05 September 2008 ~ 6 Comments

PERA Finally our Retirement Account for the Filipino

News and Events Personal Finance

I’ve long been awaited a retirement fund akin to the IRA or 401(k) in the United States. Even Malaysia has the Finally, the Personal Equity and Retirement Account (PERA) Law has been approved by GMA and now awaiting IRR.

Championed by Sen. Edgardo J. Angara, he brings up the startling fact that 8 million Filipinos have no pension or retirement savings. Even scarier is that the reserves of SSS will run out by 2011; GSIS will run out by 2040 (World Bank study) — I haven’t found which paper this is; SSS will run out 3 years from now? Dire.

Next Step: Information Campaign for Entrepreneurs

SMEs/Entrepreneurs like myself can really maximize the PERA account once DOF finalizes the IRR. I can’t wait. Especially when I encourage tech-entrepreneurship, I’m troubled when I feel they should first get their personal finance in order. Especially now, with the onset of so many work-from-home virtual assistants and freelancers, Multiply/Sulit/eBay businesses, they don’t have the benefit of usual HRD programs. This way, the government helps them save — and maybe make them report their income too.

Sen. Edgardo J. Angara, a principal author of the bill said the country’s savings rate would go up to about 30 percent of gross domestic product, from 19-23 percent, with the signing of the law by the President. He said the scheme is expected to attract eight million individuals, specifically OFWs, and self-employed individuals or entrepreneurs who are not required to contribute to the SSS and the GSIS. Office of the President

How will PERA work?

I, as an “Individual” can contribute up to P100,000 a year to my PERA account. I can invest it in a UITF, mutual fund, bank deposit, etc. Supposedly, I can only choose one administrator (bank or financial company). Most likely Sun Life or BPI for me. What about diversification? I contribute regularly and can withdraw at age 55, proceeds will be tax exempt.

Personal Equity Retirement Account PERA Philippines
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6 Responses to “PERA Finally our Retirement Account for the Filipino”

  1. frugal investor 28 September 2008 at 5:58 pm Permalink

    Hi. I would like to get hold of the mechnics for investing in PERA. Could you kindly post a link, or outline the steps. Thank you.

    Reply
  2. paulbjaylee 5 July 2009 at 1:59 pm Permalink

    Since you posted your article LinkedIn has become a very popular resource to connect headhunters, hiring managers and professional job candidates. With this end in mind members are maximizing their connections in order to fidelity 401k expand either their reach (headhunters) or their visibility (candidates).

    Reply
  3. club penguin 3 August 2009 at 11:51 pm Permalink

    I would like to get hold of the mechnics for investing in PERA. Could you kindly post a link, or outline the steps.

    Reply
  4. contribute_401k_ira 4 September 2009 at 3:37 am Permalink

    Just came and read, this is wow! I was seek from many blogs, but here is the best, I love it.

    Reply
  5. take_out_401k 29 September 2009 at 4:43 am Permalink

    This is the great blog, I'm reading them for a while, thanks for the new posts!

    Reply
  6. Courtney Lloyd 26 May 2010 at 9:52 am Permalink

    i am saving money for my retirement because i want to enjoy most of my time as an old man..~~

    Reply

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