Employed Filipinos can look forward to additional salary or wage deductions from their take home pay very soon. A regular deduction from monthly salary would be set aside as provision for retirement which was provided under Republic Act 9505 or the Personal Equity and Retirement Account (PERA) law.
The forced savings program is a priority seen for implementation under Finance Secretary Carlos Dominguez III, very much during the first six months of the Duterte administration.
Under the PERA scheme, employees and employers are bound to make contributions as provision for retirement.
The Bureau of Internal Revenue already issued Memorandum Order 42-2016 which covered the necessary reporting specifications which literally kicked off its implementation.
Each employee is allowed to maintain a maximum of five accounts which total should not exceed P200,000. But while the government is eager at pushing the program, it calls for an administator of the fund contributions which is non-existent yet.
The PERA program forsees that the combined contributions would be invested by the administrator as selected by the employee, in the hope that the investment would make positive returns.
The administrator first has to apply with the Bureau of Internal Revenue, the office also tasked to receive quarterly and annual reports of the transactions, contributions, income earned, investments, contributor’s early withdrawals and terminations.
The Bangko Sentral ng Pilipinas and the BIR are jointly tasked to establish a monitoring network for the program.
Meanwhile, government and private employees are already saddled by regular contributions collected by the Social Security System, Government Service Insurance System, Pag-ibig fund contributions and Philhealth premiums.
- Duterte administration seen to implement forced savings program for employees