New mutual funds eligible for PERA

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Newly formed mutual funds, including any sub-fund of an umbrella fund and exchange-traded funds whose fund managers have a track record for the past five years will now bepart of securities eligible for investments under the Personal Equity and Retirement Account (PERA), according to the Securities and Exchange Commission (SEC) .

The SEC in a circular issued on August 1 said newly formed mutual fund must contain the words “Personal Equity and Retirement Account” or “PERA”  in their names.

Real estate investment trust (REIT) shares, corporate bonds with an investible rating issued by an accredited credit rating agency, and equity securities that form part of the Philippine Stock Exchange (PSE) Dividend Yield Index are also deemed eligible PERA investment products, the SEC said.

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Government securities, securities issued by the Bangko Sentral ng Pilipinas , and corporate bonds issued by banks in compliance with BSP requirements are also eligible as investment products under PERA.

Equity securities included in the PSE index (PSEi) may be classified as eligible PERA investment products, provided that the PSE certify to the SEC that the equity securities met the requisites of being non-speculative, readily marketable, and with a track record of regular income payment to investors, the SEC said.

The SEC will then disseminate the PSE-certified list of PERA eligible securities comprising the PSEi through its website.

The SEC said it reserves the right to declare a security ineligible under PERA.

Created under Republic Act (RA) 9505, PERA is a voluntary retirement account that aims to promote capital market development and financial security for Filipinos here and abroad.

The investor whether locally employed (together with his employer) or self-employed, can contribute to PERA up to P100,000 per year, while overseas Filipino workers  can contribute up to P200,000. Married individuals  can contribute up to P100,000 for each spouse.

An employer’s contribution to the employee’s PERA may be deducted from its gross income up to the amount needed to complete the maximum allowable PERA contribution. An individual meanwhile is entitled to a 5 percent tax credit creditable only against income tax liabilities of the person.

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