Launch of pera: Voluntary retirement account now in force

MANILA, Philippines - The government finally hit the ground running for the voluntary retirement account comprised of personal savings and investments to promote the value of savings among Filipinos.

The Personal Equity Retirement Account (PERA) was launched at the Bangko Sentral ng Pilipinas (BSP) last Friday culminating several years of preparations among government agencies and market players.

“We have been working with various government agencies and we are happy to see PERA come into fruition. PERA is certainly a major step towards improving the financial well-being of Filipinos,” BSP Governor Amando Tetangco Jr. said.

As a voluntary retirement account, PERA provides an organizing framework to help Filipinos 18 years old and above prepare for their eventual retirement. The PERA law, crafted in 2008 as Republic Act 9505, provides tax benefits while instilling the saving discipline of making annual contributions to their own account.

Unlike existing national or corporate pension schemes, PERA does not require a deduction from one’s salary to accumulate funds. Instead, PERA relies on an individual’s decision to invest up to P100,000 annually to prepare for retirement.

The law allows individuals to open up to five PERA accounts and these can be invested in specific PERA-accredited product lines. Overseas Filipino workers are provided the additional benefit of being able to invest up to P200,000 annually which is twice the normal limit.

“Since we have a very young population and typically strong family ties, we tend to overlook preparing for our own retirement. PERA addresses this by providing all the essential elements – from governance to products to financial literacy to incentives – so that we can properly get started,” he added.

Individuals who like to open their PERA will do so thru accredited PERA administrators. Upon their own choice, they can engage a PERA investment manager who can help them with investment advise.

The BSP and the Bureau of Internal Revenues have accredited BDO Unibank and Bank of the Philippine Islands as PERA institutional administrators, in addition to the 61 professionals who have passed the individual PERA accreditation examination.

BDO president and CEO Nestor Tan said PERA was finally launched eight years after the law was passed in 2008.

“The most important thing is to get started. This is a journey towards making our Filipino countrymen conscious of savings and financial planning,” he said.

BPI president and CEO Cesar Consing said the PERA Act of 2008 was all about financial inclusiveness.

“By providing tax perks to individuals who invest in PERA Funds, PERA levels the playing fields between those who work for companies and those who are self employed,” he said.