Tycoon Lucio Tan-led Philippine National Bank (PNB) has obtained regulatory clearance to bring to the retail market an investment instrument for Filipinos who want to build up additional funds for retirement.
PNB has started offering the Personal Equity and Retirement Account (Pera) through its trust banking group. This was after getting the approval of the Bureau of Internal Revenue (BIR) and the Bangko Sentral ng Pilipinas (BSP) to roll out this investment instrument.
“Through Pera, we are making it easier for Filipinos to save and build their retirement fund,” PNB president and CEO Wick Veloso said in a press statement on Wednesday.
“Pera supplements our national government’s pension programs like the [Government Service Insurance System] or [Social Security System] as well as the retirement programs of private companies. We support the BSP in offering this savings plan to help Filipinos live comfortably in their sunset years,” he added.
Established via Republic Act No. 9505, or Pera Act of 2008, Pera is a voluntary retirement program that allows any person with a tax identification number and capacity to contract to accumulate additional funds for retirement.
The Pera law offers generous tax incentives, such as a 5-percent tax credit on annual contributions alongside exemption from investment income taxes.
PNB is part of the Pera ecosystem through its PNB Pera Bond Fund. Interested investors can subscribe to the digital platform for as low as P1,000, one of the lowest initial placements in the market today.
“Even if you are employed and are entitled to receive retirement benefits from your employer, you may invest in Pera to gradually build funds that you can use when you retire. If you are an employer, you can use Pera as an option to augment your employee benefits,” PNB chief trust officer Jiah Santos said.
“As an investor or contributor, you can redeem your Pera contributions once you’ve reached 55 years old and have contributed for at least five years. In addition, qualified distributions made upon the death of the contributor are not subject to estate tax, making it an ideal estate planning tool,” Santos added.
An investor can open up to a maximum of five Pera accounts. The maximum allowable contribution per year is P100,000 for resident Filipinos and P200,000 for overseas Filipinos.
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