Press Release
December 7, 2007

Villar urges lower house to act on the bill securing a retirement fund for Filipino workers

Senate President Manny Villar today urged his colleagues in the House of Representatives to act on the bill that will create a sustainable retirement fund for Filipino workers in public and private employment, especially those working overseas.

Last Wednesday (December 5), the Senate passed on third reading Senate Bill 1882 otherwise known as Personal Equity and Retirement Account (PERA) Act.

"Given the many benefits this bill have been envisioned to bring, I appeal to our colleagues in the Lower House to approve the PERA bill so this could be part of the many laws we intend to offer the people come the new year," Villar said.

The measure proposes for the establishment of a provident personal savings plan, or a legal and regulatory framework for retirement plans comprised of voluntary personal savings and investments.

"This is similar to the United States' 401(k) plans, which provides for a tax-advantaged individual retirement program. This will encourage savings and improve our country's savings rate thus develop our local capital market," Villar said.

Under the bill, 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.

The measure seeks to supplement the Social Security System and Government Service Insurance System pension scheme by setting up a privately sponsored retirement fund.

"A savings scheme with accompanying social protection and insurance that matures upon retirement is an attractive investment plan for OFW remittances. Our workers can now feel secure about their retirement years," Villar added.

The Senate president also thanked Sen. Edgardo Angara, chairman of the Senate Committee on Banks and Financial Institutions for sponsoring and defending the measure, which was unanimously approved by the Upper Chamber.

The PERA bill is the 11th bill passed on third and final reading by the Senate after only four months of holding plenary sessions, the Nacionalista Party president said.

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