ARTICLE I
Object, Name and Effective Date
Section 1.
Object
The Plan is a statement of the policy of ABC COMPANY on the retirement of its
employees, the provisions of which are embodied in this Retirement Plan document
stating all the terms and conditions whereby each employee-participant shall receive a
lump sum retirement benefit.
Section 2.
Name
This Plan shall be known as the Employees Retirement Plan of ABC COMPANY
Section 3.
Effective Date
The Plan shall become effective on________________________, hereinafter referred to as
the "Effective Date".
ARTICLE II
Definitions
Section 1.
The following words and phrases, as used herein, shall have the meaning indicated, unless a
different meaning is plainly required by the text:
a)
b)
c)
d)
e)
f)
g)
"Plan Salary" means the final basic monthly salary but excluding any commissions,
overtime pay, bonuses or other extra compensation.
h)
"Retiree" means a Participant who has retired, in accordance with the provisions of
the Plan.
-2i)
"Trustee" means the Trustee at any time holding the assets of the retirement fund,
in accordance with the provisions of Article VII, Section 1.
j)
k)
"Continuous Service" means an interrupted service with the Company from date of
hire.
If the employee has incurred a break in service, credited service shall be the most
recent unbroken period of employment measured from the date of re-hire only. A
break in credited service shall be deemed to have occurred whenever an employee
voluntarily resigns, is discharged by the Company, ceases to be an employee for
any cause whatsoever or when he fails to return to the service of the Company after
an approved leave of absence.
For purposes of the benefit calculation, a fraction of at least six (6) months in
a
calendar year shall be considered as one whole year of credited service. A fraction
of less than six (6) months shall be considered in its exact proportion to one
calendar year.
l)
The masculine pronoun, whenever used herein, shall include the feminine gender
and the singular number, whenever used herein, shall include the plural, unless the
context clearly indicates a different meaning.
ARTICLE III
Eligibility for Participation
Section 1.
Section 2.
ARTICLE IV
Eligibility for Retirement and Benefits
Section 1.
Normal Retirement
Any Participant on the first day of the month coincident with or next following his
attainment of age sixty (60) and upon completion of at least five (5) years of faithful and
continuous service with the Company shall be retired and he shall be entitled to a full
normal retirement benefit, as described in Section 2 of this Article.
-3Section 2.
Section 3.
Section 4.
Section 5.
Resignation Benefit
A Participant who voluntarily resigns from the Company with at least five (5) years of
qualifying service shall be entitled to a lump sum benefit, to be computed with credit
service up to the date of resignation. The benefit shall be further adjusted according to the
following schedule:
COMPLETED NUMBER
OF YEARS OF SERVICE
Less than 5 years
5 but less than 10
10 but less than 15
15 but less than 20
20 and above
Section 6.
SEPARATION BENEFIT AS % OF
SALARY
None
25%
50%
75%
100%
Involuntary Separation
A Participant who is terminated beyond his control due to the installation of labor-saving
devices, redundancy, or a retrenchment program initiated by the employer as a result of
merger; or to prevent losses or other similar causes, or where the Employee suffers from a
disease and his continued employment is prohibited by law or is prejudicial to his health or
to the health of his co-employee, the Employee concerned shall be entitled to applicable
benefit under Normal Retirement Benefit, or the New Labor Code, or existing Collective
Bargaining Agreement (CBA), if there is any, or similar legislation, whichever is the
greatest. A Participant who is terminated for cause shall not be entitled to benefits under
this Plan.
Section 7.
Death Benefit
In the event of death of the Participant while in the active service of the Company, his
beneficiaries shall receive a death benefit, as in normal retirement benefit, but such benefit
shall be computed with credited service up to the date of his death only.
-4-
Section 8.
Section 9.
No Other Benefits
No retirement benefits other than those previously provided in this Article shall be payable
under the Plan.
Section 10.
Forfeiture of Benefits
A Participant who is dismissed for cause by the Company shall forfeit all his rights and
privileges under this Article. Benefits may also be denied by the Company if, in its opinion,
any Participant has committed acts that are inimical or prejudicial to the interests of the
Company.
Section 11.
Section 12.
Employees' Contributions
The Company shall bear the full cost of providing the benefits from the Plan. No
contribution is to come from the Employees.
ARTICLE V
Nomination of Beneficiaries
Section 1.
Nomination
Any Participant shall, upon joining the Plan, forthwith nominate in writing, in such forms
as shall be prescribed by the Retirement Committee, a person or persons to receive the
amount which may be due him in case of his death from among those enumerated
hereunder in the order specified.
a)
b)
c)
d)
The nomination must be made and executed in accordance with existing laws. Every
nomination or appointment shall remain in force until the death of the nominee or appointee
or until revoked or amended by the Participant himself by delivering to the Retirement
Committee another nomination or appointment in the prescribed form. In the event of death
-5of a nominee or appointee, during the life of the Participant, the latter shall nominate or
appoint another person or persons in his stead and submit the nomination to the Retirement
Committee in the prescribed form.
Section 2.
Failure to Nominate
If at the death of a Participant 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 the first of the following classes then surviving:
a)
b)
c)
d)
Section 3.
ARTICLE VI
Contributions
Section 1.
Company Contributions
a)
Beginning with the Effective Date of the Plan, the Company shall contribute to
the Fund such amounts as shall be required under an actuarial study made by an
Actuarial Advisor.
b)
The Company shall not be liable to any person for failure on its part to make
contributions, as provided for in this Section, nor shall any right of action accrue to
compel the Company to make such contribution.
c)
While the Company intends to continue the Plan and to make such contributions to
the Fund from time to time, as shall be required under accepted actuarial principles,
to maintain the Plan in a sound condition, the Company reserves the right to
-6discontinue, suspend or change the rate and amount of its contributions to the Fund
at any time, as a result of financial reasons beyond the control of the Company.
Section 2
ARTICLE VII
Financing
Section 1.
The Fund
The funding of the Plan and payment of the benefits hereunder shall be provided for
through the medium of a Fund held by the Trustee under an appropriate Trust Agreement.
The contributions of the Company to the Fund so created, together with the gains and
losses, realized and unrealized, less expenses, shall constitute the Retirement Fund.
Section 2.
Section 3.
No Participant or Retiree shall have any right, title or interest to any part of the
assets of the Fund, except as and to the extent expressly provided for in the Plan.
b)
Any Participant or Retiree having a right or claim under the Plan shall look solely
to the assets of the Fund. In no event shall the Company or its officers, directors or
stockholders be liable jointly or severally, to any person whomsoever on account of
any claim arising by reason of the provisions thereof.
Irrevocability
The Company shall have no right, title or interest in the contributions made by it to the
Trustee and no part of the Fund shall accrue to the Company except after satisfaction of all
liabilities of the Plan.
ARTICLE VIII
Effect of Social Legislation
Section 1.
Section 2.
-7the law or the lawful order of competent authority requires the Company to give and the
benefits herein provided but shall be entitled to the greatest benefit. Payment of the benefits
under this Plan shall be in lieu of all other benefits under the New Labor Code or similar
legislation, if such benefits are greater than the latter; otherwise, the benefits under this Plan
shall form part of the benefits stipulated under such legislation.
ARTICLE IX
Administration
Section 1.
General Administration
The Company shall be responsible for the general administration of the Plan and for
carrying out the provisions thereof.
Section 2.
Retirement Committee
a)
The Company may appoint a Retirement Committee consisting of not less than
three (3) persons. In the event that a member is absent from a meeting of the
Committee, his alternate may attend and when in attendance, shall exercise the
duties of the member. The Committee may appoint a member or alternate to fill in
any vacancy.
b)
The Retirement Committee shall meet for the transaction of business, at such time
as may be mutually agreed upon by its members.
c)
To carry out rules and procedures, as set forth in this Plan, to be followed
by Participants in filing applications for benefits and for furnishing proofs
necessary to establish their age and continuous credited service, in
accordance with the rule of eligibility for benefits under this Plan.
2)
To find facts and determine the rights of any Participant applying for
retirement benefits and to afford any applicant or the Company dissatisfied
with any finding or fact determination, the right to a hearing.
3)
To apply the procedures set forth in the Plan for establishing and verifying
the credited service of the Participant and after affording the Participant
and the Company an opportunity to object, to determine the credited
service of Participant at or before retirement.
4)
5)
d)
The expenses of the Retirement Committee shall be paid from the Fund.
e)
The Company shall furnish to the Retirement Committee, when requested, such
information as to age, sex and service of the Participant covered under this Plan, as
-8the Retirement Committee may reasonably request, but in no event shall the
Company be required to furnish the Retirement Committee with data not furnished
by it to the Actuarial Advisor chosen by it to make initial and periodic valuations
of the liabilities of the Plan.
Section 3.
ARTICLE X
Amendment and Termination
Section 1.
Section 2.
A sum sufficient to provide for payment in full of late and normal retirement
benefits due to Participants who have attained normal retirement age, or to
beneficiaries of those who died; and benefits to those who are totally and
permanently disabled who were not yet paid, on a pro-rata basis, if the trust fund is
not sufficient.
b)
If there is a balance left after paying those in (a), a sum sufficient to provide for
payment in full of any early retirement benefits due to Participants, on a pro-rata
basis, if the amount is not sufficient.
c)
If there is a balance left after paying those in (a) and (b), a sum sufficient to provide
for payment to Participants equivalent to the present value of their accrued
benefits, on a pro-rata basis, if the amount is not sufficient.
d)
If there is a balance left after paying those in (a), (b) and (c), the amount shall
revert to the Company.
-9ARTICLE XI
Miscellaneous
Section 1.
Non-Transferability of Benefits
Neither the Company nor the Plan shall, in any manner, be liable for or be subject to the
payment of any debt or liability of any Participant or his beneficiaries. No benefit payable
at any time under the Plan shall be subject to alienation, sale, transfer, assessment, pledge,
attachment or encumbrance of any kind.
Section 2.
Applicable Laws
The Laws of the Republic of the Philippines shall govern in resolving any questions under
the Plan.
Section 3.
Section 4.
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