New Rules For OFW Hiring

New rules on OFW hiring issued
Saturday, January 19, 2008

Stricter rules on direct hiring of OFW was issued recently by the Philippine Overseas Employment Administration. The rules which takes effect on January 15, 2008 allows direct hiring of OFWs by foreign employers only upon approval by the Secretary of Labor and subject to screening of employers and employment contract verification by the Labor Attaché or the Philippine Embassy.

Direct hiring may be allowed only for members of the diplomatic corps and of international organizations, government officials of ministerial level, and employers who are hiring on one-time or trial basis. The number of employees to be hired directly shall not exceed 5.

Employers will likewise comply with stricter documentation and processing requirements which include the posting of repatriation bond in the amount of US$5000 per employee to guarantee the repatriation of the worker or of his remains, in the event of death, and performance bond of US$3000 per employee to guarantee payment of the employee's salary for the duration of the employment contract. The bonds should be secured from local bonding companies. They will also provide the employees with health and medical insurance.

Employers who do not want to comply with the bonding and insurance requirements or with the standard employment contract will not be allowed to hire OFWs directly. But they may hire thru licensed placement agencies which are willing to assume responsibilities over the employees, including payment of salaries and other employment benefits.

DOLE Secretary and POEA Board Chairman Arturo Brion announced that the adoption of a stricter policy on direct hires is aimed at strengthening the protection mechanisms for the OFWs.

OFWs with employment contracts and work visas issued after January 15, 2008 will be covered by the new guidelines. The new guidelines for direct hiring is posted at the POEA website (www.poea.gov.ph).

Source: http://www.dole.gov.ph/news/

Gusto Mo Bang Yumaman? (Video part 4)

Gusto Mo Bang Yumaman? (Video part 3)

PERA Bill

In March 2007, 9 years after its introduction in the Philippine Parliament, the Personal Equity Retirement Account (PERA) bill became law. Proponents of the new law claim it will encourage voluntary retirement saving and savings portability, promote capital market development, and generate long-term investments. To this end, a provident savings plan called the Personal Equity and Retirement Account will soon be established.

PERA contributors must be citizens of the Philippines, be of legal age, and hold a government-issued tax identification number. After January 2009, contributors will also enjoy a one-time 5 percent nonrefundable income tax credit. Contributors may own up to five PERA accounts; contributions made to each account will be tax exempt up to a maximum of 50,000 pesos (US$1,031) annually. Additionally, interest earned in PERAs and withdrawals made after the owner reaches age 55 will not be taxed.

A PERA contributor may receive a lump-sum distribution or lifetime monthly pension payments upon reaching age 55 and with at least 5 years of contributions. The law imposes early withdrawal penalties except in cases where PERA funds are used for accident- or illness-related expenses. Families of a deceased PERA contributor will receive the decedent's PERA account balance regardless of the contributor's age at the time of death.

The Department of Finance and the central bank will license an entity to manage PERA and invest funds in government securities, foreign currency deposits and investments, and nonspeculative stocks, with individuals making their PERA contributions through banks. Employers may also contribute to employees' PERAs as long as both employers and employees comply with either the Social Security System (SSS) rules or Government Service Insurance System (GSIS) rules. These two systems are described below.

First, SSS is the Philippines' compulsory social insurance system that covers the majority of private-sector workers. With some exceptions, most workers earning at least 1,000 pesos (US$20.99) a month who are aged 60 or younger must participate in SSS. According to government officials, over 1 million SSS pensioners will soon receive a 10 percent increase in their benefit payments because of the plan's improved financial status. Officials say that SSS is in such good standing that increases in individual contributions will not be needed to pay for the benefit increase.

Second, public employees are covered by one of four compulsory retirement plans under GSIS, depending on their date of entry to federal service. At least for now, however, they will not receive the benefit increase that SSS participants will receive.

source: http://www.socialsecurity.gov

PERA - Personal Equity Retirement Account

here's another investment option for us ofws'. PERA - Personal Equity Retirement Account, let's wait and see
how its going to be implemented.



Press Release
February 8, 2007

For benefit of OFWs, domestic labor force
SENATE APPROVES PRIVATELY-FUNDED RETIREMENT PLAN

The Senate, upon the motion of Senator Edgardo J. Angara, on Wednesday approved on third and final reading the Personal Equity Retirement Account (PERA) Bill, which provides for a dependable and sustainable retirement plan for Filipino workers.

Angara , Chairman of the Senate Committee on Banks and Financial Institutions, said that PERA will encourage long-term savings and reduce heavy reliance on the already overwhelmed publicly-funded retirement scheme under the SSS and GSIS.

Filipino workers generally look at retirement with apprehension as it translates to a loss of income and the lack of retirement benefits. The absence of a dependable retirement plan and thus the financial uncertainty that goes with it could make retirement a source of insecurity rather than comfort said Angara .

Take, for instance, the experience of Overseas Filipino Workers who make a huge contribution to our economy in terms of foreign remittances. Their remittances provide for their families present consumption buying a house, paying for their kids tuition, setting up small businesses but leave very little savings for ones retirement, he continued.

Angara added the country has a labor force of about 35.81 million, representing a 64% labor participation rate. Of this, only 78% are members of government-initiated pension funds: 26.49 million for SSS and 1.4 million for GSIS.

About 8 million Filipinos have no pension or retirement savings to look forward to.

With PERA, an individual contributor can make a total maximum annual contribution of P50,000.00 to his PERA account. The contributor shall be given an income tax credit equivalent to five percent (5%) of the total PERA contribution.

Income from the contribution as well as the eventual distribution of the PERA to the contributor shall be tax-exempt. This amount is withdrawable when the contributor reaches the age of 55.

With PERA, we are giving the hardworking Filipinos something to look forward to in their retirement years. By assuring their financial stability during retirement, we allow them to enjoy the fruits of many years of labor, Angara said.

source: www.senate.gov.ph