The maximum annual contribution to the Personal Equity and Retirement Account (PERA) has been doubled in line with the government’s efforts to encourage more Filipinos to prepare for retirement through the program.
Financial regulators have raised the annual limits from P100,000 to P 200,000 for locally employed and self-employed individuals; and from P200,000 to P 400,000 for Overseas Filipinos.
Pursuant to Republic Act No. 9505 or the PERA Act of 2008, Finance Secretary Benjamin Diokno approved the increase in allowable yearly PERA contributions effective immediately starting 2023 upon the recommendation of the PERA Inter-Agency Board.
The board is composed of the Bangko Sentral ng Pilipinas (BSP) as the lead agency, the Securities and Exchange Commission, the Insurance Commission, and the Bureau of Internal Revenue.
According to BSP Governor Felipe Medalla, “The increase in the limits provides our kababayans with greater opportunities to ensure their financial security. It also supports the government’s broader thrusts of mobilizing individual savings for capital market development and generating funds for long-term projects. ”
Aside from increasing the PERA contribution limits, the BSP has also removed the basic security deposit for the faithful performance of a PERA Administrator’s duties, which was previously set at 0.5 percent of the book value of PERA assets.
This is expected to lower the cost of administering PERA assets, which may impact the contributors through lower charges on PERA. This is likewise seen to encourage more BSP-supervised financial institutions to participate in the PERA ecosystem.
The PERA, which was launched by the BSP in 2016, is a voluntary retirement savings program that supplements state-based pension plans and employer-sponsored retirement plans.
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