Money Magnets

News Update: The Personal Equity Retirement Account (PERA) tax rules have already been submitted to the Finance department and are awaiting approval. This is good news for all Filipinos, especially Overseas Filipino Workers, because we can now open retirement savings accounts, similar to the US' 401(k), that are tax free!

Retiring peacefully - PERA ACT Philippines

Republic Act 9505, better known as the PERA Act, was signed into law in 2008 and the implementing rules were issued by the Securities and Exchange Commission (SEC) and Bangko Sentral ng Pilipinas the following year. However, it has not been implemented because of the absence of BIR tax rules. Once the Department of Finance approves the newly submitted tax rules, then maybe, we can finally avail of this great opportunity. Managing our own retirement funds can be much better than relying on the Social Security Service (SSS) or Government Service Insurance System (GSIS).

Based on the PERA Act, Filipinos can save for retirement with a maximum contribution of 100,000 pesos a year. Overseas Filipino Workers are provided a higher annual cap of 200,000 pesos. While five PERA accounts can be maintained at any one time, the annual contributions must not exceed the set limits. Continue reading to learn more about the tax benefits of PERA investments.