FAQs
  • 6. What are the important things that company management needs to know to decide whether or not to approve your proposed program? A concise list.Read More
  • 5. How significant is employee turnover in the retirement cost calculation?Assuming no pre-normal retirement turnover is most likely excessively conservative and is not allowed under PAS 19.Read More
  • 4. Is an enterprise without a retirement program required to accrue retirement cost under PAS19? If so, when should it start?Enterprises covered by R.A. 7641, practically, has a defined benefit plan (the benefits of which are as defined by the law) and therefore, should accrue retirement costs as required by PAS 19.Read More
  • 3. What are the requirements for tax-qualification?The plan must be reasonable and must be submitted to the BIR. Read More
  • 2. What are the incentives given to tax-qualified plans?There are three incentives given to tax-qualified plans. Read More
  • 1. What is the minimum retirement benefit mandated by law?Republic Act 7641 mandates that an employee upon reaching the age of sixty (60) years or more and 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.Read More
FAQs 

6. What are the important things that company management needs to know to decide whether or not to approve your proposed program?

 

Below is a concise list. A corresponding presentation is also provided. (Hover mouse to the bottom right of the slide show for the control buttons to appear; you may then go forward or go back.)

 

 

 

  • R.A. 7641 and its interpretation (Slides 3 and 4)
  • Tax qualification incentives under R.A. 4917 (Slide 5)
  • General / Specific objectives for setting up a retirement program (Slide 7)
  • Proposed program: benefits, eligibility requirements and their rationale (Slides 8 - 11)
  • Long-term cost of the proposed plan as a fixed percentage of payroll compared to the cost of providing R.A. 7641 mandated benefits; assumptions used in the calculation and sensitivity of the costs to changes in assumptions (Slide 13)
  • Immediate cost impact of the proposed program under the applicable accounting standard (PAS 19 or PFRS for SMEs) and the assumptions used (Slide 14)
  • Projection of expected benefit payments (Slide 15)
  • Funding recommendations (Slide 16)
  • The advantages of setting the program now (Slide 17)