Compliance with Insurance Code and PERA Act Conditions
- PERA Investment Products must adhere to Title 10 (Variable Contracts) of the Insurance Code, Circular Letters Nos. 27-2005 and 32-2011, and Guidelines on Variable Life Insurance Contracts.
- Contracts must include terms based on the PERA Act 2008 Sections and corresponding rules:
- Section 4: Contributors may establish up to five (5) PERAs but must designate only one Administrator for all accounts; investment decisions may be made by the Contributor or an appointed Investment Manager.
- Section 5: Maximum annual contribution is Php100,000 or equivalent foreign currency; married contributors may each contribute this amount; overseas Filipinos can contribute up to double; contributions in excess of the maximum do not qualify for tax credit.
- Section 11: Premature termination is treated as early withdrawal, with penalties unless funds are rolled over to another PERA or Administrator.
- Section 12: Distributions allowed at age 55 with at least 5 years of contributions; distributions may be lump sum, pension for a fixed or lifetime period, or continuation of the PERA; full distribution upon death.
- Section 13: Early withdrawals incur penalties not less than tax incentives enjoyed, payable to government; exceptions apply for long-term hospitalization and permanent total disability.
Eligibility and Characteristics of PERA Investment Products
- Qualifying products include:
- Annuity contracts
- Insurance pension products
- Traditional life insurance with living benefits where anticipated accumulation exceeds premiums by eligibility date
- Variable life insurance products with segregated portfolios invested in diversified and approved securities
- Non-speculative, readily marketable investment products with a proven record of regular income
- Other Insurance Commission-approved products
- Living benefits include guaranteed maturity, anticipated benefits, dividends, and contractual fund accumulations; excluded are death, disability, hospitalization, critical illness benefits.
Product Identification and Contributor Requirements
- Contracts for PERA Investment Products must bear the official PERA Product Logo.
- Contributors must have legal capacity to contract and possess a valid Tax Identification Number (TIN).
Effectivity
- The Circular Letter takes effect immediately upon issuance.