Senator Sonny Angara who authored Republic Act 9505, otherwise known as the Pera Act of 2008, urges Filipinos to invest through PERA or Personal Equity Retirement Account, the country’s first-ever voluntary retirement account with tax incentives.

RA 9505 aims to promote capital market development and savings mobilization in the Philippines.  It is a voluntary and personal account, established by any person with the capacity to contract and possesses a Tax Identification Number (TIN), for the purpose of being invested solely in PERA investment products.  Under the Pera Law, a maximum of five PERA can be opened by a Contributor at any time under one PERA Administrator.

PERA was launched in December 2016 by the Bangko Sentral ng Pilipinas (BSP), eight years after Republic Act 9505 or the PERA Act of 2008 was signed into law.

“Marami sa ating mga Pilipino ang hindi nakaugaliang mag-ipon o mag-invest. It’s best to start saving early on, and the PERA law gives Filipinos an incentive to do so. Kaya sa mga may natanggap na extra na bonus ngayong Pasko, pumunta na sa bangko at mag-apply ng PERA,” said Senator Sonny Angara, who was then still a congressman when he authored the law.

The PERA law allows individuals to open up to five PERA accounts through accredited PERA administrators, which can be a bank or a financial company, and invest up to P100,000 annually.

Overseas Filipino workers (OFWs) can invest up to P200,000 annually or double the limit.

“It’s open to all working Filipinos–in the government, private sector, self-employed and professionals, and even our kababayan abroad. PERA supplements the social pension Filipinos can get from SSS or GSIS. It especially targets OFWs, who may not be contributing to either of these funds, so they can live comfortably when they retire,” the senator explained.

Individuals who invest in PERA are entitled to a 5-percent income tax credit. For example, if an individual made a P100,000 investment in his PERA account in one year, he or she gets to deduct P5,000 from his or her annual income tax liability.

All income earned from PERA investment products–which include unit investment trust funds, share of stock of mutual funds, insurance pension products, government securities, and other financial products–upon reaching retirement or death are tax-exempt.

Payments will be made when the individual reaches the age of 55. This can be either in lump sum, a pension for a definite period, or for a lifetime.

Early withdrawals will be subject to a penalty, except in cases when the individual is totally disabled due to an accident or hospitalization.

The BSP and the Bureau of Internal Revenue have so far accredited Banco de Oro and Bank of the Philippine Islands as PERA institutional administrators.

Source: senate.gov.ph