SOP Exhibits

Title:

Illustration of How the Retirement Benefit is Computed

SOP Number : HR-PB36

ANNEX C

The following is an illustration of how the retirement benefit is computed:

A member, aged 60, is retiring with a total of thirty-five (35) years service. He served for a continuous period of 33 years and went on leave without pay for about one year. He then reported back for another 2 years. Shown below is the schedule of compensation he received for his last 5 years of service, how much will he receive:

DATE	NUMBER OF MONTHS	MONTHLY COMPENSATION RECEIVED
January 1, 1992 to August 31, 1992	8	P 8,500.00
September 1, 1992 to December 31, 1993	16	P 9,500.00
January 1, 1994 to June 30, 1994	6	P 10,500.00
July 1994 to June 30, 1995	12	on leave without pay
July 1, 1995 to December 1995	6	P 10,500.00
January 1, 1996 to December 1996	12	P 12,500.00
January 1, 1997 to June 30, 1997	6	P 15,000.00

• w Computation of the Average Monthly Compensation (AMC):

Total compensation received during
the last thirty-six (36) months of service preceding
separation/retirement/disability death
A M C = ----------------------------------------------------------------
thirty-six (36)

= [(6 x P9,500.00) + (12 x P10,500.00) + (12 x P12,500.00) +
(6 x P15,000.00)]/36, not to exceed P10,000.00
= P423,000.00/36, not to exceed P10,000.00
= P11,750.00, not to exceed P10,000.00
= P10,000.00

w Computation of the Revalued Average Monthly Compensation (RAMC):

RAMC = 170% * AMC, if the AMC is P1,000 or less; or
= AMC + P700.00, if the AMC is more than P1,000.00
= P10,000.00 + P700.00 = P10,700.00

w Computation of the Basic Monthly Pension (BMP):

BMP = 37.5% x RAMC, if the total service is fifteen (15) years or less; or
= 37.5% x RAMC + 2.5% x RAMC x (YOS - 15), if the total service
is more than fifteen (15) years.
But the BMP shall not exceed ninety-percent (90%) of the AMC

BMP = [.375 x P10,700.00] + [.025 x (35-15) x P10,700.00], not to
exceed 90% of AMC or P9,000.00;
= P9,362.50 not to exceed P9,000.00
= P9,000.00

• Computation of the Lump Sum (Retirement Option 1):

Lump Sum = 60 x BMP
= 60 x P9,000.00
= P540,000.00 to be paid at retirement (at age 60) and he will
receive the P9,000.00 BMP for life after 5 years, or, in this
case, at age 65.

OR

• Computation of the Cash Payment (Retirement Option 2):

Cash Payment = 18 x BMP
= 18 x P9,000.00
= P162,000.00 to be paid at retirement (at age 60) and
he will receive the P9,000.00 BMP for life immediately