![\"Introduction](\"https:\/\/pnl-law.com\/blog\/wp-content\/uploads\/2020\/06\/Introduction-to-the-Personal-Equity-and-Retirement-Account-PERA.png\")
<\/figure><\/div>\n\n\n\nA Contributor may create and maintain a maximum of five (5) PERA, at any one time, provided that the Contributor shall designate and maintain only one Administrator for all his PERA.<\/p>\n\n\n\n
It is governed by Republic Act 9505, also known as the \u201cPersonal Equity and Retirement Account (PERA) Act of 2008 \u201d, which was approved on 22 August 2008.<\/p>\n\n\n\n
Who is a \u201cContributor\u201d?<\/strong><\/p>\n\n\n\n A \u201cContributor\u201d is any person with the capacity to contract and possesses a tax identification number. The Contributor establishes and makes contributions to a PERA.<\/p>\n\n\n\n How much is the maximum annual PERA contribution?<\/strong><\/p>\n\n\n\n Subject to subsequent adjustment by the Secretary of Finance, the aggregate maximum contribution is P100,000, or its equivalent in any convertible foreign currency at the prevailing rate at the time of the actual contribution, for each Contributor per year.<\/p>\n\n\n\n If the Contributor is married, each spouse may make a maximum contribution of P100,000.<\/p>\n\n\n\n If the Contributor is an Overseas Filipino, the maximum contribution is double the allowable maximum amount. \u201cOverseas Filipino\u201d refers to (1) an individual citizen of the Philippines who is working or deriving income from abroad, including one who retained or reacquired his Philippine citizenship under Republic Act 9225<\/a> , otherwise known as the \u201cCitizenship Retention and Reacquisition Act of 2003<\/a> \u201d; or (2) the legitimate spouse, whether or not said spouse is of Filipino ancestry, and the children of the Filipino citizen mentioned in item (1).<\/p>\n\n\n\n While a Contributor has the option to contribute more than the maximum amount prescribed, the excess shall no longer be entitled to a 5% tax credit.<\/p>\n\n\n\n What is the benefit to employers if they contribute? <\/strong><\/p>\n\n\n\n If a private employer decides to contribute to its employee\u2019s PERA, the amount shall be allowed as a deduction from the employer\u2019s gross income. However, the employer must also comply with the mandatory SSS contribution and retirement pay.<\/p>\n\n\n\n What is the tax treatment of funds related to the PERA?<\/strong><\/p>\n\n\n\n What are Distributions upon retirement\/death?<\/strong><\/p>\n\n\n\n What happens in case of abuse of the tax and privileges? <\/strong><\/p>\n\n\n\n Any person who unduly avails of the tax exemption privileges granted, possibly by co-mingling PERA accounts in an investment with other investments, when such person is not entitled hereto, shall be subject to: (a) penalties (fine and\/or imprisonment); and (b) refund to the government double the amount of the tax exemptions and privileges enjoyed, plus interest of 12% per year from the date of enjoyment of the tax exemptions and privileges to the date of actual payment.<\/p>\n\n\n\n What is the penalty on early withdrawal?<\/strong><\/p>\n\n\n\n \u201cEarly withdrawal\u201d pertains to any withdrawal prior to Distributions upon retirement\/death. Any early withdrawal shall be subject to a penalty to be determined by the Secretary of Finance and payable to the government. However, no penalty is imposed for:<\/p>\n\n\n\n Any premature termination shall be treated as an early withdrawal, except if the entire proceeds are immediately transferred to another PERA investment and\/or another Administrator.<\/p>\n","protected":false},"excerpt":{"rendered":" PERA stands for \u201cPersonal Equity and Retirement Account,\u201d which refers to the voluntary retirement account established by and for the exclusive use and benefit of the Contributor for the purpose of being invested solely in PERA investment products in the Philippines. The Contributor shall retain the ownership, whether legal or beneficial, of funds placed therein, […]<\/p>\n","protected":false},"author":7,"featured_media":7888,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[577,578,382,576,575,1693,391],"class_list":["post-720","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-equity","tag-investments","tag-money","tag-pera","tag-personal-equity-and-retirement-account-act","tag-republic-act-no-9595","tag-retirement"],"_links":{"self":[{"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/posts\/720","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/comments?post=720"}],"version-history":[{"count":6,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/posts\/720\/revisions"}],"predecessor-version":[{"id":7889,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/posts\/720\/revisions\/7889"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/media\/7888"}],"wp:attachment":[{"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/media?parent=720"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/categories?post=720"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/tags?post=720"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}