Trust Fund.

c. Customer’s Name – refers to Participating Employer

d. Subscriber’s Number – refers to School Code

e. Reference Number – refers to Period Covered in mm-yyyy format (example: March 2010)

Step 2. Submission of Contribution Report and Payment Slip

Please send by email the following attachments immediately after payment to the Metrobank branch nearest your location:

a. Copy of machine validated payment slip

b. Contribution report/allocation sheet (CEAP RB Form No. 5) in Excel Format (password protected). Please create a template of allocation sheet in your computer.

c. If contributions are applied against FORFEITURES, please include a copy of the letter advise from the CEAP Retirement Plan Office ( if applicable).

Step 3. To those with email facilities, please send attachments to the following email addresses

a. ASC Philippines, Inc.

1. Sheryl S. Gamboa Sheryl.gamboa@asctrust.com

b. CEAP Retirement Plan Office

1. Diane Grace Dumaua diane.dumaua@ceap.org.ph

To those without email facility, please submit hard copies of payment slip and clear copies of allocation sheets to the CEAP Retirement Plan Office.

Step 4. Deadline in the submission of payments slip(s) and allocation sheets is on the 10th calendar day of the following month. If the 10th calendar day falls on a Saturday or Sunday, the deadline will be the Monday succeeding it. For example, contributions paid in the month of March 2010 will be due not later than the 10th of April 2010. If reports are not submitted on this date, contributions will be posted to employees’ individual ledgers the following month, which going by our example is May 2010.

Kindly forward to the CEAP Retirement Plan Office your personnel’s email addresses authorized to send documents/attachments. This is being done for verification and control purposes.

  1. How do we properly fill up “Payment Slip ForCompanies With Collection Arrangements” and Retirement Contribution Report – Form No. 5?

Please follow the guidelines illustrated hereunder:

no.5.jpg

gcp.jpg

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Administration

1. How is the Plan administered?

The Plan is administered by a Retirement Commission. The Retirement Commission is composed of not less than thirteen (13) members appointed by the Catholic Educational Association of the Philippines from nominees of the Retirement Fund’s biggest stakeholders. The CEAP President, CEAP Executive Director and CEAP Treasurer shall serve as ex-officio members of the Commission.

Each member serves for a term of three (3) years and that no member shall serve for more than two (2) consecutive terms.

The Chairperson of the Commission is elected by the members of the Commission every 2 years.

Any vacancy occurring in the Commission caused by death, resignation or by expiration of term is filled by nominee submitted by the stakeholder concerned and endorsed to the CEAP National Board for approval.

A member nominated to fill the vacancy only serves for the unexpired term of his predecessor in the Commission.

All questions relating to the operation and administration of the Fund, except those strictly pertaining to its investments shall be resolved by the Retirement Commission. This includes but is not limited to the power to interpret, construe and administer the Plan to determine the rights of members and their beneficiaries to the Fund, and all such powers necessary or useful in the discharge of its duties. The Retirement Commission may seek the advice of counsel and may appoint an independent internal and external auditor to audit the Fund as well as engage the services of an independent business process outsourcing provider for the administration and record keeping services of the Fund, professional fees and expenses to be charged to the Fund.

2. What is the role of the Retirement Commission’s Investment Committee?

The Investment Committee anchors its investment philosophy on the belief that it has a fiduciary responsibility to the Participating Employers and members of the Plan to exercise prudence and conservatism in the management of their funds. It also believes that superior returns can only be achieved over the long-term by gaining a thorough understanding of the myriad and constantly changing factors affecting the investment markets and the active participation in the management of the Fund’s portfolio.

3. Who has been appointed as Lead Trustee of the CEAP Retirement Fund?

Metropolitan Bank and Trust Company is the Lead Trustee of the CEAP Retirement Fund. Other than being one of the Fund’s investment managers, the bank’s extensive branch network all over the Philippines is utilized by the Plan’s Participating Employers in the remittance of their monthly contributions to the Fund.

The other Trustee Banks are Bank of the Philippine Islands, Deutsche Bank AG Manila, Banco de Oro Universal Bank, and Rizal Commercial Banking Corporation .

4. What is the role of the Lead Trustee?

The Lead Trustee receives, invests and re-invests the contributions from the Participating Employers and voluntary contributions from the members and releases payments of benefits due to the retired/separated individual members and beneficiaries of the Plan.

5. What is the role of ASC Philippines, Inc.?

As Fund Administrator, ASC Philippines, Inc. is in charge of backroom operations of the Fund, handles record-keeping, computation of benefits, consolidation of financial statements and preparation of the Participating Employers’ and individual members’ Statement of Participants’ Equities and individual equity statements respectively.

Participating Employers and members can view statement of equities online thru ASC Philippines, Inc. web portal: www.ascphil.com

The Fund Administrator can be contacted at this address:

ASC Philippines, Inc.

8-02A 8/Flr. Accralaw Tower

2nd Ave. corner 30th St., Crescent Park West

E-Square IT Zone, Bonifacio Global City, Taguig

Tel. (02) 919-3688 Web site: www.ascphil.com

Contact Person:

Ms. Sheryl S. Gamboa

Transactions Superviso

Email: sheryl.gamboa@asctrust.com

6. How are the members informed of the amount standing to their credit at a a certain date?

The Fund Administrator prepares and furnishes each Participating Employer and member a written statement or statements of:

  • The accumulated contributions remitted by the Participating Employer in behalf of its covered employees plus the earnings as of June 30 and December 31;
  • The status of the respective member’s accounts as of June 30 and December 31, inclusive of the member’s accumulated voluntary contributions plus earnings, if any; and the accumulated contributions made by the Participating Employer in his favor plus the income earned.

7. Can individual members view their equities on line?

Yes, they can. Go to ASC Homepage at www.ascphil.com Scroll arrow down and click: Philippines – CEAP. Then, just follow the procedures indicated hereunder. Access is available 24/7.

PARTICIPANT ACCESS:

Log in to your account.

To do so, you will need your:

1. User ID (Your TIN without dashes), and

2. Password*

3. Click on Participant

* Initially, your Password is the last four digits of your TIN.

Upon receiving these instructions, please access your account and change

Your User ID and Password to another that you can easily remember.

Account Navigation


Once you have successfully logged in, the Participant Summary Page will appear where you can view your personal information, current account balance, as well as a chart illustrating your portfolio.

On the upper side ft of the page, the following options are available to choose from:

 Logout At any time during your visit, you may select this to end your session.

 Summary View your personal information, current account balance, as well as a chart illustrating your portfolio.

 Password Change Select this to change your User ID and Password.

 Account Balance View your balance by investment and by source

 Personal Info This allows you to edit your personal information. Please access this to add your email address to our database for future notifications and mailings.

 Statements View any available school statements.

 Transactions History View historical account activity by transaction.


Disclaimer: ASC is instructed to act on your instructions and neither ASC nor your employer will be liable for any loss for implementing any such instructions. ASC will implement instructions only when proper identification is simultaneously provided. This identification will consist of your TIN, Password, and other personal identifying information.

8. Can Participating Employers view Statement of Participants’ Equities on line?

Yes, they can. Go to ASC Homepage at www.ascphil.com Scroll arrow down and click: Philippines – CEAP. Then, just follow the procedures indicated hereunder. Access is available 24/7.

EMPLOYER ACCESS

Log in to your account.

To do so, you will need your:

1. User ID *

2. Password*

3. Click Sponsor

* For Confidentiality purposes, Initially, please fill out the attached form for the USER ID and Password of your authorized representative.

Upon set up of your sponsor accounts, please access your account.

Account Navigation


Once you have successfully logged in, the Participant Summary Page will appear where you can view your personal information, current account balance, as well as a chart illustrating the school’s portfolio.

On the upper side of the page, the following options are available to choose from:

 Logout At any time during your visit, you may select this to end your session.

 Home View your personal information, current account balance, as well as a chart illustrating your portfolio.

 Account Info View the schools balance by source

 EE Search The sponsor has an option to view the participants/employees individual accounts

 Statements View any available statements (Details per participants and Totals for the school)


Disclaimer: ASC is instructed to act on your instructions and neither ASC nor your employer will be liable for any loss for implementing any such instructions. ASC will implement instructions only when proper identification is simultaneously provided. This identification will consist of your TIN, Password, and other personal identifying information.

dividual account option to vs Totals for the school)

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Retirement Dates

1. When can a member retire from the service of a Participating Employer?

A member may retire on early, normal or late/deferred retirement date.

2. What is the normal retirement date?

For faculty or academic members, the normal retirement date of a member shall be the last day of the semester during which he attains age sixty (60) or, if he reaches age 60 outside of a semester, his actual birthday.

For other members, the normal retirement date shall be the day he reaches age 60.

3. What is the optional or early retirement date?

For faculty or academic members, with the consent of the Participating Employer, a member may retire at an early retirement date which may be the last day of the semester after he has rendered ten (10) years of continuous service or if the last day of his 10th year of service falls outside of a semester, on the said last day itself.

For other members, the early retirement date, with the consent of the Participating Employer, may be the last day the member has completed twenty (10) years of continuous service to the Participating Employer.

4. What is the deferred/late retirement date?

Under exceptional circumstances and upon the request of the Participating Employer, a member may be asked to continue active service after his normal retirement date but in no case to exceed age 65. Contributions to the Plan with respect to such member shall continue until his actual retirement from the Plan.

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Payment of Benefits

1. What is the benefit scheme of the Plan?

The retirement benefits payable under the Retirement Plan shall be computed based on the total amount standing to the credit of the member in the books of the Trust Fund consisting of his own contributions and income earned, if any, and the contributions of his Participating Employer in his favor plus the income earned respectively credited thereto determined as of the last valuation date.

2. What are the benefits of a member upon reaching early and normal retirement date?

A member who reaches his normal retirement date or who elects to retire upon reaching his early retirement date shall be entitled to and shall be paid the whole amount standing to his credit at retirement.

If the early or normal retirement benefits to be received by the member from contributions made by his Participating Employer in his favor shall be less than what is required by law as a lump sum retirement benefit, his Participating Employer shall pay the difference.

Retirement benefits under the Labor Code, as amended by R.A. 7641, are exempt from income tax, provided:

For the normal retirement and late retirement benefits to be exempted from tax, the retiree must be at least sixty (60) years of age and have rendered at least five (5) years of continuous service with his Participating Employer.

For the early retirement benefit to be exempted from tax, the retiree must be at least fifty (50) years of age and have rendered 10 years of continuous service with his Participating Employer.

3. Is a member entitled to any benefits under the Plan upon separation prior to retirement?

A member who is separated from his Participating Employer prior to retirement, due to resignation or for any reasons other than dismissal for cause attributable to the fault of the member, shall be entitled (a) to the return of his total contributions plus the income accrued thereon under the Trust Fund, if any, and (b) to a specified proportion of the total contribution of his Participating Employer in his favor plus the income credited thereto under the Trust Fund computed in accordance with his length of membership in the Plan, as follows:

Completed Years of
Continuous Service
Percentage Payable
Under the Trust Fund
Below 10 years (120 months) None
After 10 years (120 months) 50%
11 years (132 months) 55%
12 years (144 months) 60%
13 years (156 months) 65%
14 years (168 months) 70%
15 years (180 months) 75%
16 years (192 months) 80%
17 years (204 months) 85%
18 years (216 months) 90%
19 years (228 months) 95%
20 years or over (240 months) 100%

4. In case of separation prior to retirement, how is the member’s length of Membership in the Plan/tenure of service reckoned?

The tenure of service of a member shall be reckoned from actual date of hire with the Participating Employer. Leaves of absence without pay shall not be considered as an interruption of continuous service, but the period during which the member is on leave without pay shall not be considered as part of his years of service.

5. What is the procedure for the payment of retirement/separation benefits?

Application for the payment of retirement/separation benefits must be made in writing in the form and manner prescribed by the Commission (Application for Benefits – Form No. 9) and must be signed and filed by the member with the Retirement Office duly endorsed by the authorized signatory of his Participating Employer at least 30 days in advance of the date of actual retirement, separation or separation.

The Retirement Commission shall be the sole judge of the sufficiency of the information submitted, the application and the interpretation of the Plan and the entitlement to and the amount of the benefits. The decision of the Commission shall be final and binding upon all parties.

6. Is involuntary separation qualified as to the length of service and age of the official or employee?

No. Amounts received by reason of involuntary separation remains exempt from tax and is not qualified as to the length of service and age of the official or employee.

Thus, it is generally only those who voluntarily resign after 10 years of service who will be taxed on their separation benefits prior to retirement. Those who are separated due to sickness, redundancy or retrenchment to avoid serious business losses or the installation of labor-saving devices will still be entitled to tax exemption of their separation benefits under the Labor Code. Moreover, the member shall be entitled to 100% of the amount standing to his credit regardless of such member’s length of service, or the amount due him under the law, whichever is higher.

7. Am I entitled to separation benefits if I am involuntary separated from the employ of my Participating Employer?

In case of termination due to redundancy or introduction of labor-saving devices, the Labor Code requires payment of separation benefit of one (1) month basic pay per year of service, a fraction of at least 6 months shall be considered as one year, for purposes of computation. Therefore, even if the worker on regular employment has worked for only at least six (6) months but less than one (1) year, he is entitled to the separation pay of one (1) month basic pay because it is specifically provided that the barest minimum separation benefit is one month basic pay.

In case of retrenchment to prevent losses or closure or cessation of operation or underaking NOT due to serious business losses or financial reverses, a written notice to the employees and the Department of Labor one (1) month in advance is required. The payment of separation benefits of at least one-half (1/2) month pay for every year of service is required by law. A fraction of at least six (6) months shall be considered, for purposes of computation, as one year of service. Therefore, even if the regular worker has worked only for at least 6 months but less than one year, he will still receive the separation benefit of one month basic pay because the barest minimum separation benefit, in any instance, is one month basic pay.

8. How are benefits computed under the Plan?

The benefits payable under Sections 2, 3 and 6 of Article XI of the Plan shall be computed based on the total amount standing to the credit of the member in the books of the Trust Fund consisting of his own contributions, if any, and the contributions of his Participating Employer in his favor plus the income respectively credited thereto determined as of the last valuation date.

9. Is it required to follow the DOLE Implementing Rules on R.A. 7641 in computing retirement benefits?

In computing retirement benefits, it is required to follow the DOLE Implementing Rules on R.A. 7641, which interpreted the law to mean more or less 22.5 working days for every year of service. A covered employee who retires pursuant to this law 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.

The law is explicit that “one-half month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days service incentive leaves” unless the parties provide for broader inclusions. Evidently, the law expanded the concept of “one-half month salary” from the usual one-month salary divided by two.

9. Can you provide an illustrative example on how retirement benefits are computed under R.A. 7641

Juan dela Cruz, age 60 with 30 years of continuous service; latest salary of P 20,000 at time of retirement; equity with CEAP Retirement Fund (employer contribution plus income) P 200,000.00

Computation:

15 days salary 10,000.00

5 days service incentive leave

(P 20,000 x 12 divided by 314 = P 764.33/day)

(P 764.33 x 5 days = P 3,821.65 ) 3,821.65

1/12 of 13th month pay (1/12 x P 20,000) 1,666.67

Total 11,985.14

x 30 years

Retirement Benefit P 464,649.60

Less: CEAP Retirement Fund 200,000.00

Shortfall P 264,649.60

Note: As mandated by the New Retirement Law, the shortfall in retirement benefits will be shouldered by the Participating Employer. Denominator will depend on the accounting period of the school, i.e. 262, 314 or 365.

The Pag-Ibig employer share is no longer included in the computation of retirement benefits of the employee.

10. How are the benefits paid to a separating or retiring member?

The benefits payable to a member may either be paid to him or his beneficiaries directly in lump sum, through his Participating Employer.

11. What other benefits aside from separation/retirement benefits are payable under the Plan?

Other benefits payable under the Plan are as follows:

Death Benefit – In case of death of a member. 100% of the amount standing to his credit under the books of the Trust Fund plus the proceeds of his additional death benefit under the Plan shall be paid to his beneficiary or beneficiaries, or in their absence to the persons referred to in Section 2. Article V regardless of such member’s length of service with his Participating Employer. The Participating Employer should file with the Retirement Plan Office in behalf of the deceased member Application for Death Benefit – Form No. 11 and Attending Physician’s Statement – Form No. 11A respectively with supporting documents to expedite processing of same.

The additional death benefit is One Hundred Fifty Thousand Pesos (P 150,000.00), regardless of the salary of the deceased member. Participating Employers shall not have any arrears and should be current in its contributions to the Fund a month prior to the death of its employee to entitle the beneficiary or beneficiaries the additional death benefit of P 150,000.00. In the event that the Participating Employer is not current in its contributions, it will be given a grace period of three (3) months to update it for its covered employees. If after three (3) months the Participating Employer fails to do so, it will be obliged and required to pay the beneficiary or beneficiaries the additional death benefit of P 150,000.00.

Disability Benefit – A member who is separated from his Participating Employer for reason of permanent total incapacity or disability shall be entitled to 100% of the amount standing to his credit in the Trust Fund and an additional permanent total disability benefit of One Hundred Fifty Thousand Pesos (P 150,000.00). Participating Employers shall not have any arrears and should be current in its contributions to the Fund a month prior to the total disability of its employee to entitle the beneficiary or beneficiaries the additional total disability benefit of P 150,000.00. In the event that the Participating Employer is not current in its contributions, it will be given a grace period of three (3) months to update it for its covered employees. If after 3 months the Participating Employer fails to do so, it will be obliged and required to pay the beneficiary or beneficiaries the additional total disability benefit of P 150,000.00. The determination of permanent total incapacity or disability shall be made by the doctor to be designated by the Participating Employer, and his judgment shall be final.

Permanent total disability is any of the following:

  • A disability that lasts for more than the period prescribed for Temporary Total Disability and prevents an employee from pursuing his usual work and earning therefrom
  • Complete loss of sight of both eyes
  • Loss of two limbs at or above the ankles or wrists
  • Permanent complete paralysis of two limbs
  • Brain injury resulting in incurable imbecility or insanity
  • Such cases as determined by the Social Security System and approved by the Employees Compensation Commission.

12. Will a member who is dismissed by his Participating Employer for cause be entitled to any part of the Fund?

A member who is dismissed by his Participating Employer for cause attributable to his fault shall not be entitled to any part of the Fund except his own contributions with the particular income accrued thereon.

13. Are the contributions in favor of a separated or resigned member returned to the Participating Employer?

If a member separates or resigns from his Participating Employer with less than 10 years of continuous service, the amount standing to his credit shall be retained in the Trust Fund and such credit classified as forfeitures shall be used by the Participating Employer to reduce its subsequent contributions to the Fund.

Similarly, if a member separates or resigns from his Participating Employer with more than 10 years but less than 20 years of continuous service, the portion of the amount standing to the credit of the resigned or separated member which is not paid by virtue of the limitations of the vesting provisions of the Plan, classified as forfeitures, shall be used by the Participating Employer to reduce its subsequent contributions to the Fund.

14. Why does the Participating Employer have the first lien upon the amount standing to the credit of its Members?

The Participating Employer has the first lien upon the amount standing to the credit of its Members to cover all liabilities of the Member to the Participating Employer and all losses, costs and expenses which the Participating Employer may incur through his dishonesty, defalcation, theft or any other act.

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Termination of Participation

1. Can a Participating Employer withdraw its membership in the Plan?

For adverse factors beyond its control, a Participating Employer may withdraw at any time from its participation in the Plan by serving written notice and submission of a Board Resolution with the Retirement Commission of its intention to withdraw. The withdrawal shall become effective within fifteen (15) days after the acceptance thereof by the Retirement Commission.

Under no circumstances whatsoever shall such withdrawal permit the return to the Participating Employer of any portion of the contributions made by it to the Fund, nor allow any part of the assets of the Fund to be used for, or diverted to purposes other than the exclusive benefit of the members of the withdrawing Participating Employer or their beneficiaries.

2. In the case of voluntary withdrawal, do the contributions revert back to the Participating Employer?

No. After providing for any administrative expenses and other charges, the amounts standing to the credit of its employees who are members of the Plan shall be allocated and distributed among said members.

However, should the Participating Employer withdraw from the Plan with the intention of setting up its own retirement plan or segregating its own retirement fund, the amounts standing to the credit of its employees shall be transferred to its duly appointed Trustee.

3. Does the Retirement Plan impose sanctions on delinquent Participating Employers?

A Participating Employer who fails to make any three (3) contributions to the Fund as required by the Plan and the administrative procedures adopted by the Retirement Commission shall be subject to cancellation of its status as an active employer of the Plan. However, the Commission, may upon request and proper justification by the Participating Employer for its failure to contribute, grant a three (3) month grace period within which the Participating Employer shall be allowed to remit all the unpaid contributions due. The period is not subject to further extension and the failure to pay the amount due within the said period will automatically cancel the delinquent employer’s participation in the Plan. During the period of delinquency, the members who are employees of the delinquent employer shall, however, participate in the income of the Trust Fund.

4. What will become of the member’s voluntary contributions to the Fund who is no longer connected with his Participating Employer? What about the employer contributions?

A member who has contributed voluntarily to the Fund and is still included in the members’ masterlist but is no longer connected with his Participating Employer will have his personal equity donated to the CEAP scholarship fund if he can no longer be contacted at his last known address and there is no activity in his account for a period of 10 years from his last transaction date. In the case of employer contributions, it will be governed by Section 9, Article XI of the Plan.

5. Can a delinquent Participating Employer reactivate its participation in the Plan at a later date?

Should the delinquent Participating Employer later on decide to reactivate its participation in the Plan, the former should accelerate all past contributions payable equivalent to five percent (5%) of the members’ salary. The past service contributions will be paid to the Retirement Fund for the credit of the concerned members either in lump sum or in equal monthly installments over a period of ten (10) years.

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Amendment and Termination of the Plan

1. Who has the authority to amend or modify the CEAP Retirement Plan?

The Retirement Commission may amend or modify the CEAP Retirement Plan at any time by a resolution approved by at least two-thirds (2/3) vote of the members of the Commission, subject to the approval of the CEAP National Board. Any amendment shall immediately be communicated to each member through his Participating Employer. However, nothing in this present Plan nor in any subsequent amendments to be made therein shall be construed as providing or intending to provide for the return to the Participating Employers of any portion of the contributions made by them to the Fund, nor operate to permit any part of the assets of the Fund to be used for or diverted to purposes other than the exclusive benefit of the members and their beneficiaries.

2. Who has the authority to terminate the CEAP Retirement Plan?

Although the Catholic Educational Association of the Philippines intends to continue the Fund indefinitely, the Plan may be terminated at any time by a resolution approved by at least two-thirds (2/3) of the directors of the CEAP National Board as recommended by a majority of the members of the Retirement Commission and confirmed by the majority of the Participating Employers.

Miscellaneous Provisions

1. Does a member have any claim on the amounts standing to his credit in the Plan?

No member of the Plan shall have any claim upon the amounts standing to his credit in the Plan other than in accordance with the rules of the Plan. Specifically, he shall have no right of alienation or assignment of any sum standing to his credit, nor shall it be liable for or subject to any obligation or liability of such member except as otherwise provided by law or this Plan.

If a member alienates, assigns, cedes, pledges or charges the whole part of his interests under the Plan or any part thereof without written consent of the Participating Employer, or if any member shall be adjudged insolvent by a competent court, he shall forfeit all his rights and interests under the Plan.

2. What are the rights of Members in the Plan?

Except as specifically provided in the CEAP Retirement Plan, no person, other than the Trustee of the Fund, shall have any right, title, or interest in any of the income or property of any character received or held by it for the account of the Fund, and no person shall have any vested right in any income or property in the Fund.

Moreover, nothing herein contained shall be deemed to give any Member the right to be retained in the service of the Participating Employer or to interfere with the right of the Participating Employer to discharge such Member at any time, nor shall it give the Participating Employer the right to require a Member to remain in its service, nor shall it interfere with the Member’s right to terminate his service at any time.

 
 

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