16 thoughts on “How to open a PERA account with analysis of charges

  1. Hi George! So what did BPI tell you as the benefits of having a PERA account? As much as I want to try it too, it seems to me that it’s still more cost-efficient to just invest directly in stocks and mutual funds – similar with Jill’s concerns. Also, I think one of the benefits is supposedly tax shields but I’m not sure how that happens. Any ideas? :/

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    1. Hi Maven, I don’t advocate investing exclusively in a single instrument. I still hold my stocks in certain companies and do enjoy the occasional cash dividends
      Investing doesn’t have be exclusive (parang relationship haha).

      if one has excess funds though which aren’t needed in the short-term, and one desires for retirement pension (as alternative or supplement to current SSS /GSIS), the PERA may be a good alternative. I wanted to try it for two main reasons (1) retirement proceeds are exempt from estate tax and (2) the tax credit certificate (TCC).

      Legal implications for (1) – proceeds should you die, flow directly to heirs without need of proof of payment of bir estate tax. Simply, bpi will be required to immediately release such funds to my heirs.

      for (2), the PERA administrator bank is tasked with applying for your TCC. you may then use such TCC to reduce the amount of your taxable income for the year. Alternatively, you invest pre-tax money and that’s always fun! If you’re in the private sector, I think the push is to arrange for the employer to pay a counterpart/employee match amount. You’ll have to negotiate that with your employer I.guess.

      #1 remains to be seen. For #2, I will be emailing bpi sometime before December to ask them for my TCC. Hopefully this will result to a lower withheld income tax. Will update you guys how it will go! 😊

      While there are alternatives available such as life insurance or variable life insurance which claim to be invested in equities, these have more drawbacks than positives for me such as slow growth, non-transparency where funds are invested and dubious charges

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      1. Thanks for your inputs, George! Fully understand #1 and it is similar to VULs and Life insurance in general. I would love to know how #2 pans out, especially for employees like myself who have taxes withheld by our companies automatically. The matching would be great but i do think it will come later. 😛

        Will stay tuned for your updates! 🙂

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    1. Hi frt, it’s BPI Wealth Management who handled my account opening and not a specific branch. You may try what I did.
      After I emailed BPI (through their website see link in article), it was BPI’s employee here in Cebu who got in touch with me. Meetings are held at your preferred BPI branch (or wherever branch the BPI investment counselor is assigned) Cebu only acts to coordinate submission of your docs to BPI Manila because the BPI PERA-Accredited people are only Manila-based for now. NOTE that no money changes hands. ONLY DOCUMENTS are submitted. BPI only credits your bpi account.

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  2. I’m still waiting for more players to enter as administrator. Hopefully by then, the market will be more competitive and the administration fee will be way below 1% of contribution. I swear, the fees we’re slapped with when investing in the Philippines are ridiculous! That’s why we need more people to invest and more investing companies to foster robust competition.

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    1. Adopting a wait and see stance for now? 😃
      Fees can be steep for piece-meal investing Jill. While one may contribute as low as PhP 1,000.00 per month, this only increases the administrator’s profit. So I opted a large cash out upon opening of account. I willingly subjected myself as a guinea pig just to see how this PERA is implemented in reality 😃

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