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 provided that they become 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 Fnd is exempt from tax; and
   • The retirement benefit payments from the Fund of the qualified and retired members are exempted from tax.

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 CEAP-RB 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 percentum (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 met the requirements for membership in the Plan to the date of acceptance of the Participating Employer in the Plan.

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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 twenty (20) years of continuous service or if the last day of his 20th year of service falls outside of a semester, on the said last day itself.s

   For other members, the early retirement date, with the consent of the Participating Employer, may be the last day the member has completed twenty (20) 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.

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. WWhat 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.
   

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, a fraction of at least six (6) months being considered as one (1) whole year, 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 (CEAP-RB Form No. 9) and manner prescribed by the Commission and must be 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. 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.

8. Is it still required to follow the DOLE Implementing Rules on R.A. 7641 in Computing retirement benefits?

   In computing retirement benefits, it is no longer 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. The National Labor Relations Commission, in 2 resolutions issued last August 29, 1996 in Alita v. Dominican School NLRC NCR CA No. 009555-95 and last August 30, 2002 in Lavandera v. Grace Christian High School NLRC NCR CA No. 031379-02, clarified that the lump sum retirement pay under R.A. 7641 is still one-half-month for every year of service, the half-month consisting of (a) the salary for fifteen (15) calendar days (not working days), (b) one-twelfth (1/12) of the cash equivalent of the five (5) days service incentive leave, and (c) one-twelfth (1/12) of the 13th month pay.

9. 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.

10. What other benefits aside from separation/retirement benefits are payable under the Plan?
    • 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 CEAP-RB Form Nos. 11 and 11A – Application for Death Benefit and Attending Physician’s Statement, 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.
11. 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.

12. 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.
    

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. 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.
   

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.