BSP set to launch PERA next year

MANILA, Philippines - The long-awaited Personal Equity Retirement Act (PERA) may finally be launched next year after the Bangko Sentral ng Pilipinas issued guidelines last week.

“The MB’s approval of the guidelines brings us closer to providing each Filipino with an effective tool for securing his future,” BSP Governor Amando M. Tetangco Jr. said.

Republic Act 9505, passed into law in 2008, allows the creation of a personal savings plan especially for those who are not covered by the Social Security System and the Government Service Insurance System.

The implementing rules and regulations of the PERA Act of 2008 was issued in 2009, while a revenue regulation from the Bureau of Internal Revenue was crafted in 2011.

These guidelines released by the BSP entail the accreditation process for market participants and detail the account opening, administration, withdrawal, termination, and other PERA-related processes.

“The BSP has always reminded the public about preparing for retirement and the PERA law is an excellent vehicle for achieving one’s personal goals,” Tetangco said.

The central bank said these rules will provide banks and trust entities interested to become a PERA market participant with the needed standards they need to abide by.

At the same time, the BSP said safety nets for contributors are included in the newly-issued guidelines.

“This includes putting in place processes and procedures for assessing the level and type of risks that PERA investors may take, ensuring that financial risks are appropriately disclosed to investors, as well as having the necessary systems in place for reportorial purposes,” the BSP said.

The BSP said it has already approved an initial list of PERA-eligible investment outlets including bank deposits, long-term negotiable certificates of time deposits, unsecured subordinated debts, unit investment trust funds, government securities, and national debt instruments.

“To ensure the smooth implementation of the PERA law, an inter-agency board is also being created. This will include senior officers from the BSP, Bureau of Internal Revenue, Insurance Commission and Securities and Exchange Commission,” the BSP said.

PERA is not intended to replace the SSS or the GSIS but is meant to supplement them, especially for Filipinos who are not contributors to either of the pension funds.