For benefit of OFWs, domestic labor force
SENATE APPROVES PRIVATELY-FUNDED RETIREMENT PLAN

The Senate, upon the motion of Senator Edgardo J. Angara, on Wednesday approved on third and final reading the Personal Equity Retirement Account (PERA) Bill, which provides for a dependable and sustainable retirement plan for Filipino workers.

Angara , Chairman of the Senate Committee on Banks and Financial Institutions, said that PERA will encourage long-term savings and reduce heavy reliance on the already overwhelmed publicly-funded retirement scheme under the SSS and GSIS.

Filipino workers generally look at retirement with apprehension as it translates to a loss of income and the lack of retirement benefits. The absence of a dependable retirement plan and thus the financial uncertainty that goes with it could make retirement a source of insecurity rather than comfort said Angara .

Take, for instance, the experience of Overseas Filipino Workers who make a huge contribution to our economy in terms of foreign remittances. Their remittances provide for their families present consumption buying a house, paying for their kids tuition, setting up small businesses but leave very little savings for ones retirement, he continued.

Angara added the country has a labor force of about 35.81 million, representing a 64% labor participation rate. Of this, only 78% are members of government-initiated pension funds: 26.49 million for SSS and 1.4 million for GSIS.

About 8 million Filipinos have no pension or retirement savings to look forward to.

With PERA, an individual contributor can make a total maximum annual contribution of P50,000.00 to his PERA account. The contributor shall be given an income tax credit equivalent to five percent (5%) of the total PERA contribution.

Income from the contribution as well as the eventual distribution of the PERA to the contributor shall be tax-exempt. This amount is withdrawable when the contributor reaches the age of 55.

With PERA, we are giving the hardworking Filipinos something to look forward to in their retirement years. By assuring their financial stability during retirement, we allow them to enjoy the fruits of many years of labor, Angara said.