SEC issues rules for retirement savings administrators

The Securities and Exchange Commission (SEC) has introduced new guidelines for companies that want to offer retirement savings programs for Filipinos, to promote long-term investments while protecting customers from potential fraud.

Under the SEC’s Memorandum Circular No. 14 Series of 2024, market participants offering Personal Equity and Retirement Account (Pera) products need to maintain a net worth of at least P100 million at all times and file an application for the issuance of a qualification certificate with the SEC Markets and Securities Regulation Department.

As its name suggests, Pera is a voluntary personal retirement savings program in the Philippines, meant to supplement benefits under the state-run Social Security System and Government Service Insurance System.

According to the corporate watchdog, SEC-regulated securities brokers and investment houses may register as Pera administrators, or those responsible for overseeing and maintaining individual accounts.

Meanwhile, investment company advisers or fund managers may register as investment managers.

Among the requirements for applicants is a manual of corporate governance and an organizational plan or structure of personnel who will perform Pera administration functions.

They must also have “adequate systems and technological capabilities, as well as the necessary technical expertise and personnel to administer all types of Pera investment products.”

In compliance with the Pera Act of 2008’s implementing rules and regulations, the SEC also required registered Pera administrators to hold government securities equivalent to 1 percent of the total value of the Pera funds they manage.

“This will serve as security for the faithful performance of its duties,” the SEC said. —Meg J. Adonis