News Update:
Republic Act No. 9505, or the Personal Equity and Retirement Account, which is popularly known as the PERA Bill was signed into law by the President on Aug. 22, 2008. This law provides tax incentives for Filipinos who will engaged in sustainable investments, savings and protection for their personal retirement funds. As an incentive the government will be granting employees who will invest in PERA accounts a 5% tax credit that can be deducted from their individual income tax. Aside from this, all earnings from these PERA accounts will be exempted from taxes.
The Private employers who contribute to help their employees with their PERA accounts are also given tax credits. The employer's total contribution can be deducted from their company's income tax. Both private sector and government authorities rally behind this concept of savings on a national scale for the working class. The business sector and government strongly believes in boosting domestic savings as means to jump-start the Philippine economy. So it can help infuse capital that will create more jobs for the people and improve social services.
Pera contributors' may help make a maximum contribution of P100,000 or P200,000 for spouses. For an OFW and his or her spouse, the limit is P400,000 per year.
If Filipinos save the maximum of P100,000 every year, and assuming the funds grows at an average annual rate of 8 percent(actual rate can be lower or higher), you will have more than P7.3 million after 25 years. For a married couple, the fund can reach more than P14.6 million. With this amount, you can really enjoy your retirement and embrace old age with open arms and a sweet smile. The only problem is that many of our people can not afford to save P100,000 a year.
An online survey conducted by Citibank last year revealed that the average Filipino's savings would only last a little over two months. There's not much retiring you can do with that amount. The same survey revealed that only about one in 10 has a retirement plan and has enough savings to cover his/her needs. These studies reveal the growing need for a program that will make small savings work for the retirement of many Filipinos. The only logical choice for the majority of our people is the option that the Paglingap Power Savers Program provides. The Paglingap program combined savings with insurance in a five year package. This provides ordinary Filipinos the chance to save for their retirement with small regular monthly savings, that yields 8.5% for the first five years, and it doubles the total savings every five years thereafer. This yields provides a substantial amount of retirement money for the depositor. With as little as P450.00 a month for 5 years, Filipinos can look forward to P120,000 in 20 years. This makes the program more realizable for ordinary Filipino workers trying to make a living and preparing for the future. Its insurance component also provides protection for the depositors's life and savings. Paglingap's deposit insurance assures the depositor that in times of sudden misfortune his/her beneficiaries will receive a life insurance benefit, plus the full amount of his/her savings on its maturity date.
With the PERA Law backing up the savings program therea are better reasons for companies to go into corporate social responsibility(CSR) programs like the Paglingap Power Savers Program. It helps the workers secure a retirement plan within their means, and saves the company a lot on taxes.
11/13/2008, 9:14 am
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