PRIVATE RETIREMENT SCHEMES (PRS)
Development of the PRS Industry
With increasing life expectancy and rising living standards, many Malaysians find that their savings are inadequate to meet their retirement needs. PRS form an integral feature of the private pension industry with the objective of improving living standards for Malaysians at retirement through additional savings of funds. As long-term investment vehicles, PRS are designed to help enhance adequacy and expand coverage of retirement benefits to all segments of the population. It complements Malaysia’s mandatory retirement savings schemes. Contributions to the PRS are voluntary. Individuals (retail investors, self-employed and employees) or employers can participate as PRS contributors. Offering private pension benefits could be a tool for employers to attract and retain skilled talent. The PRS information set out in this publication includes a description of the framework, the key features of PRS and the regulatory safeguards. A number of frequently asked questions and answers are also set out in this publication.
The retirement landscape in Malaysia has been given a boost with the development of a PRS framework, which is a major deliverable of the Securities Commission Malaysia (SC) under the Capital Market Masterplan 2. Key components
PRS Distributors & Consultants
Private Pension Administrator (PPA)
PRS are offered by approved PRS Providers. Each PRS will include a range of retirement funds from which individuals may choose to invest in, based on their own retirement needs, goals and risk appetite. The PPA functions as a record keeping and resource centre for data on all transactions performed by contributors. It will facilitate transactions and promote efficient administration. The PPA will also act as a resource centre for data and research relating to the PRS industry in Malaysia. The assets of each PRS will be segregated from the PRS Provider and held by an independent Scheme Trustee under a trust. The SC regulates and supervises all intermediaries in the PRS industry, namely the PRS Providers, the PPA, the Scheme Trustees and distributors of PRS to ensure the proper functioning of the PRS industry and protects members, via prudential and investor protection requirements.
The SC is in the final stages of implementing the PRS framework – the PPA has been established and approvals have been granted to Schemes subject to the PRS Providers fulfilling certain conditions. The eight PRS Providers approved (as of 5 April 2012) are: AmInvestment Management Sdn Bhd; American International Assurance Bhd; CIMB-Principal Asset Management Bhd; Hwang Investment Management Bhd; ING Funds Bhd; Manulife Unit Trust Bhd; Public Mutual Bhd; and RHB Investment Management Sdn Bhd.
Prior to the sale of PRS to the public by end-2012, this is an important period for potential members to understand how PRS fits into the rest of their retirement planning and to arm themselves with information about the different PRS Providers and Schemes before contributing to PRS.
Key Features of PRS
Designed to provide choice and flexibility Encourages members to take control of their retirement savings •
determined by the amount contributed plus investment returns thereon. The aim of savings in PRS is to make the members’ savings grow over the long-term. Members
or to contribute to more than one PRS, offered by different PRS Providers. Being
making contributions to PRS. A
PRS Provider but do not specify a fund option. The default option would cater for...
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