Retirement Letter

A Retirement Letter is a document that may be used by an employee who wishes to retire and leave their current employment after years of service. A Retirement Letter also serves as a resignation letter by the employee given to the employer expressing their desire to retire and to request any benefit that may be obtained by reason of their retirement.

This letter, as a resignation letter, also serves as a proof of notice of the date of resignation and may help in the transition of the employee from being employed to vacating the position.

Retirement benefit provided by law

The law provides that an employee who reached the compulsory retirement age of 60 to 65 with at least 5 years of service is entitled to a retirement pay equivalent to 1/2 month salary for every year of service, provided that the employer must not be a retail, service, or agricultural establishment employing not more than 10 workers, otherwise the employer will not be required to give retirement pay under the law. Employees have the right to these legal benefits, however, the employer can offer a broader benefit plan to the employee than that provided by law, which will be provided or stated in the employment contract or in a company policy.

Retirement Benefit Plan

While the law provides the minimum benefit that should be given to the employee, the retirement plan offered by the employer to its workers or employees that is greater or broader than that provided by law may be used by the employee who wishes to retire instead of those provided by law. The employee however must be compliant with the requirements of the employer for them to make use of the said retirement plan. These requirements may be found on the employee's employment contract or company policies.

Notice Period

A notice period is the length of time in advance that the employer must be notified about the resignation or retirement of the employee. If there is a notice period under the employment contract, handbook, or company policy this should generally be complied with by the employee.

In the absence of such notice period under a company policy, the employee should follow the notice period as provided under the law which provides that the employee must wait for a period of one month from sending the letter before the retirement or resignation takes effect.

In either case, the employee may opt not to comply with the notice period subject to the employer's approval, however, it must be noted that if the employee insists on not complying with the notice period despite the employer's demand that he must comply with the notice period, the employer can take the matter to court and ask for damages or a sum of money against the employee.

How to use this document

The following are the essential contents of this letter:

• The details concerning the employee who will retire and send this letter,
• The details of the employer who will receive this letter,
• The notice period if any and the option to request not to comply with it.
• The retirement benefit plan offered by the employer if any.
• If there is no retirement benefit offered by the employer, a claim of retirement benefit under the law.
• A request for assistance in claiming a retirement benefit if the employee is not entitled to one.
• An option to extend assistance in looking for a replacement.
• Lastly, the reasons of the employee for retiring may also be included.

After completing the documents, the letter must be printed and signed with at least two copies, a copy for each party, the employee, and the employer. Alternatively, the letter may be sent to the employer via email.

Applicable law

The labor laws in the Philippines are governed by the Labor Code of the Philippines ("The Labor Code"). There is no legal requirement as to the format of a Retirement Letter, however, Article 300 of the Labor Code provides that "an employee may terminate without just cause the employer-employee relationship by serving a written notice on the employer at least one month in advance. The employer upon whom no such notice was served may hold the employee liable for damages." Further, the provisions on retirement under the Labor Code are amended and supported by R.A. 7641.

How to modify the template

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.