The Personal Equity and Retirement Account (PERA) Law has finally taken off as the first batch of contributors had been accepted via a test launch.
BDO Unibank—the first of only two banks in the country to be authorized by the Bangko Sentral ng Pilipinas and the Bureau of Internal Revenue (BIR) to act as PERA administrators—recently announced that it had accepted the first batch of PERA contributors.
PERA, which was signed into law in 2008, 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.
This framework also affords employers an opportunity to become agents in promoting savings mobilization and also provides Filipinos a means to supplement their future pension benefits from the state-controlled 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. —DORIS DUMLAO-ABADILLA