Frequently Asked Questions

1. What is PERA?

PERA is the acronym for PERSONAL EQUITY and RETIREMENT ACCOUNT. This is a voluntary retirement account, which an individual can set up for his/her exclusive use and benefit. Such account shall be invested solely in Qualified/ Eligible PERA Investment Products.


PERA was signed into law on August 22, 2008 under Republic Act No. 9505, also known as the PERA Act of 2008, which was enacted to establish a legal and regulatory framework for voluntary personal retirement plans as a means to promote savings mobilization and capital market development, to contribute to long-term fiscal sustainability through the provision of long-term financing and to reduce the need for social pension benefits. As such, the PERA is in the nature of long-term investments similar to other retirement plans.

2. How can an individual qualify to open a PERA and be a CONTRIBUTOR?

An individual who (1) has the capacity to contract and (2) possesses a Tax Identification Number (TIN) can already qualify to open a PERA and be a CONTRIBUTOR.

3. How are PERA Contributors classified?

PERA Contributors can be classified as either Local or Overseas Filipino.


A Local PERA Contributor is a Filipino citizen who is working or deriving income from the Philippines.

An Overseas Filipino PERA Contributor refers to:

a. An individual citizen of the Philippines who is working or deriving income from abroad; or

b. An individual who retained or reacquired his Philippine citizenship under RA 9225 (Citizenship Retention and Reacquisition Act of 2003) and is working or deriving income from abroad.

4. How does an individual open and contribute to a PERA?

The individual also referred as the “CONTRIBUTOR” will go to an accredited ADMINISTRATOR to open his PERA. A maximum of five (5) PERAs at any one time can be opened and maintained by the Contributor provided that he has only one (1) Administrator for all his PERAs. Each PERA shall be confined to one investment product category only.


Once the PERA has been opened, the “CONTRIBUTOR” can now make contributions to his/her account on a regular basis or at his/her option for investment purposes. Employers may also contribute to its employee’s PERA but only up to the extent of the amount allowable to the CONTRIBUTOR.


For married Overseas Filipinos (OFs) who cannot directly open a PERA, his/her legitimate spouse or child based in the Philippines may represent him/her in opening a PERA.

5. What amount can be contributed to a PERA?

The “CONTRIBUTOR” may decide how much and how often he/she will put in his/her PERA account following the minimum requirements set by the Administrator or the Product Provider, as may be applicable AND the maximum annual qualified contributions set under the law:


Contributor Classification Maximum Annual Qualified Contribution

Local PERA Contributor

Php 100,000 per calendar year

Overseas Filipino (OF) PERA Contributor

Php 200,000 per calendar year


Contributions to the PERA amounting to more than Php100,000 or Php200,000, as the case may be, shall not be accepted by the Administrator under the PERA.

6. What benefits can a “CONTRIBUTOR” enjoy from PERA?

A “CONTRIBUTOR” may enjoy the following PERA benefits:

a. On his/her PERA contributions / investments:

  1. Tax exemption privileges from the earnings of all PERA investments
  2. 5% tax credit from his/her contributions
  3. In case the employer of the Contributor contributes to his PERA, the qualified employer’s contribution to its employee-contributor’s PERA shall not form part of the employee-contributor’s taxable gross income. Hence, that qualified contribution from the employer is exempted from the withholding income tax of the employee-contributor whether on compensation or on fringe benefits.


b. Upon retirement:

  1. Upon reaching the age of 55 and with a minimum of five (5) annual contributions, the “CONTRIBUTOR” has the option to avail of his retirement benefits free of tax or may choose to avail it later.
  2. The “CONTRIBUTOR” may choose to avail of his retirement benefit in lump-sum, through regular pensions or a combination thereof.

c. Upon death, disability or sickness:

  1. In cases of permanent disability or extended sickness lasting more than 30 days, the “CONTRIBUTOR” is allowed to withdraw a part or his entire PERA fund without penalties.
  2. Upon death of the “CONTRIBUTOR”, distribution of PERA withdrawal proceeds to qualified beneficiaries are also exempted from estate taxes.


7. What happens if a PERA Contributor makes an early withdrawal?

Given that the main purposes for the establishment of PERA are:

  1. to encourage an individual to set up his/her own personal retirement account for his/her exclusive benefit upon retirement and;
  2. to provide certain tax incentives for individuals who will open, contribute for at least five (5) years and withdraw the PERA at least at age 55


it is therefore important to understand that PERA is long-term in nature and that contributions made to a PERA shall remain invested until the qualified distribution time when the contributor may avail of the funds and enjoy its tax privileges. As such, any withdrawal, in full or in part, prior to the qualified distribution time is discouraged and will be subjected to the following Early Withdrawal Penalties:

  1. The five percent (5%) tax credit given to the Contributor for the entire period of the PERA;
  2. A flat rate of twenty percent (20%) based on the total income earned by said account from the time of its opening/creation up to the time of withdrawal.

However, early withdrawals due to the following instances are EXEMPT from penalties:

  1. Withdrawal proceeds are transferred to another PERA Investment Product Provider and/or another PERA Administrator
  2. Accident or illness-related hospitalization expenses in excess of 30 days (should present a notarized doctor’s certificate.)
  3. Total Permanent Disability (should present a certification from the pertinent government agency that the Contributor has been subsequently rendered permanently totally disabled)
  4. Distribution of withdrawal proceeds to beneficiary/ies in case of Contributor’s death
8. Where can the contributions made to PERA be invested in?

The funds contributed by the CONTRIBUTOR to his PERA are to be invested solely in “Qualified/Eligible PERA Investment Products” duly approved by the concerned Regulatory Authority which could be any of the following:


a. unit investment trust funds

b. mutual funds

c. annuity contracts

d. insurance pension products

e. pre-need pension plans

f. shares of stock or other securities listed and traded in the local stock exchange

g. exchange-traded bonds

h. government securities

i. any other category of investment products or outlets which the concerned Regulatory Authority may allow for PERA purposes

9. What are the general risks associated to PERA Investment Products?

When it comes to investing, it is important that the investor should be able to match his reward expectations to the kind of risks that he is potentially taking. Below are some samples of risks, which are important to understand and which may be inherent in varying degrees to the PERA Investment Products chosen by the contributor:

• Interest rate risk

• Reinvestment risk

• Credit/Default risk

• Business risk

• Country risk

• Foreign exchange risk

• Market/Price risk

• Inflation risk

• Liquidity risk


When PERA Investment Products become available, their category, classification and specific risks will be disclosed to the investing public.

10. Who are the major PERA participants and what are their respective roles?

The major PERA participants are the following:

Administrator – an entity which has been pre-qualified by the concerned Regulatory Authority (BSP, SEC or IC) and accredited by the Bureau of Internal Revenue (BIR), and is responsible for administering and overseeing the PERA of the Contributor.

Custodian – a separate and distinct entity unrelated to the Administrator, accredited by the BSP to take custody of PERA assets. PERA Custodians are classified as Cash Custodians and Securities Custodians.

Cash Custodian - receives all funds in connection with the PERA; receives instructions from the Administrator with regard to the custody and disposition of all PERA funds and reports to the Contributor, the Administrator and the concerned Regulatory Authority all PERA financial transactions and funds.
Securities Custodian - maintains custody of all securities, evidence of deposits or investment; receives instructions from the Administrator with regard to the custody and disposition of non-cash PERA assets; and reports to the Contributor, the Administrator and the concerned Regulatory Authority all PERA financial transactions and funds.

Product Provider - an entity that provides and sells accredited PERA investment products

Investment Manager (optional) – a regulated entity accredited by the concerned Regulatory Authority and authorized by the Contributor, pursuant to a written investment management agreement, to make investment decisions for his PERA.

11. What is BDO's role as PERA Administrator?
  • BDO was the first institution in the country to be given approval to become a PERA Administrator, after hurdling the pre-qualification requirements by BSP and being accredited by the BIR. Our functions as a PERA Administrator are as follows:

1.  Educate and inculcate financial literacy in the Contributor
2.  Open the PERA account/s in the name of the Contributor
3.  Receive and record cash contributions from the Contributor for investment in PERA products
4.  Implement the Contributor’s and/or his Investment Manager’s instructions on where to invest the PERA funds
5.  Ensure PERA contributions are invested and reinvested
6.  Observe PERA contribution limits for tax purpose and enforce withdrawal limits
7.  Report to BIR and the Contributor the PERA contributions and withdrawals
8.  Compute the values of investments and report them to the Contributor, the concerned Regulatory Authority and the BIR
9.  Custodize cash and securities comprising the PERA with the custodian
10. Apply for BIR Income Tax Credit Certificates for the Contributor
11. Ensure taxes and penalties relative to PERA are paid to the government
12. Keep and consolidate records of all contributions, investments, earnings, expenses and withdrawals from the PERA, the valuations of the PERA assets and make regular reports to the Contributor and concerned Regulatory Authority

12. What are the PERA Products offered by BDO?

BDO, as a PERA Product Provider, offers the following qualified/eligible PERA Investment Products:


The BDO PERA UITFs are duly approved by the BSP and as such, the BIR has granted tax-exempt privileges on all income earned from the investments and reinvestments of the above PERA Investment Products.


To know more about each of the BDO PERA UITFs, please click on the particular Fund's name from the list above.