The Philippine retirement benefit space has been static since the enactment of the Retirement Pay Law under R.A. 7641 three decades ago. Thus, retirement benefits introduced in the market are predominantly defined benefit in nature where benefits are based on a predetermined formula. In fact, the benefit under the Retirement Pay Law is equivalent to a month's pay for every year of service.
However, in the last decade or so, companies have been slowly migrating their traditional defined benefit plans to defined contribution or hybrid plans to be more competitive in the market.
These changes in the retirement landscape can be noted based on emerging trends, proposed legislative changes and financial wellbeing priorities of both employers and employees.