BIR Ruling

July 28, 1970 Messrs. Feliciano F. Miravite, Inc. Suites 307-309 Sarmiento Bldg. Ayala Avenue, Makati Rizal Gentlemen : With reference to your letter dated July 11, 1970, I have the honor to inform you as follows: Employees of affiliated corporations maintaining a common retirement plan, if transferred from one affiliate to another, may carry over to their new employer their earned benefits from their former employer. In such case, the corresponding benefits already accrued may be transferred from the Trust Fund of the former employer to the Trust Fund of the new employer. Where one affiliate absorbs the entire operations of another either on account of merger, consolidation, or otherwise, so much or all of the Trust Fund corresponding to the earned benefits of the employees transferred from one affiliate to the other may also be transferred from one Trust Fund to another. In all of the foregoing cases, the transfer of the entire Trust Fund or a portion thereof to another will not give rise to any income tax consequence. If the common retirement plan involved had already been found to be a reasonable plan by this Office, the occurrence of the foregoing incidents will not affect the qualification of the Plan. cdta Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue