Section 1. Section 2. Section 1. EXECUTION COPY Page 1 of 29 Educational Association of the Phili Retirement Plan Article I Creation and Effectivity Title This Plan shall be known as the “Catholic Educational Association of the Philippines (CEAP) Retirement Plan.” Date of Efiectivity This Plan became effective on July I, 1968. Amendments to this Plan were effected on January 26, 1989, October 1, 1989, September 1, 1992, June 1, 1993, and January 21, 1999, which amendments were approved by the Bureau of Internal Revenue (BIR). Article IT Definitions Definitions The following words and phrases, as used herein, shall have the meaning indicated, unless a different meaning is plainly required by the text: (@) “Continuous Service” shall mean the uninterrupted service as determined by the Participating Employer’s personnel records. Leaves of absence approved by the Participating Employer, with or without pay, and school vacations shall not constitute an interruption of service, but only periods of compensated service shall be used in computing benefits under this Plan. (>) “Fund” shall mean the CEAP Retirement Fund, the trust fund established under this Plan, and shall mean generally the monies or other things of value which comprise the corpus of the trust fund together with all income, capital gains, and other additions thereto, less any losses, charges, expenses, and benefit payment therefrom. (©) “Fund Administrator” shall_mean either the duly appointed Retirement Plan Office Director or an independent business process outsourcing provider tasked with the backroom operations and administration or record-keeping services of the Fund and the Supplemental Fund.@ ©) wo @) (h) @ oO &) EXECUTION COPY Page 2 of 29 “Future Service” shall mean periods of covered employment on or after July 1, 1968 or continuous service of a Member after the acceptance of the Participating Employer in this Plan for which contributions are paid in accordance with Article VI, Section 2 hereof. “Investment Committee” shall mean the committee which shall ‘oversee the Fund’s and the Supplemental Fund’s investment, credit, markets, and liquidity concerns as well as recommend the appointment of the Trustee(s) or Investment Manager(s), and such committee shall have the composition, powers, and authority under Article VII, Section 3 hereof. “Investment Manager” shall mean a bank or other financial institution so named in an Investment Management Agreement, including any of its successors, appointed by the Retirement Commission upon recommendation by the Investment Com in accordance with Article VII, Section 3 hereof. “Member” shall mean any employee of a Participating Employer (whether regular, probationary, or otherwise) who has qualified for membership in this Plan as determined solely by the Participating Employer, and transmitted in writing to the Retirement Plan Office in accordance with Article IV, Section I hereof. “National Board” shall mean the CEAP National Board of Trustees which shall have the overall management of affairs of CEAP, including this Plan “Nomination and Selection Committee” shall mean the committee which shall review and evaluate the qualifications of all persons nominated to be members of the Retirement Commission, and such committee shall have the composition, péwers, and authorities under Article VII, Section 2 hereof. “Non-Participating Employer” shall mean the school, college, university, congregation, order or diocese whose employees are already covered or enrolled in a retirement plan administered either by the Non-Participating Employer itself or by another entity, and which has agreed to make contributions solely to the Supplemental Fund in accordance with Article VI, Section 6 hereof, “Past Service” shall mean the continuous service of a Member to the Participating Employer from the date the Member became qualified under this Plan as indicated in the written instructions ofo (m) @) ©) @) @ © EXECUTION COPY Page 3 of 29 the Participating Employer to the date of acceptance of the Participating Employer in this Plan, “Participating Employer” shall mean the school, college, university, congregetion, order ot diocese which otiginally Participated in the creation of, or is subsequently accepted to participate, in this Plan by the Retirement Commission in accordance with Article II hereof and which agrees to make contributions to the Fund in accordance with this Plan. “Plan” shall mean the CEAP Retirement Plan adopted herein together with any amendments or interpretations thereof duly adopted by the Retirement Commission. “Risk, Compliance and Audit Committee” shall mean the committee which shall oversee the assessment of risks, existing processes and procedures and review of internal controls in this Plan, and such committee shall have the composition, powers, and authority under Article VII, Section 4 hereof. ctirement Commission” shall mean the body created by the National Board with powers and authority to administer this Plan in accordance with Article VII, Section 1 hereof. “Salary” shall mean the current basic salary or wage paid to the Member but excludes bonuses, overtime pay, allowance and other special emoluments, “Supplemental Fund” shall mean the supplemental trust fund established under this Plan, comprising of: (i) additional contributions, in monies or other things of value, made by the Participating Employers in addition to and apart from its ‘contributions to the Fund, which supplemental trust fund shall be utilized for the sole purpose of payment of any deficits or shortfalls in the retirement benefits of any Member who is an employee of such Participating Employer; and (ii) contributions, in monies or other things of value, made by Non-Participating Employers in order to supplement existing retirement plans administered either by such Non-Participating Employer or another entity, which supplemental trust fund shall be utilized for the sole purpose of payment of the retirement benefits of the employees of the Non- Participating Employer. “Trustee” shall mean a bank or other financial institution so named in the Trust Agreement, including any of its successors, appointed by the Retirement Commission upon recommendation by theSection 2. Seetion 1 Section 2. Section 3. EXECUTION COPY Page 4 of 29 Investment Committee in accordance with Article VII, Section 3 hereof. Interpretation (2) Unless the context requires otherwise, words importing a gender include every gender and words importing the singular include the plural and vice versa. (b) The headings of this Plan are for convenience only and shall not affect the interpretation of this Plan, (©) Reference to “writing” or cognate expressions includes a reference to telex, cable, electronic mail, facsimile transmission or comparable means of communications, (@) Reference to a “Participating Employer” and “Non-Participating Employer” includes a reference to its successors-in-interest and assigns. Article IIT Participation in the Fund General The Fund is established to provide retirement and other benefits for the qualified employees of (a) CEAP member schools, the CEAP National Secretariat, and Retirement Plan Office, and (b) other Catholic institutions which shall have been subsequently accepted by the Retirement ‘Commission and accredited by CEAP. Original Participants ‘The Original Participants are the employers which’originally participated in the establishment of this Plan or are signatories to the original Plan which took effect on July 1, 1968, The Original Participants are automatically considered as Participating Employers in this Plan, The list of Original Participants is filed with the Retirement Plan Office of the CEAP. Acceptance of New Participating Employers Any Catholic school or institution may be accepted as a Participating Employer by the Retirement Commission if in its opinion: (i) sufficient proof exists to show that the applicant intends and has the capacity, financial and otherwise, to continue its participation in this PlanSection 4. Section 5, Seetion L EXECUTION COPY Page 5 of 29 indefinitely, and (i) that the applicant’s acceptance as Participating Employer shall not prejudice the tax exemption of this Plan, The Retirement Commission may aecept such applicant upon submission of a duly accomplished application and upon signing of a pledge to the effect that it shall pay the contributions required by this Plan for all of its employees who shall become Members of this Plan in accordance with Article IV hereof, provided that the applicant shall become CEAP- accredited within twelve (12) months from the date of acceptance in this Plan, However, in its acceptance of a Participating Employer, the Retirement Commission, the National Board, or any of its members shall not be liable for the Participating Employer's non-compliance with, or for any violation of, the rules of this Plan and any amendments or interpretations thereof, including supplementary rules, duly issued by the Retirement Commission. A Catholic school or institution whose employees are already covered or enrolled in a retirement plan administered by another entity, whether a Juridical entity or a trust, may be accepted as a Participating Employer uupon the fulfillment of the requirements stated in the first paragraph of this section. The supplemental nature of this Plan over another retirement plan shall not exempt the Participating Employer and Member from the igations, benefits and conditions provided in this Plan insofar as these may be applicable to said Participating Employer and Member. Notice of Acceptance A written notice of acceptance shall be sent by the Retirement Commission to a new employer who is accepted for participation and, until such written notice is sent, no employer shall be deemed a Participating Employer in this Plan, Termination of Participation The termination of an employer's status as a Participating Employer shall bbe governed by the provisions of Article XIII hereof. Article IV Membership Membership All employees of the Participating Employer who are below the age of sixty (60) are eligible for acceptance as 2 Member in this Plan. The foregoing notwithstanding, Participating Employers who participate in thisEXECUTION COPY Page 6 of 29 Plan, whether as its sole retirement plan or as 2 supplement to an existing retirement plan, shall have the sole discretion to determine who among its employees are entitled to the benefits provided under this Plan. Thus, membership in this Plan shall be in accordance with the written instructions of the Participating Employer to the Retirement Plan Office, which written instruction shall state the names, extent of coverage, and commencement of membership of its employees. Coverage under one Participating Employer shall not preclude a second membership with another Participating Employer, provided that the employee shall have met in both employers the requirements for ‘membership, Each Participating Employer acknowledges its sole responsibility for determining the qualification of its employees for coverage and eligibility under this Plan under any contract, applicable law, and regulations. Neither the Retirement Commission, any of its members, nor the Retirement Plan Office Director shall be liable for their reliance on the \written instructions of the Participating Employer to the Retirement Plan Office, or absence of such written instructions, that result to a violation of any employee's rights under any contract, applicable law and regulations. Section 2. Compliance All Members shall sign a pledge to the effect that he has read and is in conformity with this Plan and will abide by its provisions and any amendments and supplementary rules thereto. Section 3. Termination Membership in this Plan shall cease automatically upon the termination of the Member's service with the Participating Employer, except as provided for in Article XIII hereof, Section 4, __ Re-employment A Member whose membership in this Plan is terminated and is subsequently employed by any or the same Participating Employer shall, ‘upon re-admission to this Plan, be treated as a new Member and his Past Service with respect to such re-employment for purposes of Article VI, Section 3 hereof shall be reckoned from the date he became a Member after being rehired, without prejudice to Article XIL hereof. Article V ‘Nomination of BeneficiariesSection 1, Section 2. Section 3. EXECUTION COPY Page 7 of 29 ‘Nomination Members shall, upon joining this Plan, nominate or appoint in writing, in such forms as shall be prescribed by the Retirement Commission, a person or persons to receive the amount which may be due him in case of his death. Members, whether single or married, may indicate any beneficiary not necessarily following the order provided by the law on intestate succession. Every nomination or appointment of a beneficiary shall remain in force until the death of the nominee, or until revoked or amended by the Member making it by delivering to the Retirement Commission another nomination or appointment in the prescribed form. In the event of death of the designated beneficiary during the lifetime of the Member, the Member shall nominate or appoint another person or persons in his stead, Failure to Nominate If, at the death of a Member, there shall exist no valid nomination by him of a beneficiary, he shall be conclusively presumed to have appointed, as his beneficiary or beneficiaries, the person or persons in the first of the following classes then surviving: (a) Legitimate spouse and children; (b) Parents; (0) Brothers and sisters; and (6) His estate. Payment to Beneficiary or Beneficiaries (On the death of » Member, the amount standing to his eredit at the time of his death shall be made payable to the nominated beneficiary or beneficiaries under Section I above or his presumed beneficiary ot beneficiaries as provided for in Section 2 above, whichever is applicable, If a beneficiary is declared judicially incompetent, payment to his legal guardian shall be deemed as if made to the beneficiary in person and shall discharge the Fund from liability to the extent of the amount paid. In case the beneficiary is a minor or is under any disability to give a legal discharge for payment of the benefits, the benefits shall be paid to the duly appointed judicial guardian for and on behalf of the minor or person under disability. The foregoing notwithstanding, where the beneficiary is a minor and the benefits due him amount to Fifty Thousand’ Pesos (P50,000.00) or less, payment may be made to his legal guardian in accordance with Article 225 of the Family Code of the Philippines. ‘However, in no case shall the beneficiary be entitled to any interest om theSection | Section 2. Section 3, EXECUTION COPY Page 8 of 29 amount of the benefit during the period that payment was deferred because of the absence of a judicial guardian. Article VI Contributions to the Fund and the Supplemental Fund ‘Non-Contributory Plan No Member shall be required to make any contribution to the Fund or to the Supplemental Fund. However, at any time prior to his retirement, a Member may, at his option, elect to contribute monthly to the Fund an amount equal to not more than four percent (4%) of his monthly Salary, provided that the option, once exercised, shall serve as a continuing authority for the Participating Employer to deduct every month thereafter the corresponding amount from his Salary and to remit the same to the Trustee. The coniribution hereunder shall be subject to the provisions of this Plan and shall not be withdrawn unless for cause provided herein. Future Service Contributions Starting from the date of acceptance in this Plan, each Participating Employer shall contribute monthly to the Fund for the credit of its employees who are Members of this Plan an amount equal to three percent (3%) of the Member's Salary. However, effective school year 1994 to 1995, said contribution shall be increased to four percent (4%) of the ‘Member's Salary. Remittance to the Fund for the period or month covered shall not be later than fifteen (15) calendar days of the following month. On a voluntary basis, Participating Employers which can afford to contribute more to the Fund may further increase their Future Service Contributions, provided that every percentage increase in the Participating Employer's contributions may be matched by the employee under Section 1 above in the form of forced savings. Past Service Contributions In addition to the Future Service Contributions, each Participating Employer shall make a Past Service Contributions to the Fund for the credit of its employees who are Members in this Plan. This contribution shall be equal to five percent (5%) of the Member's average monthly Salary for the twelve (12)-month period immediately preceding the date of acceptance of the Participating Employer in this Plan and shall be reckoned according to the definition of “Past Service” given in Article I, Section | hereof.Section 4. Section 5. Section 6. EXECUTION COPY Page 9 of 29 The Past Service Contributions shall be paid into the Fund for the eredit of the Member concerned either in lump sum or in equal monthly installments for a period of ten (10) years or up to the Member's Normal Retirement Date (as defined in Article X, Section | hereof), whichever is the shorter period. However, in case of the termination of the Fund in accordance with Article XIII hereof or in case of the withdrawal of a Participating Employer from this Plan in accordance with Article XIII, Section 2 hereof, the balance of the unpaid Past Service Contributions need not be paid by the Participating Employer concemed. Acceleration of Past Service Contributions In the event that, on the date on which a Member dies or is separated from service on account of permanent total disability or incapacity or redundancy, the total Past Service Contribution that has been paid into the Fund by his Participating Employer for his credit is less than the total amount of Past Service benefits to which he is entitled to receive under the law, his Participating Employer shall make a single payment to the Fund to make up for the deficiency. Limitations of Contributions ‘The contributions to the Fund shall be limited to the Future and Past Service Contributions specified in Sections 2 and 3 above, without prejudice to contributions under the second paragraph of Section 2 of this Article VI Contributions to the Supplemental Fund On a voluntary basis, Participating Employers and Non-Participating Employers may contribute to the Supplemental Fund, The contributions of a Participating Employer to the Supplemental Fund shall cover any deficits or shortfalls in the payment of the retirement benefits under this Plan of any Member who is an employee of such Participating Employer. The contributions of a Non-Participating Employer shall be used to supplement payment of retirement benefits of an existing retirement plan which is administered either by the Non-Participating Employer itself or another entity. Contributions of a Non-Participating Employer to the Supplemental Fund and any income derived therefrom shall be used solely for the payment of the retirement benefits of its employees. The contributions of a Non-Participating Employer to the Supplemental Fund shall be deemed an acknowledgement from the Non-Participating Employer to abide by the obligations, benefits and conditions provided inSection 1. EXECUTION COPY Page 10 of 29 this Plan insofar as these may be applicable to said Non-Participating Employer and its employees. The Retirement Commission, in its sole discretion, shall have the authority to refuse contributions to the Supplemental Fund if such contributions will prejudice the tax exemption of this Plan. Article VII ‘Administration ‘The Retirement Commission This Plan shall be administered by a Retirement Commission. The Retirement Commission shall be composed of fifteen (15) members as follows: i. Nominees of the Fund’s biggest stakeholders appointed by the National Board as regular members; and ii, The CEAP President, the CEAP Executive Director, and the CEAP Treasurer as ex-officio members. The Retirement Commission shall elect from among its members a Chairperson The Fund’s biggest stakeholders may be entitled to nominate more than one (1) regular member of the Retirement Commission depending on their respective contributions to the Fund. The seats allocated to each of the Fund’s bigest stakeholders shall be determined by the Nomination and Selection Committee in accordance with Section 2 of this Article VIL Each regular member shall serve for a term of two (2) years. Any vacancy occurring in the seats allocated to regular members of the Retirement Commission caused by death, resignation, ineapacity, or by expiration of term shall be filled by @ nominee submitted by the lominating stakeholder of the departing reguiar member and appointed by the National Board. Any vacancies in Retirement Commission reserved for the positions of CEAP President, CEAP Director, and CEAP Treasurer shall be filled in accordance with the by-laws of CEAP. Al questions relating to the operation and administration of the Fund and the Supplemental Fund shall be resolved by the Retirement Commission. This shall include, but shall not be limited to, the power to interpret, construe, and administer this Plan to determine the rights of Members and their beneficiaries to the Fund and the Supplemental Fund, and all such powers necessary or useful in the discharge of its duties. The RetirementSection 2. EXECUTION COPY Page 11 of 29 Commission may seek the advice of counsel and may appoint an independent internal anW/or external auditor to audit the Fund and the Supplemental Fund. The Retirement Commission shall appoint a Fund Administrator who can either be the duly appointed Retirement Plan Office Director or an independent business process outsourcing provider tasked with the administration and record-keeping services of the Fund and the Supplemental Fund. The Retirement Commission may, in its discretion and deemed necessery and/or desirable, opt to appoint, in addition to the Retirement Plan Office Director, an independent business process outsourcing provider as Fund Administrator to assist the Retirement Plan Office Director. The Retirement Commission shall have the authority to determine the settlement of all expenses relating to the operation and administration of the Fund and the Supplemental Fund, including the payment of professional fees of counsels, independent intemal and/or external auditors, or Fund Administrators duly appointed by the Retirement Commission under this paragraph. The Retirement Commission is authorized by the National Board to execute and sign the Trust Agreement or Investment Management Agreement entered into with the Trustee or Investment Manager, which authority may be delegated by the Retirement Commission to any two (2) of the five (5) members of the Investment Committee in accordance with Section 3 of this Article VII. ‘The Retirement Commission, Trustee and the Investment Manager may adopt and promulgate from time to time supplementary and complementary rules and regulations conceming the administration and disposition of the Fund and the Supplemental Fund which shall not be inconsistent herewith. ‘The Nomination and Selection Committee The power to determine the Fund’s biggest stakeholders for purposes of electing the regular members of the Retirement’Commission shall be lodged with a Nomination and Selection Committee composed of five (5) ‘members, namely, the CEAP President, the CEAP Executive Director, the CEAP Treasurer, and a representative from each of the two (2) biggest stakeholders in tems of contribution to the Fund, The Retirement Commission shall appoint a Chairperson of the Nomination and Selection Committee from among the said members. Representatives of the two (2) biggest stakeholders of the Fund who are members of the Nomination and Selection Committee shall serve for a term of two (2) years, Any vacancy occurring in the seats allocated to these representatives caused by death, resignation, incapacity, or expiration of term shall be filled by a nominee submitted by theSection 3. EXECUTION COPY Page 12 of 29 stakeholder concemed and appointed by the Retirement Commission through its Chairperson, ‘The Nomination and Selection Committee shall determine the number of seats allocated to each of the Fund's biggest stakeholders in the election of the regular members of the Retirement Commission; provided, that, in determining this allocation of seats, the Nomination and Selection ‘Committee shall set a minimum amount of contribution to the Fund that shall entitle a stakeholder to have a representative elected as a regular member of the Retirement Commission; provided, further, that the resolution on the number of regular members allocated to a stakeholder for each term shall be made in the month of April to coincide with the start of the term of the members of the Retirement Commission, which term shall startin the following month of May. The Investment Committee The Investment Committee shall be composed of five (5) members appointed by the Retirement Commission through its Chairperson, preferably selected from members of the Retirement Commission itself, provided that no member of the Investment Committee shall concurrently serve as a member of the Risk, Compliance and Audit Committee. The Retirement Commission shall appoint a Chairperson from among the said members of the Investment Committee, Each member of the Investment Committee shall serve for a term of two (2) years. Any vacancy occurring in the Investment Committee caused by death, resignation, incapacity, or by expiration of term shall be filled by an appointment by the Retirement Commission through its Chairperson. Upon the recommendation of the Investment Committee, the Retirement Commission shall appoint one or several Trustees or one or several Investment Managers who shall invest, reinvest and administer the Fund and the Supplemental Fund, or any portion thereof, in accordance with Section 6 of this Article VII. The Retirement Commission may authorize any two (2) of the five (5) members of the Investment Committee to execute and sign the Trust Agreement or Investment Management Agreement on behalf of the National Board. The Investment Committee shall act as the oversight body focusing on setting the Fund and the Supplemental Fund’s investment objectives and policies (asset allocation, investment guidelines, and Trustee or Investment Manager selection), evaluating fund performance results, and providing advice to the Retirement Commission on strategic options, tactical shifting, and investment choicesSection 4, EXECUTION COPY Page 13 of 29 ‘The specific functions of the Investment Committee shall include, but shall not be limited to: (i) recommending and endorsing to the Retirement Commission the selection or termination of a Trustee or Investment Manager; (ii) formulating investment policies, objectives, and guidelines; (iii) resolving specific issues relating to the investment of the Fund and the Supplemental Fund, provided that any action taken by the Investment Committee shall comply with the guidelines approved by the Retirement Commission; and (iv) reviewing periodically the investment performance of the individual Trustees or Investment Managers and overall fund performance results versus selected benchmarks. ‘The Risk, Compliance and Audit Committee The Risk, Compliance and Audit Committee shall be composed of five (5) members appointed by the Retirement Commission through its Chairperson, preferably selected from members of the Retirement ‘Commission itself, provided that no member of the Risk, Compliance and Audit Committee shall concurrently serve as a member of the Investment ‘Committee, The Retirement Commission shall appoint a Chairperson of the Risk, Compliance and Audit Committee from among the said members of the Risk, Compliance and Audit Committee Each member of the Risk, Compliance and Audit Committee shall serve for a term of two (2) years. Any vacancy occurring in the Risk, Compliance and Audit Committee caused by death, resignation, incapacity, or by expiration of term shall be filled by an appointment by the Retirement Commission through its Chairperson. The Earnings and Reserve Accounts and the preparation and dissemination of all accounting reports shall be under the supervision of the Risk, Compliance and Audit Committee in accordance with Article VII hereof. Any and all findings and recommendations of the Risk, Compliance and Audit Committee shall be reported to the Retirement Commission which shall have control of what future actions, if any, shall be taken on the various accounts supervised by said Risk, Compliance and Audit Committee The specific functions of the Risk, Compliance and Audit Committee shall include, but shall not be limited to: (i) identifying internal and external tisk areas in all aspects of the operations of this Plan and recommending policies and procedures to eliminate or mitigate such risks; (ii) ensuring that all risk mitigating actions and procedures are implemented prior to consummation of activities that are identified as high risk and high impact; (iii) assessing the implementation and effectiveness of policies and procedures established to eliminate or mitigate identified risk areasSection 5. EXECUTION COPY Page 14 of 29 through the conduct of internal audit; and (iv) overseeing external audit process up to the release of annual audited financial statements, ‘The Retirement Plan Office Director The Retirement Commission may appoint a Retirement Plan Office Director to perform the following duties: Ensuring that the Retirement Plan Office abides by the rules of this Plan and the by-laws and established policies of CEAP; Assisting the Retirement Commission in the administration of the Fund and the Supplemental Fund; Approving retirement/separation benefit claims of Members on behalf of the Retirement Commission; Ensuring that the Trustee(s) or Investment Manager(s) adhere to the investment guidelines, asset allocation, and exposure limits prescribed by the Investment Committee in the administration of the Fund and the Supplemental Fund; Exercising overall responsibility in the preparation of consolidated reports on fund performance for presentation to the Investment Committee and the Retirement Commission; Serving as liaison between the Retirement Commission and the Trustee(s) or Investment Manager(s) in relation to investment recommendations and reports on fund performance; Ensuring that the Fund and the Supplemental Fund is maintained by the Trustee(s) or Investment Manager(s), including its successors, as recommended by the Investment Committee, and approved by the Retirement Commission; Accepting and reviewing fund management proposals from qualified financial institutions and making the necessary recommendations on such proposals to the Investment Committee for its consideration and approval; Reporting periodically to the Investment Committee and the Retirement Commission on the status of the Fund and the Supplemental Fund and other related matters;10. 15. 16. 17. 18. 19. EXECUTION COPY Page 15 of 29 Exercising direct control on the administrative and accounting functions of the Retirement Plan Office, including the backroom operations of the Fund and the Supplemental Fund; Preparing the agenda for all meetings of the Investment Committee and the Retirement Commission in coordination with the Chairperson of the Retirement Commission; Exercising overall control and responsibility in the preparation and holding of the annual Member's assembly; Conducting marketing sorties and orientation among CEAP- accredited schools/institutions, member-schools, and prospective new members of this Plan; Ensuring that all communications addressed to the Retirement Plan Office Director or the Retirement Plan Office are attended to within seven (7) working days from receipt; Reviewing the annual budget of the Retirement Plan Office for presentation to and approval by the Retirement Commission; Recommending to the Retirement Commission an independent actuary to perform, as the need arises, an actuarial study on the actuarial soundness of the Fund; Recommending the engagement of an independent auditing firm to perform the annual long-form audit on the financial condition of the Fund; Assisting the Chairperson of the Retirement Commission and performing such functions which the Chairperson may deem appropriate; and Performing other functions as may be required by the Retirement Commission. The compensation and other terms and conditions of the appointment of the Retirement Plan Office Director shall be fixed by the Retirement ‘Commission. Section 6. ‘The Fund and Supplemental Fund The contributions to the Fund and the Supplemental Fund and the earnings thereof shall be placed under the trusteeship or management of a bank or other financial institutions named as Trustee or Investment Manager inSection 1. Section 2. EXECUTION COPY Page 16 of 29 either a Trust Agreement or an Investment Management Agreement, as the case may be, including any of its successors, appointed and acting in accordance with the terms and conditions of the Trust Agreement or Investment Management Agreement, Subject to the provisions of the Trust Agreement or Investment Management Agreement, the Trustee or Investment Manager, in addition to the powers authorized by law and subject to the limitations of existing bank circulars and trust rules and regulations, including disclosure requirements and prior approval of the Investment Committee, shall have the power and authority to hold, place, invest and reinvest the Fund and the Supplemental Fund, or any portion thereof, without distinction as to principal and income in any property, real or personal, or part interest therein. Investments and reinvestments may include but need not be imited to peso-denominated, USS-denominated, or other major foreign currency-denominated common and preferred stocks, securities issued or guaranteed by the Philippine government or any of its subdivisions and instrumentalities, notes, bonds, deposits, money market placements, any and all forms of securities, with any financial institution including the ‘Trustee’s affiliates and or subsidiaries. Medium and long-term investments shall require the prior written approval of the Investment Committee, Likewise, the Trustee or Investment Manager may adopt and prescribe such rules and regulations as shall be necessary for the proper administration of the Fund and the Supplemental Fund. Article VIII Earnings, Reserve, and Supplemental Accounts Eamings Account ‘The Eamings Account shall be credited or debited, as the case may be, with all realized interests, dividends, capital gains and losses, other income and expenses on every valuation date. Reserve Account ‘The Reserve Account shall be credited or debited, as the case may be, with ‘up to 100% of the net unrealized appreciation, or up to 100% of the net unrealized depreciation, of the Fund's investment in stocks, bonds, notes, real estate, and other tangible assets on every valuation date. The Investment Committee shall determine the percentage of the net unrealized appreciation or depreciation shall be credited or debited. ‘Notwithstanding the foregoing, the Retirement Commission may instruct the Fund Administrator to proportionately distribute any or all amounts standing in the Reserve Account to the equity of the individual MembersSeetion 3 Section 4, Section 5. Section 6. EXECUTION COPY Page 17 of 29 as reflected in each Member’s Account (as defined in Article IX, Section 3 hereof) on any valuation date. Investment Revaluation Account Alll entries to the Reserve Account shall be matched by corresponding contra-entries to an Investment Revaluation Account which shall be part of the assets of the Fund, Distribution of Earnings Account The net balance in the Earnings Account shall be credited or debited to the equity of the Members as reflected in each Member's Account every ‘month-end based on their proportionate share in the total value of the Fund at the end of each month, Capital Gains and Losses Should capital gains or losses be incurred through the sale of investments, the Investment Revaluation Account, Reserve Account, and Members" Account shall be adjusted to remove therefrom the corresponding portions of the gains or losses actually realized which have been previously taken up a3 unrealized appreciation or depreciation in accordance with Sections 1, 2,3 and 4 of this Article VIL Supplemental Account ‘The Supplemental Account shall contain any monies or other things of value together with all income, capital gains, and other additions thereto, less any losses, charges, expenses, and benefit payment therefrom contributed by the Participating Employers and Non-Participating Employers to the Supplemental Fund, Article IX Accounting and Information to Participating Employers, Non-Participating Employers and Members Section 1. Section 2. Fiscal Year The fiscal year of the Fund shall begin on May 1 and end on April 30. Valuation The Fund shall be valued on a monthly basis as of the last day of every month. The valuation shall be based on fair market value as determined bySection 3. Section 4. Section 5, EXECUTION COPY Page 18 of 29 the International Accounting Standards and the Philippine Accounting Standards. Member’s Account ‘The Fund Administrator shall maintain a separate account for each Member to which account shall be credited his own contributions, if any, plus the Participating Employer's contributions allocated to him. At the end of each month, his account shall also be credited or charged with: (1). His proportionate share of the net balance in the Eamings Account proportionately accruing to him as provided in Article VII, Section 4 above. (2) His proportionate share of the Reserve Account or any portion thereof which the Fund Administrator, upon instruction by the Retirement Commission, may choose to distribute in accordance with Article VIIL, Section 2 above, ‘Member's Statement The Fund Administrator shall prepare and furnish to each Participating Employer and Member a written statement or statements of: (1) The accumulated contributions remitted by the Participating Employer on behalf of its covered employees plus earings thereof, if any, and accumulated contributions of the Participating Employer to the Supplemental Fund plus earnings thereof, if any, both as of June 30 and December 31 of each year; (2) The status of the respective Member's Accounts as of June 30 and December 31 of each year, inclusive of the Member's accumulated voluntary contributions plus earings, if any, and the accumulated contributions made by the Participating Employer in his favor, plus the income earned including his share in the unrealized appreciation or depreciation of the Fund, ‘Non-Participating Employer's Statement The Fund Administrator shall prepare and fumish to each Non- Participating Employer its accumulated contributions to the Supplemental und plus earnings thereof (realized and unrealized), if any, as of June 30 and December 31 of each year. Article X Retirement DatesSection 1. Section 2. Section 3, Section 1 Section 2. EXECUTION COPY Page 19 of 29 ‘Normal Retirement Date For all Members, the Normal Retirement Date shall be the last day of the month during which he attains age sixty (60). Optional or Early Retirement Date With the consent of the Participating Employer, a Member may retire at an Early Retirement Date which may be the last day of the month on which he shall have rendered ten (10) years of continuous service. Deferred or Late Retirement Date Under exceptional circumstances and upon the request of the Participating Employer, a Member may be asked to continue active service after his Normal Retirement Date but in no case to exceed the last day of the month during which he attains age sixty-five (65). Contributions to this Plan with respect to such Member shall continue until his actual retirement from this Plan. This same rule shall apply if a Participating Employer shall have been compelled by court action to continue the service of a Member until such member shall have reached the age of sixty-five (65). Article XT Payments of Benefits Computation of Benefits The benefits payable under Sections 2, 3, and 6 of this Article XI shall be computed based on the total amount standing to the credit of the Member in the books of the Fund consisting of his own contributions, if any, and the contributions of his Participating Employer in his favor, plus the income respectively credited thereto determined as of the last valuation date, provided that in the event that the benefits payable to a Member under this Article XI does not qualify for tax exemption in accordance with Section 2 of this Article XI and pertinent laws and regulations, the applicable taxes shall be deducted from the benefits payable to such Member. ‘Normal and Early Retirement Benefits ‘A Member who reaches his Normal Retirement Date or who elects to retire upon reaching his Early Retirement Date shall be entitled to and shall be paid the whole amount standing to his credit at the date of his actual retirement.Section 3. EXECUTION COPY Page 20 of 29 If the Normal or Early Retirement Benefits to be received by a Member from contributions made by his Participating Employer in his favor shall be less than what is required by law as a lump sum retirement benefit, the shorifall or deficit of such retirement benefit shall be paid from the contributions of his Participating Employer to the Supplemental Fund, including income or earnings attributable thercto, if any, or shall be paid directly to the Member by the Participating Employer. ‘The Normal Retirement and Deferred Retirement Benefits shall not be exempt from tax except if the Member who is at least sixty (60) years of age at the date of his actual retirement shall have rendered at least ten (10) years of continuous service with his Participating Employer and shall avail himself of the retirement benefit only once. The Early Retirement Benefit shall be exempt from tax provided that the Member shall have been: (i) at least fifly (50) years of age at the date of his actual retirement; (ii) shall have rendered at least ten (10) years of continuous service with his Participating Employer; and (iii) shall evail himself of the retirement benefit only once. Separation Prior to Retirement In case a Member who is separated from his Participating Employer prior to retirement, due to resignation or for any reasons other than dismissal for cause attributable to the fault of the Member, shall be entitled to (a) the return of his total contributions plus the income accrued thereon under the Fund, if any, and (b) a specified proportion of the total contribution of his Participating Employer in his favor plus the income credited thereto under the Fund computed in accordance with his length of membership in the Plan, a fraction of at least six (6) months being considered as one (1) whole year, as follows: Completed Years of Percentage Payable Continuous Service Underthe Fund Below 10 years None After 10 years 50% 11 years 55% 12 years 60% 13 years 65% 14 years 70% 15 years 75% 16 years 80% 17 years 85% 18 years 90% 19 years 95%Section 4. Section 5. EXECUTION COPY Page 21 of 29 20 years 100% For purposes of this Section, the tenure of service of a Member shall be reckoned from the date such employee qualified as a Member pursuant to the written instructions of the Participating Employer. Leaves of absence without pay shall not be considered as an interruption of continuous service, but the period during which the Member shall have been on leave without pay shall not be considered as part of his years of service. Procedure for Payment Application for the payment of the benefits under Sections 2 and 3 of this Article XI shall be made in writing in the form and manner prescribed by the Retirement Commission and shall be filed by the Member with the Retirement Commission duly endorsed by his Participating Employer at least thirty (30) days in advance of the date of actual retirement, resignation or separation. The Retirement Commission through the Retirement Plan Office Director shall be the sole judge of the sufficiency of the information submitted, the application and the interpretation of this Plan, and the entitlement to and the amount of the benefits, The decision of the Retirement Commission shall be final and binding upon all parties. Manner of Payment All benefits payable to a Member under this Article XT may be paid either to him or to his beneficiary directly in lump sum except that benefits may be paid to the Participating Employer which has advanced such benefits to a Member, provided that such Member shall execute a quitclaim, in the form and manner prescribed by the Retirement Commission, which shall discharge the Fund from its liability to such Member to the extent of the amount advanced by the Participating Employer. In the event that any amount payable to a Member remains unclaimed by such Member or his beneficiary for a period longer than one (1) year, the Retirement Commission through the Retirement Plan Office Director shall have the following options to be decided at the sole discretion of the Retirement Commission: (1) To remit the amount payable to such Member to his Participating Employer, which shall have the authority to receive the benefits payable on behalf of the Member or his beneficiary. Upon remittance of such benefits to such Participating Employer, the Participating Employer shall have the obligation to pay the Member or his beneficiary directly and the Retirement ‘Commission, any of its members, and the Retirement Plan OfficeSection 6. Section 7. EXECUTION COPY Page 22 of 29 Director shall be discharged of any obligation to pay the Member or his beneficiary of any amount due him under this Plan; or (2) To retain any amount payable to a Member or his beneficiary which remains unclaimed in the Fund, provided that if the benefit payable remains unclaimed for a period of more than ten (10) years, such amount shall be forfeited in favor of his Participating Employer and shall be used to reduce the subsequent contributions of such Participating Employer, provided further, that forfeiture of the amount payable to a Member in favor of his Participating Employer under this paragraph shall not apply to such Member's voluntary contributions to the Fund, if any, in which case such Member's contributions shall be remitted to the Participating Employer who shall have the obligation to remit the same to the ‘Member as provided in the preceding paragraph, Death Benefits ‘Notwithstanding the schedule of payment provided in Section 3 of this Article XI, in case of death of a Member, 100% of his equity in the Fund as reflected in his Member's Account and the proceeds of his additional death benefit under this Plan shall be paid to his nominated beneficiary or presumed beneficiary, as the case may be, regardless of such Member's length of service with his Participating Employer The additional death benefit shall be One Hundred Fifty Thousand Pesos (Php 150,000.00), regardless of the salary of the deceased Member. The deceased Member's beneficiary shall be automatically entitled to the additional death benefit provided his Participating Employer does not have any arrears and is current in its contributions to the Fund at least one (1) ‘month prior to the death of the Member. In the event that the Participating Employer shall not have been current in its contributions, it shall be given a grace period of three (3) months to update its contributions for all of its covered employees. If, after three (3) months, the Participating Employer shall have failed to do so, it shall be obliged to pay the additional death benefit of Php 150,000.00 directly to the beneficiary. Disability Benefits ‘A Member who is separated from his Participating Employer for reason of permanent total incapacity or disability shall be entitled 10 100% of his equity in the Fund as reflected in his Member's Account and an additional permanent total disability benefit of One Hundred Fifty Thousand Pesos (Php 150,000.00). The Member shall be automatically entitled to the permanent total disability benefit provided his Participating Employer shall not have any arrears and shall have been current in its contributionsSection 8, Section 9, Section 10. Section 11 EXECUTION COPY Page 23 of 29 to the Fund at least one (1) month prior to the total disability of such Member. In the event that the Participating Employer shall not have been current in its contributions, it shall be given a grace period of three (3) ‘months to update its contributions for its covered employees. If, after three (3) months, the Participating Employer shall have failed t0 do so, it shall be obliged to pay the additional total disability benefit of Php 150,000.00 directly to the Member. The determination of permanent total incapacity or disability shall be made by a licensed physician designated by the Participating Employer, based on applicable cases determined by the Social Security System and approved by the Employees Compensation Commission, and such licensed physician's judgment shall be final. Dismissal for Cause ‘A Member who is dismissed by his Participating Employer for cause attributable to his fault shall not be entitled to any part of the Fund except his own contributions with the particular income accrued thereon. Forfeitures ‘The portion of the equity in the Fund of a separated Member as reflected in his Member's Account which shall not have been paid to him by virtue Of the limitations specified by Sections 3 and 8 of this Article XI shall be retained in the Fund and shall be used to reduce the subsequent contributions of his Participating Employer. Lien of Participating Employer ‘The Participating Employer shall have the first lien upon its employees’ equity in the Fund as reflected in the relevant Member's Account to cover all liabilities of any such Member to the Participating Employer and all losses, costs and expenses which the Participating Employer may incur through such Member's dishonesty, defalcation, theft or any other act. No Other Benefit No benefit other than those previously provided shall be payable under the Fund. In the event that existing or future laws or enactment of any legislation, such as the Separation Pay Law, or contracts such as the Collective Bargaining Agreement, requires payment to the Member or his legal heirs, by his Participating Employers, of pensions, annuities, retirement benefits, disability benefits, severance payments, or any other payment arising out of his employment by the Participating Employer, except for his regular Salary, the Participating Employer reserves the rightSection 1. EXECUTION COPY Page 24 of 29 to have such payments made in full or in part, as it may exclusively determine, from the Member's equity in the Fund as reflected in the relevant Member's Account, The Member, however, shall not be eligible to receive, or shall be precluded or prohibited from receiving both, what the law, legislation or contract requires the Participating Employer to give and the benefits provided herein, but shall be entitled only to whichever benefit is the highest among them. Article XII Portability of Benefits Portability of Benefits Any provisions herein to the contrary notwithstanding, subject to the approval of both Participating Employers named hereafter and after due notification to the Retirement Commission, the membership in this Plan of ‘a Member who has rendered less than ten (10) years of continuous service and resigns or is separated from employment from one Participating Employer, and who is employed by another Participating Employer within a period of one (1) year following the effective date of his resignation from the former Participating Employer, shall not be deemed terminsted. Upon the transfer of his employment under these conditions, he shall not be entitled to the payment of any amount under Article XI, Section 3 hereof nor will the credit standing in his favor be considered as forfeited under Article XI, Section 9 hereof. Instead, he shall carry the eredit eamed under his former Participating Employer of less than ten (10) years to his new employer and the length of service in both shall be taken into consideration only in determining his total years of continuous service for the purpose of Article XI, Section 3 hereof, but not for the purpose of computing his retirement benefits. However, if upon resignation or separation, the Member has already rendered at least ten (10) years of continuous service with a Participating Employer or with two (2) or more successive Parti¢ipating Employers, he shall be paid the proportion of the amount standing to his credit, as provided in Article XI, Section 3 hereof. Consequently, the forfeitures arising out of the separation of the Member ‘who has served at least two (2) Participating Employers and shall have rendered an aggregate of at least ten (10) years of continuous service but Jess than twenty (20) years of continuous service shall be proportionately divided among the Member's previous employer/s whose credit has been carried by their former employee to his current Participating Employer, whose service he is leaving.Section 1. Section 2. Section 3. EXECUTION COPY Page 25 of 29 In the event that the benefits received by a Member under this Article XII docs not qualify for tax exemption in accordance with pertinent laws and regulations, the applicable taxes shall be deducted from the benefits payable to such Member. Article XTIT General ‘The financing of the benefits provided by this Plan shall be based on the continued contributions from the Participating Employers, as required herein. If a Participating Employer shall have failed to make the required contributions, this Plan cannot be continued for the employees of such Participating Employer. Moreover, should any action be brought against CEAP, the Retirement Commission, its members, Trustee(s) and/or the Investment Manager(s), in view of the nonpayment of contribution or for any violation of the provisions of this Plan by the Participating Employer, the Participating Employer shall hold free and harmless CEAP, the Retirement Commission, its members, Trustee(s) and Investment Manager(s) from any and all liabilities and CEAP, the Retirement Commission, its members, Trustee(s) and Investment Manager(s), either collectively or separately, shall have a right of recourse against such Patticipating Employer. Voluntary Withdrawal of a Participating Employer For adverse factors beyond its control, a Participating Employer may withdraw at any time from its participation in this Plan by serving written notice to the Retirement Commission of its intention to withdraw. The withdrawal shall become effective filteen (15) days afer the acceptance thereof by the Retirement Commission, Under no circumstances whatsoever shall such withdrawal permit the return to the Participating Employer of any portion of the contributions made by it to the Fund and the Supplemental Fund, nor allow any part of the assets of the Fund and the Supplemental Fund, to be used for, or diverted to purposes other than the exclusive benefit of the Members of the withdrawing Participating Employer or their beneficiary in accordance with Section 4 hereof. Delinquent Participating EmployerSection 4, Section 5, EXECUTION COPY Page 26 of 29 A Participating Employer who fails to make any twelve (12) consecutive monthly contributions to the Fund as required in this Plan and/or fails to comply with the rules adopted by the Retirement Commission and/or Trustee shall be considered a delinquent Participating Employer. The declaration of any Participating Employer as delinquent under this Section 3 may constitute a ground for cancelling the participation of such Participating Employer in this Plan by the Retirement Commission which shall be subject to the provisions of Section 4 of this Article XIII. During the petiod of delinquency, the Members who are employees of the delinquent Participating Employer shall, however, continue to participate in the income of the Fund to the extent accruing to their outstanding credits/contributions. ‘Should the delinquent Participating Employer later on decide to reactivate its participation in this Plan, the former shall immediately pay all contributions outstanding during the period of delinquency equivalent to five percent (5%) of the Members’ monthly Salary. Such contributions shall be paid to the Fund for the credit of the concemed Member's either in lump sum or in equal monthly installments over a period of ten (10) years. Effect of Termination of Participation In case of the voluntary withdrawal from the Fund or declaration of cancellation of participation in this Plan of a delinquent Participating Employer, the equity in the Fund of its employees who are Members of this Plan as reflected in the relevant Members’ Accounts, less any administrative expenses and other charges, shall be allocated and distributed among said Members without prejudice to the provision of Article XL, Section 9 hereof. However, should the Participating Employer withdraw from this Plan with the intention of setting up its own retirement plan or segregating its own retirement fund, the equity in the Fund of ity employees shall be transferred to the duly appointed Trustee(s) or Investment Manager(s) of such Participating Employer's retirement plan. ‘Voluntary Withdrawal of a Non-Participating Employer A Non-Participating Employer may withdraw at any time its contributions to the Supplemental Fund and earnings thereof if it intends to transfer such amounts to another Trustee by serving a written notice to the Retirement Commission of its intention to withdraw. The withdrawal shall become effective fifteen (15) days after the acceptance thereof by the Retirement Commission, Upon acceptance of the Non-Participating Employer's withdrawal by the Retirement Commission, the equity in the SupplementalSection 1 Section 2. EXECUTION COPY Page 27 of 29 Fund existing under the name of the withdrawing Non-Participating Employer shall be transferred to the duly appointed Trustee(s) of such Non-Participating Employer. Under no circumstances whatsoever shall such withdrawal permit the return to the Non-Participating Employer of any portion of the contributions made by it to the Supplemental Fund and its earnings, nor allow any part of the assets of the Supplemental Fund, to be used for, or diverted to purposes other than the exclusive benefit of the employees of the withdrawing Non-Participating Employer or their beneficiaries. in accordance with its existing retirement plan. Article XIV Amendment, Transfer, and Termination of the Plan, Amendment ‘The Retirement Commission may amend or modify this Plan at any time by a resolution approved by at least two-thirds (2/3) vote of the members of the Retirement Commission, subject to the approval of the National Board. Any amendment shall immediately be communicated to each Member through his Participating Employer. However, nothing in this present Plan nor in any subsequent amendments to be made therein shall be construed as providing or intending to provide for the return to the Participating Employers of any portion of the contributions made by them to the Fund or the Supplemental Fund, nor operate to permit any part of the assets of the Fund and the Supplemental Fund to be used for or diverted to purposes other than the exclusive benefit of the Members and their beneficiaries. ‘Transfer of the Administration of the Fund The Retirement Commission may at any time by a resolution approved by at least two-thirds (2/3) vote of the members of the Retirement Commission, subject to the approval of at least a majority vote of the members of the National Board present at a meeting duly called for such purpose, and a confirmation of at least a majority of the Participating Employers, transfer the operation and administration of the Fund and the Supplemental Fund to a non-stock, non-profit corporation duly organized under existing laws, rules and regulations to administer the Fund and the Supplemental Fund The transfer of the operation and administration of the Fund and the Supplemental Fund to such non-stock, non-profit entity shall in no case be deemed a termination of the Fund and/or the Supplemental Fund, nor authorize the retum to the Participating Employer of any portion of theSection 3. Section 1. EXECUTION COPY Page 28 of 29 contributions made by it to the Fund and/or the Supplemental Fund, nor allow any part of the assets of the Fund and/or the Supplemental Fund, to be used for, or diverted to purposes other than the exclusive benefit of the Members or the employees of Non-Participating Employers. ‘Termination of the Fund Although CEAP intends to continue the Fund indefinitely, this Plan may be terminated at any time by a resolution approved by at least two-thirds (213) of the National Board as recommended by a majority of the members of the Retirement Commission and confirmed by the majority of the Participating Employers. In case of the termination of the Fund, the entire outstanding balance of the Fund shall be allocated and distributed among all Members in proportion to their respective equities notwithstanding Article XI, Section 3 hereof, but without prejudice to the provisions of Article XI, Section 9 hereof. However, Participating Employers shall be given the option to continue the retirement fund with reference to its own employees by setting up a retirement plan approved by the BIR and transferring funds allocated to its employees to the Trustee of the new retirement plan, Article XV “Miscellaneous Provisions Non-Al ation of Benefits No Member of this Plan shall have any claim upon his equity in the Fund other than in accordance with the rules of this Plan. Specifically, he shall have no right of alienation or assignment of any part his equity in the Fund ‘or interests under this Plan, nor shall such equity or interests be liable for ‘or subject to any obligation or liability of such Member except as otherwise provided by law or in this Plan, Ifa Member alienates, assigns, cedes, pledges or charges the whole or part of his equity in the Fund or interests under this Plan without the written consent of the Participating Employer, or if any Member shall be adjudged insolvent by @ competent court, he shall forfeit all his rights and interests ‘under this Plan, However, the Participating Employer may, at its discretion, waive such forfeiture or revive the Member’s interest wholly or in part at a later date in such manner as it deems fit or pay directly the benefits to the MemberSection 2 Section 3. EXECUTION COPY Page 29 of 29 or his beneficiary, but in no case shall any payment be made to an assignee or pledgee. Rights of Members Except as specifically provided in this Plan, no person, other than the Trustee, shall have any right, title, or interest in any of the income or property of any character received or held by it for the account of the Fund, and no person shall have any vested right in any income or property in the Fund. Moreover, nothing hercin contained shall be deemed to give any Member the right to be retained in the service of the Participating Employer or to interfere with the right of the Participating Employer to discharge such Member at any time, nor shall it give the Participating Employer the right to require a Member to remain in its service, nor shall it interfere with the Member's right to terminate his service at any time. Applicable Laws The validity, effect and interpretation of this Plan shall in every instance be govemed by the laws of the Republic of the Philippines. Approved By: bh bo. S. Erguiza, Jr., FSC Chairman - CEAP Retirement Commission Catholic Educational Association of the Philippines