I’ve been teaching hiring VAs and OFS for 20 years now.
I thought that I had covered everything there is to cover.
Then I got this email:
My VA’s are SOOOOO good, and I admit that I feel sheepish about paying them less than someone in the US, when they are better in EVERY SINGLE WAY. (Though I am paying them more than they requested.)
I would love to offer a “retirement” package. I have noticed that my VAs don’t plan for the future. They live month to month, without regard for retirement.
Uhhh…YEAH! The fact that I haven’t heard anything about retirement from my team pretty much confirms that.
I was thinking of setting up a custodial account for them, and putting money aside (like a 401k), except that I am running it, and it’s pretty low key. I can reward them for greatness and longevity, and also help them.
Does this already exist? (No sense in reinventing the wheel).
I asked Julia about this, and she confirms that, yes, many Filipinos don’t think about retirement.
As to why she hasn’t brought it up, it turns out that retirement benefits are already built in when you’re paying into SSS and Pag-Ibig. I’ll let Julia explain:
Yes, we actually have existing retirement mechanisms.
Within our social security benefits system, a portion of our contributions automatically goes into a pension fund.
SSS has a retirement benefit that pays out our retirement fund either as monthly payments or as a lump sum upon retirement. To avail of this, we would need to make at least 120 contributions (10 years). The retirement benefit would depend on how much we pay into the system.
Pag-ibig (our socialized housing fund) also gives us members the option to withdraw our accumulated contributions and savings as a retirement fund if we have not taken out a housing loan or have already paid off our loans.
The Philippine government has just released something similar to a 401(k) called the PERA fund. It’s still new (launched in 2022), it’s voluntary, and offered only through banks.
Lastly, we also have private insurance companies (Manulife, SunLife, etc) that offer retirement funds. Like health insurance, we would pay into this monthly, quarterly, or yearly. These funds would usually come with some form of accident or disability insurance. And if we don’t touch it for 10, 15, or 20 years (depending on the terms), we can get the money back with some interest in a lump sum.
If you and your Filipino VA are already paying into SSS or Pag-Ibig, this means they already have a retirement fund.
If you want to learn more about other benefits you can offer your Filipino VA: Onlinejobs.ph/benefits.
John