PERA (Personal Equity and Retirement Account) is a voluntary retirement savings account with tax incentives, created by RA 9505. (Not to be confused with the ₱2,000 PERA allowance of government employees — that's the Personnel Economic Relief Allowance.)
Tax incentives:
1. A 5% tax credit on contributions
2. Earnings inside PERA are tax-exempt
3. Withdrawals are tax-exempt if you meet the rules (generally age 55 and at least five years of contributions)
Contribution limit (per the law): ₱100,000 a year, or ₱200,000 for OFWs.
Investments: PERA-eligible products offered through accredited administrators (banks, trust companies and other institutions).
What it means for you:
- Early withdrawals lose the tax benefits and carry penalties
- Compare fees and eligible products before you open an account
- It supplements, not replaces, SSS or GSIS