ARTICLES
What is the Private Retirement Schemes (PRS) ?
The Private Retirement Schemes or PRS was initiated under the government Economic Transformation Program (ETP), to address the need for Malaysians to save more for their retirement, as the nation strives towards becoming a high income nation. The need for an additional voluntary retirement pillar to complement the Employees Provident Fund and other pension schemes has been recognized as a pressing social security issue, in view of the nation marching towards becoming an aging society by 2020.
“Malaysia becoming an aging society by 2020 with over 10% of its population above 60 years”
It has been projected that by then, over 10% of the nation’s population or 3.0 million plus persons will be above 60 years. The key concern is whether they will have adequate retirement income to provide and sustain them for their retirement years. If not, the nation will then have to address the socio economic ramifications of an aging society that is not prepared for their retirement.
The main concerns of retirement are having adequate, sufficient and sustainable retirement income, for retirees to live on for the duration of their retirement years. There is now a heightened awareness that one needs to pay attention to retirement savings, for those who are still in their earning years before joining the ranks of the retirees at age 60. However, the public needs to move beyond knowing towards taking the necessary actions to save for their retirement. What is also needed to help the public, is to have a secured, affordable and accessible retirement solution which they can implement for themselves.
“PRS – secured, affordable and accessible retirement solution”
It is therefore timely that the PRS was launched to provide a well regulated and affordable voluntary private retirement schemes, for the public to save more for their retirement. PRS is regulated by the Securities Commission Malaysia (SC), to provide a secured and supervised schemes for the public to save and invest for their retirement. As such, PRS provides a robust and safeguarded retirement schemes to facilitate long term retirement savings which will be drawn upon when the contributors reach their retirement. All PRS Providers and their funds are required to be approved by the SC before they can be offered to the public for enrollment. In addition, there are fund trustees to safeguard all PRS contributions. A unique feature of the PRS is that the schemes is centrally administered by the Private Pension Administrator Malaysia (PPA), to provide PRS member’s account management, ongoing servicing and to protect their interests
“Unique feature of PRS framework is the establishment of PPA as a central administrator ”
As a voluntary private retirement schemes, the PRS offers contributors choice to decide on the amount of regular contributions and select the PRS Providers to manage their retirement funds. Individuals have the choice to select the PRS funds to meet their retirement needs and have the flexibility, if the need arises to change or switch Providers and/or funds.
Copyright © 2016 by Private Pension Administrator Malaysia. No part of the above mentioned shall be disseminated, reproduced or used without the prior approval from PPA.
