Question & AnswerQ&A (IC CIRCULAR LETTER NO. 2013-23)
A Personal Equity Retirement Account (PERA) is an investment scheme where a contributor may create and maintain up to five PERA accounts, designating only one administrator for all accounts. The contributor makes investment decisions or may appoint an investment manager to do so on their behalf.
A contributor may maintain a maximum of five PERA accounts at any one time, with only one administrator designated for all PERA accounts.
The maximum allowable annual contribution to a PERA is One Hundred Thousand Pesos (Php100,000.00) or its equivalent in any convertible foreign currency.
Yes, if married, each spouse is entitled to contribute up to One Hundred Thousand Pesos (Php100,000.00) or equivalent per year to their respective PERA accounts.
Yes, overseas Filipino contributors are allowed to make maximum contributions double the allowable amount of Php100,000.00 per year.
Contributions exceeding the maximum allowable amount are allowed but the excess contributions will not be entitled to the five percent (5%) tax credit.
Distributions can be made upon reaching age 55 provided the contributor has made contributions for at least five years. Distribution options include lump sum, pension for a definite period, or lifetime pension.
Early withdrawal is subject to a penalty decided by the Secretary of Finance, not less than the tax incentives earned. Exceptions include withdrawals for hospitalization over 30 days or permanent total disability.
Qualified products include annuity contracts, insurance pension products, traditional life insurance with living benefits, variable life insurance products, and other non-speculative, readily marketable investments with regular income track record.
Living benefits include guaranteed maturity benefits, anticipated benefits, dividends, and contractual fund accumulations but exclude death, critical illness, disablement, hospitalization benefits, and injury or sickness benefits.
Yes, no PERA investment product can be issued or delivered within the Philippines by a life insurance company unless previously approved by the Insurance Commission according to the implementing rules.
The contributor must have the legal capacity to contract and must possess a Tax Identification Number (TIN).
Yes, premature termination is treated as early withdrawal with penalties unless proceeds are immediately transferred to another PERA investment or administrator.
Yes, the contracts for PERA Investment Products shall bear the PERA Product Logo as required by the Insurance Commission.