PERA Law to be implemented in 2010
Posted on October 21st, 2009
The PERA Law or the Personal Equity and Retirement Account Law will be implemented by the Bangko Sentral ng Pilipinas (BSP) in 2010 after different agencies of the government signed its implementing rules and regulations (IRR). BSP Governor Amando M. Tetangco Jr. spearheaded the signing of the memorandum of agreement (MOA) and IRR of PERA Act of 2008 under Republic Act 9505.
Espenilla said that the PERA Law would create a savings investment vehicle of at least five years, especially for those who are not covered by the Social Security System (SSS) and the Government Service Insurance System (GSIS), as well as Filipinos working abroad. He added that the law would help develop a domestic capital market by giving incentives to long-term investments and creating more institutional investors.
Contributors could establish an account with a maximum annual contribution of P100,000, while overseas Filipino workers (OFWs) could inject P200,000 per year. These would be entitled to a tax credit of five percent.
The funds would be managed by administrators who would be regulated by different government agencies. These could be invested in investment funds, shares of stocks of mutual fund, annuity contact, insurance pension product, pre-need pension plan, shares of stocks listed and traded at the local stock exchange, exchange-traded bonds, and other investment products.
Each administrator who will manage the trust fund should maintain a net worth of at least P100 million to ensure that it has sufficient capital.
Espenilla is optimistic that the new law would encourage contributors to invest their extra savings into the fund.
He added that the signing of the IRR finally paved the way for the implementation of the law that was conceptualized almost 10 years ago.
Other signatories in the PERA Act of 2008 include Securities and Exchange Commission (SEC) chairperson Fe Barin, Insurance Commission chief Eduardo Malinis, Finance Undersecretary Jeremias Paul Jr., and Internal Revenue Deputy Commission Nelson Aspe.
