Traditional Retirement vs. Provident Fund: How Much More Can You Really Earn?

When people think of retirement, most imagine a one-time payout — a lump sum after years of service. But what if your retirement fund could grow steadily during your career, not just wait until the end?

That’s the main difference between a traditional retirement fund and a provident fund. Both are designed to support you after work, but only one helps you build real wealth while you’re still working.

Let’s take a closer look at how the two compare — especially in terms of actual numbers.

The Traditional Retirement Fund

Under Philippine law, the typical formula is:

1 month’s salary × years of service = retirement benefit

It’s a simple one-time payout. Once received, the amount stops growing — no matter how early or long you’ve worked.

Let’s look at a sample case:

Scenario	Details
Monthly Salary	₱50,000
Years of Service	20 years
Computation	₱50,000 × 20 = ₱1,000,000
Total Benefit	₱1,000,000 (fixed, one-time)

That amount may sound significant, but it often isn’t enough to last through retirement. In today’s economy, ₱1,000,000 can be spent quickly on living expenses, healthcare, or family support — especially over 10 to 20 years of retirement.

The Ardent Provident Fund

The Ardent Provident Fund (APF) is different. It’s built on three components:

1. Fund A: Guaranteed Retirement Savings – your legally mandated retirement benefit, secured by Ardent.

2. Fund B: Employee Contributions – a portion of your salary saved consistently over time.

3. Fund C: Employer Contributions – Ardent matches your contributions, doubling your long-term potential.

   
   

These contributions are managed by BPI under a conservative investment portfolio, allowing your savings to grow through the power of compounding while preserving the capital amount.

Side-by-Side Comparison

Let’s use the same example employee —earning ₱50,000 per month with 20 years of service.

Category	Traditional Retirement Fund	Ardent Provident Fund
Monthly Salary	₱50,000	₱50,000
Years of Service	20 years	20 years
Employee Contribution	None	5% of salary (₱2,500/month)
Employer Contribution	None	5% of salary (₱2,500/month)
Total Monthly Contribution	None	₱5,000
Total Contributions over 20 years	None	₱5,000 × 12 × 20 = ₱1,200,000
Average Annual Investment Growth	None	5% conservative compounding
Fund Value After 20 Years	₱1,000,000 (fixed)	₱2,500,000 – ₱3,000,000 (approx.)
Total Retirement Benefit	₱1,000,000	₱3,500,000 – ₱4,000,000 (including guaranteed retirement)

*Assumes consistent monthly contributions and an average 5% annual return from conservative investments.

What These Numbers Mean

The difference is clear:

• The traditional retirement plan guarantees a single payout of ₱1,000,000 after 20 years.

• The Ardent Provident Fund builds ₱3,000,000–₱4,000,000, depending on performance, more than three times the value.

That’s the power of compounding and shared contributions. Your fund continues to work for you — quietly, steadily, and securely.

Beyond the Numbers: Why It Matters

This isn’t just about math — it’s about peace of mind. With the Ardent Provident Fund, you’re not just relying on a one-time payout; you’re building a financial foundation that supports:

• Emergencies (with responsible access and low-interest loans)

• Long-term growth (through conservative investments)

• Family security (by ensuring lasting stability after retirement)

At Ardent, we believe every Ardentian deserves more than the minimum. You deserve a system that rewards your loyalty, protects your effort, and ensures that when it’s time to rest, you can do it with confidence and dignity.

Final Thought

Retirement should be something to look forward to — not something to worry about.

Through the Ardent Provident Fund, your years of hard work become the best gift you can give your future self and your family.

Start today. Thank yourself years from now.

If you have any questions or concerns, please feel free to email the Ardent Provident Fund Board of Trustees at providentfund@ardentparalegal.com. If you wish to become a part of the Ardent Paralegal and Business Solutions, feel free to visit our website at www.ardentparalegal.com.