Traditional Retirement Fund vs. Provident Fund: Why Ardent Chose to Go Beyond the Minimum

We Believe that the Philippine Retirement Laws are Not Enough to Secure Financial Freedom.

In most Philippine companies, retirement planning stops where the law begins. The Retirement Law requires employers to provide retirement pay — usually calculated as one month’s salary for every year of service. It’s a baseline benefit, but for many hardworking professionals, that amount simply isn’t enough to ensure long-term financial security.

At Ardent Paralegal, we believe our people deserve more than the minimum. That’s why we established the Ardent Provident Fund (APF) — a savings and investment program designed not only to secure your retirement but to help you grow your wealth during your working years.

Let’s break down what makes a provident fund different — and why it’s a smarter, stronger foundation for your financial future.

Traditional Retirement Fund: The Legal Minimum

By law, companies in the Philippines must provide a retirement benefit to qualified employees who have served at least five years and reached the age of 60 (or upon separation, depending on company policy).

The formula is simple:

Retirement Benefit = 1 month’s salary × years of service

For example, if an employee earns ₱50,000 per month and serves 20 years, they’re entitled to a ₱1,000,000 retirement benefit.

That’s a good starting point — but it’s a fixed amount, and it stops growing the day you retire. In a world where inflation, healthcare costs, and life expectancy are rising, this kind of one-time payout often falls short of what’s needed for a comfortable and secure future.

Provident Fund: Three Funds In One

A provident fund, on the other hand, is designed to build and grow your retirement savings throughout your career. It’s not just a payout — it’s a living fund that evolves with you.

The Provident Fund is composed of three (3) funds. Fund A, which is a guaranteed retirement savings fund under the Philippine laws, and Funds B and C, which come from the employees' and employer-matched contributions:

Here are its features:

1. Guaranteed Retirement Savings – The retirement savings of every Ardent employee (Fund A) are protected and invested in low-risk portfolios to preserve the capital while earning a moderate return.

   
   

2. Employee Contributions – A portion of your salary is set aside each month and added to your personal savings account within the fund. You get the full value of your contributions plus interests earned (through investments) even when you retire, get separated, or whenever something happens that disrupts your employment.

   
   

3. Employer Contributions – Ardent matches your contributions, helping your fund grow faster and doubling your long-term potential. This is a free benefit given by Ardent to all its employees.

   
   

4. Invested for Growth – All contributions are managed by BPI, one of the Philippines’ most trusted banks, under a conservative investment portfolio to ensure fund integrity and stable growth.

   
   

The result? Your money grows steadily through the power of compounding — meaning your earnings generate even more earnings over time.

The Best Gift to Your Future Self and Family

The best gift you can give your future self isn’t something bought — it’s something built. Every contribution to the Ardent Provident Fund is a step toward lasting peace of mind — for you, your loved ones, and the life you’re working hard to create.

Because at Ardent, we believe that retirement should be earned with dignity and enjoyed with security.

Watch our next blog post for the sample computation on ordinary retirement vs. retirement fund benefits.

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.