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Employee Benefit / Retirement Fund Management

One way to keep valuable personnel is to secure their future via retirement benefits. Let BDO Trust and Investments Group help you set up and manage your company's retirement funds to benefit your company and your employees through our Employee Benefit Plan under a Trust or an Investment Management Arrangement. BDO Trust will recommend an investment program designed and managed with the objective of maximizing the earnings of the retirement fund. We will also provide a systematic payment of benefits to employees upon their retirement or separation from your company. 

Under this arrangement, an Employees' Retirement Plan (the "Plan") is established by the employer for the retirement and separation benefits of the employees from which Plan, a Retirement Trust Fund (RTF) is created out of contributions from the employer (as mandated under RA 7641 and RA 8424) and/or employees (optional).

Client Suitability

Retirement fund services are for companies needing assistance in setting up a retirement plan for their employees. Other firms that already have existing retirement funds but have no time or expertise to manage such fund may also secure the services of a trustee. Or your company may be one of those that have a substantial amount of retirement fund that you would want more than one (1) trust institution to administer and invest your fund.

Product Features

Minimum Amount:    PhP 1,000,000.00 

Status:                    Tax-exempt fund if supported with a Bureau of Internal Revenue (BIR) Tax Exemption Certificate  

Types of Retirement Funds

Pension/Gratuity Plan  (Non-contributory/Defined Benefits) Provident Plan (Contributory/Defined Contribution)
The cost or contributions needed to maintain the fund level is solely shouldered by the employer. The required contributions are determined by an Actuary. The employees are allowed to participate in the contributions to the retirement fund. Under this arrangement, an individual ledger is maintained for each employee that records the total individual contributions made and the net earnings that will be returned to the employee upon separation from the employer.

 

Types of arrangement

Trusteed Agency (Investment Management Agreement)
A Trust arrangement whereby an employer appoints a trust institution like BDO Trust primarily to administer the retirement plan of the Company and to manage the retirement fund.  A Trust arrangement whereby an employer appoints a trust institution like BDO Trust primarily to administer the retirement plan of the Company and to manage the retirement fund. 

 

As your trustee/fund manager, BDO Trust provides the following services:

  • Retirement Plan Design
  • Formulation of the plan type that best suits your needs and financial capability and whose features qualify it for tax privileges
  • Investment Portfolio Design
  • Design of investment program and strategy based on the retirement plan objectives
  • Investment Management and Administration
  • Management, administration, and periodic review of investment portfolio to ensure growth and acceptable return on investment
  • Payment of benefits of retiring employees as planned
  • Accounting and Reporting
  • Creation, maintenance and update of accounting records of the retirement fund
  • Rendition of financial statements and other related reports on a quarterly basis
  • Custodian and Other Services
  • Custody of income collections, sales proceeds, and redemptions to ensure safety funds assets
  • Rendition and submission of requisite reports to the Bangko Sentral ng Pilipinas and the Bureau of Internal Revenue

Benefits to Clients

  • Having a plan allows the employer to spread over a number of years the cost of future benefit payments.
  • The employer can maximize the growth potential of its retirement trust fund mainly attributable to the tax shield benefits granted to a qualified retirement plan as well as to the professional investment management provided by the trustee.  
  • The company will have the liquidity to provide financial assistance to its employees in the event of the separation and retirement of employees. 
  • The employer satisfies the minimum retirement benefit prescribed under Republic Act 7641. 
  • Having a plan builds up good image for the company and develops employee morale. 
  • Maintaining a Plan means tax savings.
  1. For the Employer - contribution to the Retirement Fund is a valid business expense
  2. For the Employee - The retirement benefit is exempt from withholding tax
  3. For the Retirement Fund - The earnings of the investments are tax-exempt.
  1. Account Opening Forms
    • Customer Account Record – Trust 
    • Investor Profile Questionnaire (IPQ)
    • Client Investment Suitability (CIS)
    • Risk Disclosure Statement (RDS)
  2. In case the arrangement is under Trust, Trust Agreement; If the arrangement is under an Agency, Investment Management Agreement (with the Trust Agreement between the Company and the  Retirement Plan Board of Trustees annexed)
  3. Investment Instruction Letter
  4. Supplemental Agreement (if any)
  5. BIR Tax-exemption Certificate
  6. Standard account opening requirements and procedures
    • Photocopy of 2 valid IDs
    • 2 Sets of Signature cards
    • For corporations and institutions:
      • Secretary’s Certificate of the Board Resolution on the following: Appointment of BDO as Trustee/Investment Manager and Appointment of Authorized Signatories of the Trust/IMA Account
      • Photocopy of Articles of Incorporation and By-Laws

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