Law Summary
Eligibility Conditions for Exemption
- The retiring official or employee must have served the same employer for at least ten (10) years.
- The official or employee must be at least fifty (50) years old at the time of retirement.
- The retirement benefits exemption may only be availed of once by an official or employee.
Coverage for Separation Due to Unforeseen Circumstances
- In cases of separation due to death, sickness, physical disability, or causes beyond the employee's control,
- Any amount received by the employee or his heirs as a result of separation will enjoy the same exemption from taxation and legal processes.
Definition of Reasonable Private Benefit Plan
- A plan such as pension, gratuity, stock bonus, or profit-sharing maintained by the employer for officials and employees.
- Contributions can be made by the employer, employees, or both.
- The fund accumulated is for distributing earnings and principal exclusively to the officials and employees.
- The corpus or income of the fund shall never be used or diverted for purposes other than the exclusive benefit of these officials and employees.
Effective Date
- The law takes effect immediately upon its approval on June 17, 1967.