The assurance of a good retirement

For many Filipinos, it is true what writer Robert Orben said: "retirement really does not change our lives that much. The biggest difference is that all those things you never had the time to do now become all those things you don't have the money to do."

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. Unlike their counterparts in developed countries such as the U.S. and Europe, Filipino workers generally look at retirement with apprehension as it translates to a loss of income and the lack of retirement benefits.

Take, for instance, the experience of OFWs. Apart from supporting the economy through huge foreign remittances, they provide for their families' present consumption - buying a house, paying for their children's tuition, setting up small businesses - leaving very little savings for their retirement.

They are not covered by the Social Security System ("SSS") retirement benefits. And those who do voluntarily contribute to the SSS cannot expect much in terms of monthly pension which averages P2,546.00 per month. Moreover, a World Bank study reported that reserves of the government-run SSS and the Government Service Insurance System ("GSIS") would run out by years 2011 and 2040, respectively.

The lack of a dependable retirement plan is true not only for OFWs but also for most of the domestic labor force. The country has a labor force of about 35.81 million, of which only 78% are members of government-initiated pension funds. This means that about 8 million Filipinos, including their dependents, will have absolutely nothing to look forward to in their retirement years.

To remedy the situation, I sponsored in the Senate the PERA bill which will supplement the existing government-sponsored pension scheme by setting up a privately funded retirement fund. It allows private individuals to set aside P50,000 a year, withdrawable when the contributor reaches the age of 55, and tax-exempt. It will encourage long-term saving and reduce our heavy reliance on the already overwhelmed publicly-funded retirement scheme.

With a pension scheme and the assurance of financial stability for many Filipinos during retirement, we allow them to enjoy the fruits of many years of labor.