PERA, at last!
Who else is happy that the Personal Equity Retirement Account (PERA) law will finally be implemented?!
In a nutshell, the PERA is a voluntary retirement system where contributions are made by both employees and employers, kind of like the 401k in the United States. You get a tax credit of 5% of your PERA contributions and it is tax-exempt if you make withdrawals at the age of 55 and up. Here's a nice primer for the PERA: http://business.inquirer.net/198300/all-about-pera
The PERA became law way back in 2008 and the BSP promised to roll it out in January 2015, but considering its complexity and the need to get all the agencies involved on board, as well as the BIR's resistance to the tax credit, the promised roll out kept on being rolled back. Until now that is.
I first got wind of the PERA in Boracay, of all places. The hotel we were staying in had a magazine which had an article on PERA and my eyes grew big at the thought of a retirement account to supplement the paltry pension I would receive from the SSS (I was still in a law firm then). I tore out the pages of the PERA article (peace!) and researched some more on it. Of course, you can imagine my disappointment when I saw that the BSP et al were still working on the Implementing Rules and Regulations (IRR) years after the law had been passed.
As far as I know, only BPI and BDO have signed up to become PERA administrators, but I won't be surprised if more BSP accredited entities will offer PERA administration as well (Hello! Big money is involved!). On a personal note, I'm crossing my fingers that Sun Life will be a PERA administrator too since I already have a mutual funds account there and it will be easier to designate it as a PERA account than opening a new one.
Exciting times ahead :)