Guidelines for implementing RA 7641

Retirement pay is at least one-half (1/2) month salary for every year of service.
A fraction of at least six (6) months service counts as one whole year.
One-half month salary includes 15 days salary + 1/12 of the 13th month pay + cash equivalent of up to 5 days service incentive leave unless otherwise agreed.
Service before January 7, 1993 (law’s effectivity date) counts in computing length of service.

In absence of company-specific agreements or policies, RA 7641 benefits apply.
Existing agreements or policies providing equal or better retirement benefits take precedence.
Employers may use PAG-IBIG Fund coverage as a substitute retirement plan if it meets or exceeds RA 7641 benefits and does not violate collective bargaining agreements.
If PAG-IBIG benefits are less, the employer must pay the difference.
Only employer contributions to PAG-IBIG Fund count toward compliance with RA 7641; employee-only contributions do not.
Employers exempted from PAG-IBIG coverage must still provide retirement benefits under RA 7641.

The guidelines were issued by Secretary Leonardo A. Quisumbing on October 24, 1996.