OFWs told to invest...

OFWs told to invest in PERA for old age, rainy day

Senator Juan Edgardo Angara, chairman of the Senate Ways and Means Committee, urged overseas Filipino workers (OFWs) to save up for retirement by investing their earnings in a Personal Equity Retirement Account (PERA) – the country’s first-ever voluntary retirement account with tax incentives.

OFWs can invest up to 1200,000 annually. Non-OFWs are allowed a maximum of

1100,000 investment annually. Even if the OFW is abroad, the spouse and children can open a PERA account in behalf of the OFW.

Upon reaching retirement at the

age of 55, all payments or distributions will be tax-exempt. This can either be in lump sum, a pension for a definite period, or lifetime.

Early withdrawals are allowed if one has made contributions for at least five years, but will be subject to a penalty – except in cases when the individual is totally disabled due to an accident or hospitalization.

“PERA investments have higher returns because it is a tax-free investment income. PERA supplements the social pension Filipinos can get from SSS or GSIS. It especially targets OFWs, who may not be contributing to either of these funds,” Angara explained.

A national survey on financial inclusion conducted by the Bangko Sentral ng Pilipinas (BSP) showed only 11 percent of Filipinos save for retirement or old age.

The PERA, Angara said would help and encourage Filipinos to save up for their sunset years or for emergency medical situations.

“Many Filipinos have not adopted the habit of saving or they do not know where to invest their money.It is sad to hear that there are OFWs who fall victims to investment scammers like the “bitcoin” scam. We thus encourage OFWs to invest their money at PERA,” Angara said.

OFWs leave their families behind when they work overseas.

“This is why we encourage our OFWs to save and invest their earnings here in the country so they can secure a comfortable retirement and be with their families,” he said.

Angara is one of the authors of the PERA Law (RA 9505).

The BSP accredited last year Banco de Oro (BDO) and Bank of the Philippine Islands (BPI) as PERA institutional administrators.

PERA investments products include unit investment trust funds, share of stock of mutual funds, insurance pension products, government securities, and other financial products.