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A Retirement Plan in the Philippines refers to a financial arrangement that individuals make to secure their financial well-being after they cease working or retire from their active employment. Retirement plans are designed to help individuals save and invest money during their working years so that they have a stable source of income during their retirement years when they are no longer earning a regular salary.

Retirement Pay Law

An act amending article 287 of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines, by providing for retirement pay to qualified private sector employees in the absence of any retirement plan in the establishment. RETIREMENT PAY IS MANDATORY!

Here are some key components and features of Retirement Plans in the Philippines:


Individuals contribute money regularly to their retirement plan account during their working years. These contributions can be made by the individual, the employer, or both.

Tax Advantages

Retirement plans in the Philippines often come with tax benefits. Contributions to certain retirement plans may be tax-deductible, reducing the individual’s taxable income. Additionally, some plans offer tax-deferred growth, where earnings on investments within the plan are not taxed until they are withdrawn during retirement.

Investment Options

Retirement plans typically involve investing contributions in various financial instruments such as stocks, bonds, mutual funds, and other assets. The goal is to accumulate wealth over time to support retirement needs.


Vesting refers to the ownership of contributions and earnings in the retirement plan. Depending on the plan’s rules, individuals may become fully vested in their contributions and earnings after a certain period of time.

Retirement Age

Retirement plans have a specified age at which individuals can start accessing the funds they’ve accumulated. In the Philippines, the mandatory retirement age is generally 65, although this can vary depending on the specific plan and employment arrangement.

Employer-Sponsored Plans

Many employers in the Philippines offer retirement plans as part of their employee benefits package. These plans may include contributions from both the employer and the employee.

Retirement plans play a crucial role in ensuring financial stability and a comfortable retirement for individuals. It’s important to carefully consider the different types of retirement plans available, their features, fees, and potential returns before selecting the one that best aligns with your retirement goals and financial situation.

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