PH retirement fund law gets BSP nod
MANILA, Philippines – The Monetary Board approved the guidelines for the accreditation of Personal Equity Retirement Act (PERA) market participants – a needed boost since it was signed into law in August 2008.
PERA, which was made possible via Republic Act No. 9505, aims to boost capital market development and increase savings among Filipinos, particularly building their retirement fund. PERA, like the 401 (k) in the US or the superannuation in Australia, is a voluntary and personal account, and a contributor with a tax identification number (TIN) can maintain a maximum of 5 PERA accounts under a single administrator.
Under the guidelines approved by the Monetary Board, market participants are defined as administrators, investment managers, and custodians of either the cash balances of PERA clients or their investments in PERA-eligible securities.
Specific details are also covered in the approved guidelines, like handling PERA-related processes such as account opening, administration, withdrawal, and termination.
The Monetary Board also approved an initial list of PERA-eligible investment outlets like bank deposits, long-term negotiable certificates of time deposits, unsecured subordinated debts, unit investment trust funds, government securities, and related debt instruments.
Rigorous standards for banks and trust entities which are interested to function as a PERA market participant are to be enforced by the guidelines. “This ensures that only those which meet the high standards will deal with the public,” the Bangko Sentral ng Pilipinas (BSP) said in a statement.
Safety nets for PERA contributors are also covered in the guidelines, like the risks involved for PERA investors; ensuring that such financial risks are appropriately disclosed to investors; and having the necessary systems in place for reportorial purposes.
The Board has also approved the signing of a memorandum of agreement with the Bureau of Treasury for proper handling of basic securities deposits by PERA administrators.
For a “smooth implementation” of the PERA law, an inter-agency board is also being established that include senior officers from the BSP, Bureau of Internal Revenue, Insurance Commission, and Securities and Exchange Commission.
BSP Governor and Monetary Board Chairman Amando M. Tetangco Jr said that the guidelines’ approval brings them closer to providing each Filipino with an effective tool for securing his future.
“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 in a statement.
Citing the approved PERA guidelines, the BSP said that preparations are on schedule for a January 2015 launch date. – Rappler.com
Retired senior citizen image from Shutterstock