First contributors under PERA Law accepts by BDO

The Personal Equity and Retirement Account (PERA) Law has finally taken off as the first batch of contributors had been accepted via test launch.

Image grabbed from BDOUnibank

BDO Unibank was the first of only two banks in the country to act as PERA administrators as permitted by the Central Bank of the Philippines aka Bangko Sentral ng Pilipinas (BSP) and the Bureau of Internal Revenue (BIR). BDO has recently announced that it had accepted the first batch of PERA contributors.

The Republic Act 9505 or the Personal Equity and Retirement Account (PERA) is the Philippine’s version of similar laws covering retirement savings vehicles prevalent and long standing in more developed countries. It establishes the legal and regulatory framework for voluntary personal retirement plans as a means to promote savings mobilization, capital market development and long-term fiscal sustainability. The law was signed in 2008.

PERA Administrators will need to apply before the BIR’s Audit, Information, Tax Exemption and Incentives Division, where they will also submit quarterly and annual reports. Reports will contain PERA transactions, including contributions, income earned, assets where it is invested, early withdrawals and terminations by contributors.

Any person may only have a maximum of five PERA accounts cumulatively worth up to P200,000.
Contributors are entitled to income tax credit every year worth five percent of his or her annual contributions.
PERA will come on top of existing contributions to pension funds Social Security System and Government Service Insurance System.

“The next step is to enable PERA to be offered on a wider scale. As an industry, we need to continue working on the documentation and onboarding processes to make them more efficient and cost effective. We are likewise hopeful that the rules will be refined over time to allow millions of Filipinos to benefit from lower transaction and management costs for PERA and make it more inclusive,” Ador Abrogena, trust officer and executive vice president of BDO Trust and Investments Group said in a statement.

Source: business.inquirer.net, philstar.com