The PERAA Board of Trustees

1. What is the composition of the Board of Trustees?
2. How are Trustees elected?
3. Who elects the PERAA Trustees?
4. How about the trustees representing the three associations - PACU, CEAP, ACSCU?
5. What is their Term of Office?
6. How is the Board compensated?

Investment of PERAA Funds

1. What are the investment principles of PERAA?
2. What is the rationale for multiple external fund managers?
3. What are the types of investments that the PERAA fund is presently invested into?
4. How do we evaluate the performance of the total PERAA fund?

Membership

1. Who may become Participating Institutions (PIs) of PERAA?
2. How can a school apply for membership?
3. How about employee membership? Who are qualified for coverage?
4. How can a covered member get an ID card?

Benefit Claims and Loans

1. Who are qualified to avail of the Multi-Purpose Loan (MPL)?
2. How can a member avail of the maximum loanable amount for MPL?
3. What benefits can a member get at resignation?

General Information

1. What are the advantages of PERAA compared to other plans?
2. Who are eligible in the search for The Outstanding PERAA Members (TOPM)?
3. How can a PI qualify as Outstanding Participating Institution contender?
4. What reports are issued by PERAA to members on fund status?

Payments

1. When should current contributions be paid to assure full earnings?
2. How are payments made?
3. What is the purpose of the Premium Remittance List (PRL) and Loan Remittance List (LRL)?
4. When should premium payments be made?

The Board of Trustees shall be composed of eleven (11) members as follows:

a) One (1) representative or nominee each from the Association of Christian Schools, Colleges and Universities (ACSCU), Catholic Educational Association of the Philippines (CEAP), and the Philippine Association of Colleges and Universities (PACU) and who are acceptable to the Board of Trustees of PERAA;

b) Six (6) members from Participating Institutions who are among the nominees of the Board of Trustees of PERAA and subsequently, elected at-large by Participating Institutions: three (3) of whom shall be regional representatives, one for Luzon, another for Visayas, and the other for Mindanao; and the three (3) others shall be Trustees at-large;

c) The President of the Private Education Retirement Annuity Association (PERAA) as ex-officio member with voting rights and privileges;

d) The head of an appropriate government agency in education acceptable to the Board of Trustees of PERAA as a member with voting rights and privileges. (As Amended on November 4, 1994)

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How are Trustees elected?

The six (6) Trustees referred to in 'b' above shall be elected at-large from the list of nominees submitted by the PERAA Board.

The first three (3) nominees for regular election receiving the highest number of votes shall be elected at-large. After the Trustees at-large had been elected, the nominees with the highest number of votes from among the nominees within the specified region shall be deemed elected regional trustee.

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Who elects the PERAA Trustees?

Participating Institutions (PIs) shall elect the six trustees provided, however, that each PI shall have only ONE (1) vote for every One Thousand of Accumulated Value registered in its name in the books of PERAA as of the last valuation date immediately prior to election date.

Each PI shall vote either in person or through an authorized proxy. A proxy is valid only for a particular election. Cumulative voting shall not be allowed.

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How about the trustees representing the three associations - PACU, CEAP, ACSCU

Trustees representing the three associations are appointed by the associations subject to the acceptance of the PERAA Board.

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What is their Term of Office?

The term of office of elected and appointed trustees shall be four years while that of the head of an appropriate government agency in education shall be co-terminus with the term of his office unless the PERAA Board decides otherwise.

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How is the Board compensated?

The PERAA Trustees shall not receive remuneration for their services nor shall they be required to give any bond or security for the performance of duties.

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There are certain basic principles and policies which govern the investment operation of PERAA. These principles are:

The trust nature of PERAA funds - The funds of PERAA are trust funds, held and administered for the benefit of its individual members, and to which the PERAA Board is accountable through the participating institutions.

Maximizing returns consistent with prudential safeguards - As much as possible returns to investment shall be maximized, consistent with prudent management. Prudence suggests that full and prompt recovery of an investment is paramount, except obviously in the intrinsic nature of equity placements.

Avoidance of special financial programs for members - Special programs which do not benefit all the members but which cater to a select few shall be avoided, whenever possible. If deemed necessary by the PERAA Board, such program shall be charged the same interest rates that PERAA would otherwise obtain on its regular commercial placements.

Avoidance of special financial programs for participating institution - Similarly, certain special loans, like bridge financing to member schools, will be permitted on a case to case basis, but will be subject to the same interest rates, safeguards and security as regular commercial loans. PERAA shall also desist from the management of special programs, such as the fund management of particular institutions, since a conflict of interest might result in preferential fund placements.

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What is the rationale for multiple external fund managers?

The use of multiple managers has two basic reasons:

First, risk management - drawing wisdom from old saying, do not put all your eggs into one basket.

Second, maximizing growth/returns on investments - no external fund manager should feel secure in its Investment Management Agreement, but should always feel the threat of replacement for inadequate performance.

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In general, investment placements may be classified into several general categories: (a) debt instruments, (b) corporate equity, and (c) real estate.

In general, debt instruments shall be preferred over the acquisition of corporate equity. The maximum exposure allowed for equity is 20% of the fund, the rest may be invested entirely to fixed income securities.

For diversification, however, we have made placements in US dollar-denominated instruments. And, so far trading in foreign currency bonds has realized good returns for the fund.

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The total fund is evaluated from time to time, but in any case at least three times a year at the end of the months of August, December and in April immediately after the end of the fiscal year.

The market does not have a common rule by which the performance of any fund is being measured but several techniques are possible:

1. the competition benchmark approach - the performance of the
   fund is being compared to similar retirement fund of the same period,
2. the treasury bill yield approach - comparing yield to the appropriate treasury bill rate,
3. the minimum acceptable yield approach - minimum performance is expected to be that which will at least equal the average monthly treasury bill rate for the same period.

As a rough rule of thumb, a good performance is 6% above the average inflation for the same period.

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All private educational institutions, foundations, organizations, etc. whose primary function is in aid of education.

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1. Submit a letter of intent for participation to the PERAA Board and attach a document indicating registered name of institution;
2. Undergo briefing and orientation;
3. Adopt a Retirement Plan Resolution (RPR) and submit it with the other documents required (available upon request) for evaluation;
4. Upon completion of all documents, pay the initial dues - BIR Fee, Actuarial Fee & Retirement Premiums
   

Who are qualified to avail of the Multi-Purpose Loan (MPL)?

Employees of participating institutions under a contributory scheme with up-to-date contributions and who have at least 36 monthly contributions are qualified to avail of the Multi-Purpose Loan.

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How can a member avail of the maximum loanable amount for MPL?

A member can avail of the maximum loanable amount of P 25,000 if the accumulated value under his personal share is at least P 32,000 and the school has an available allocation for Multi-Purpose Loan.

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What benefits can a member get at resignation?

A member can either apply for Repurchase Benefits or Separation-from-Service Benefits at resignation. Under Repurchase Benefits, the member is entitled to 100% of the employee's share and a portion of the employer's share depending on the vesting policy of the school. Under Separation-from-Service Benefits, the member is entitled to 100% of the employee's share and the employer's share is retained in the account of the employee (to earn interest) and will be released at early retirement age stipulated in the Retirement Plan Resolution of the school.

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The members' fund both active and inactive continue to grow and earn the same rate of interest.

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Who are eligible in the search for The Outstanding PERAA Members (TOPM)?

Employees with noteworthy achievements, who have been contributing members of PERAA for the last 3 years and who are nominated by the employer are eligible for the TOPM search.

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The criteria used in determining the winners are: increase in gross contributions (last fiscal year and last five years); increase in new members, per capita accumulated value and 5-year increase in AV.

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What reports are issued by PERAA to members on fund status?

PERAA reports to administrators, through the Annual Report which contains the financial statements certified by an external auditor. An individual Statement of Fund (ISF) is prepared for EACH member employee and a summary of these statements (Summary per Employee Report or SER) are issued to the employer.

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Contributions should be received by PERAA within the month paid for.

All payments should have a Premium Remittance List (PRL) In case of on-line payment, the PRL and Validated Deposit Slip should be faxed or mailed directly to PERAA.

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What is the purpose of the Premium Remittance List (PRL) and Loan Remittance List (LRL)?

These lists specify the name of the employees and the corresponding amount of premium/amortization to be credited to their names. Without the lists, the payments will become deposits and not credited to the employee's account.

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When should premium payments be made?

For FULL EARNINGS, monthly payments should be received by PERAA within the month paid for while other payments should be made before the period paid for (e.g. Trimestral Payments to be paid before the trimester).

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