SOP Exhibits

Title:

Illustration of How the Separation Benefit is Computed

SOP Number : HR-PB36

ANNEX D

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

Two members, Mr. Cruz and Ms. Reyes, have resigned at an age below 60 years. Mr. Cruz has accumulated seven years of service while Ms. Reyes has a total of twenty (20) years service. Shown below is the schedule of compensation they received for their last 5 years of service (assuming data on salary is the same), and how much will they 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

• 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

Mr. Cruz and Ms. Reyes have the same AMC = P10,000.00

• 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

• Computation of Mr. Cruz’ separation benefit:

Since Mr. Cruz has rendered only seven (7) years of service (YOS), he is entitled to the:

Cash Payment = 100% x AMC x YOS to pay to him at age 60
= 100% x (P10,000.00) x (7 years)
= P 70,000.00
• Computation of Ms. Reyes’ separation benefit:

Since Ms. Reyes has rendered twenty (20) years of service (YOS), he is entitled to the following:

1. Cash Payment = 18 x Basic Monthly Pension (BMP) at time of separation and

2. Basic Monthly Pension (BMP) for life to start at age 60:

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 P10,000.00] + [.025 x (20 - 15) x P10,000.00], not to exceed 90% of AMC or P9,000.00;
= P5,400.00 not to exceed P9,000.00
= P5,400.00

Cash Payment = 18 x P5,400.00
= P97,200.00

Therefore, Ms. Reyes will receive P97,200.00 at time of separation and P5,400.00 monthly for life starting at age 60.