Personal Development, Finance and Investing For Filipinos
An investment in knowledge always pays the best interest. Financial Education is your best investment.
Real-Time Ticker: The Philippine Stock Exchange Index
Retirement starts with a vision, and comes to life with a plan.
According to CNN Philippines, "Millennials aren't saving enough for retirement." Where do you see yourself? The only person who will take care of the older you someday is the younger you are today.
You may not have any retirement savings yet, but it's never too late to start. The good news, our government established PERA Law (RA 9505) to promote capital market development and savings mobilization in the Philippines.
PERA is short for Personal Equity and Retirement Account under Republic Act No. 9505. It refers to a voluntary retirement account established by and for the exclusive use and benefit of the Contributor for the purpose of being invested solely in PERA investment products in the Philippines. It aims to promote capital market development and savings mobilization by establishing a legal and regulatory framework of retirement plans for persons.
Am I Eligible To Open A PERA?
Yes, you can be a PERA "Contributor" if you are a person of 18 yrs old and above and earning an income through employment or self-employment in the Philippines or overseas, and with a Philippine Tax Identification Number.
Why Should I Be Interested In A PERA?
Your PERA enjoys the following incentives:
These incentives, however, are limited to your actual PERA contribution not exceeding the annual maximum contribution and its fruits.
How Much Can I Contribute To A PERA?
The maximum aggregate annual contribution is Php 100,000.00, except for Overseas Filipinos who can contribute Php 200,000.00. You have the option to contribute more than the maximum amount, however, the excess shall no longer be exempt from tax.
Who Are The Parties To A PERA Aside From The "Contributor"?
What Investment Products Are Available For PERA?
The investment products to which PERA contributions may be invested in are:
These investment products must be duly approved/considered eligible by the concerned Regulatory Authority in order to be entitled to the above-mentioned tax incentives.
How Do I Start Investing In A PERA?
To become a Contributor, you should first look for an Administrator who will open,administer and oversee your account. You may have a maximum of five (5) PERA, provided that you shall designate only one (1) Administrator for all accounts and that each account shall be confined to one (1) investment product category. Once the Administrator is appointed, you will choose a Custodian who will receive the funds. The Custodian will operate independently from the Administrator but will act upon your instructions made through the Administrator.
The choice of investment product is up to you. However, if you are unsure of which investment products to invest in, you may hire an Investment Manager.
During your account opening process through the Administrator,
PERA can also be opened by the spouse/child of a married overseas Filipino as provided under Section 3 of R.A. 9505 and BSP Memorandum No. M-2014-045 dated 12 February 2014.
What Are The Fees And Charges Involved?
The fees and charges for your PERA are administration fees and custodial fees. Investment management fees shall also be charged if you appointed an Investment Manager.
When Am I Allowed To Withdraw My PERA Contributions?
Your PERA contributions can be withdrawn or distributed, and be exempted from income or estate taxes, if applicable, under the following circumstances:
Can I Withdraw My PERA Contributions Without Complying With The 55 And 5 Rule?
Yes, but subject to early withdrawal penalties. Early withdrawal penalties means all taxes waived in the Contributor’s favor shall be repaid to the BIR.
Are There Exemptions From The Early Withdrawal Penalties?
Yes. No withdrawal penalties shall be imposed under any of the following circumstances:
Source: Financial Consumer Protection Department (BSP)
For more updates about
Personal Development, Financial and Investment Education. Join and Subscribe to my Newsletter.
ABOUT THE BLOGGER
Ralph "Rap" was born and raised in the Philippines. A Financial Literacy Advocate. An I.T. by Profession. An Investor. A Business Minded. An Introvert. A Photography Enthusiast. A Travel and Personal Finance Blogger (Lakbay Diwa and Kuripot Pinoy). A Traveler. An Adventurous. A Mountain Hiker. A Dreamer.
Currently works his way towards time and financial freedom.