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THE
Senate ratified Tuesday night the consolidated version
of the Personal Equity and Retirement Account (Pera)
bill which provides for a supplementary annuity plan for
overseas Filipino workers (OFWs), as well as retirees
from the government and the private sector who wish to
augment their pension funds.
Sen.
Edgardo Angara, its chief sponsor, told reporters that
the reconciled Senate-House version of the Pera bill is
set to be ratified by the House before Congress adjourns
sessions this week. It is expected to be signed into law
by President Arroyo during the monthlong congressional
recess.
Once
enacted into law, the Pera will “help retirees live more
comfortably,” according to Angara.
“This is
one of the best ways to accumulate savings. It will
greatly augment Filipinos’ retirement plan. People are
generally scared of retiring, especially Filipinos,
because we are not savings-conscious and the pension we
get from the government, either from the SSS [Social
Security System] or GSIS [Government Service Insurance
System], is usually inadequate for our sunset years,”
said Angara, chairman of the Senate Committee on Banks,
Financial Institutions and Currencies.
In a
separate statement, Sen. Mar Roxas, who coauthored the
measure, hailed the passage of the Pera bill in the
bicameral committee, saying its early enactment into law
would ensure financial stability and added opportunities
for retirees.
With the
Pera plan, he added, “We can provide for more retirees
and give them more options with their money compared
with what are now available.”
Briefing
reporters after the bicameral conference committee
meeting, Angara cited among the highlights of the
consolidated Senate and House versions the increase in
the maximum annual contribution of retirees availing
themselves of Pera benefits. The conferees also agreed
to impose stiffer penalties for violators who misuse the
Pera law for illegal activities, like pyramiding
schemes.
“We
[agreed to] double the maximum annual contribution to
P100,000 [from the original Senate version of P50,000].
This makes for a bigger pool of savings. We also imposed
stiffer penalties, including imprisonment of up to 12
years to avoid pyramiding scandals. These are
hard-earned savings of the people and we cannot afford
to lose them over some unwise investment, or worse,
criminal acts,” he said.
Angara
said the National Statistics Office reported a labor
force of about 35.81 million, representing a 64-percent
labor participation rate.
Of this
number, only 78 percent are members of
government-initiated pension funds: 26.49 million for
SSS and 1.4 million for GSIS, while about 8 million
Filipinos have no pension or retirement savings to look
forward to.
Angara
pointed to the experience of OFWs who make a huge
contribution to the Philippine economy in terms of
foreign remittances.
“Their [OFWs]
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 one’s retirement,” Angara noted.
Under
the Pera bill, an individual contributor may make a
total maximum annual contribution of P100,000 to his
Pera account; and get in turn an income-tax credit
equivalent to 5 percent 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 may be withdrawn when the
contributor reaches the age of 55. |
