PERA is short for Personal Equity and Retirement Account. It refers to a 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.
You may use PERA to slowly build up additional funds which you may use upon retirement, even if you are employed and are entitled to receive benefits from your employer. Funds remaining inside your PERA will also be automatically paid out to your beneficiaries tax-free, in case of death, and thus will prove to be beneficial as an estate planning tool as well.
Under PERA, you can take advantage of the following benefits:
1. Tax-exempt investment income
Investment income earned from PERA may potentially be higher than your regular investment returns due to its tax-free nature.
2. Tax credit
Contributors may receive as much as Php 5,000 tax credit every year.
3. Tax-free distribution
Tax-free distribution at age 55 and 5 years of contribution.