PETALING JAYA: The Malaysian Employers Federation (MEF) believes that more can be done to encourage the public to take up the private retirement scheme (PRS).
“The PRS is something positive for retirement but I think a lot of things need to be done for it to be more attractive and viable,” said executive director Shamsuddin Bardan.
At present, there is no guarantee on the capital sum invested, nor is there any guarantee of dividends.
“If there is no protection on the capital sum invested, then the PRS would become like any other trust fund,” said Shamsuddin.
Private Pension Administrator Malaysia (PPA) chief executive officer Datuk Steve Ong said the scheme was still in its infancy and could evolve in time to come.
“Over time, we will tweak the scheme when necessary. The role of the PPA is to conduct research and make recommendations to enhance the scheme for the members,” he said.
PRS contributors are entitled to a yearly RM3,000 tax rebate.
The PRS is a scheme proposed by the Government under the Capital Market Masterplan 2 to ensure that individuals adequately planned for their retirement years. It was launched in July last year.
The voluntary scheme is the third pillar of Malaysia’s multi-pillar pension framework. The first two are the civil servant pension scheme and the Employees Provident Fund (EPF).
The scheme is open to all individuals aged 18 and above, regardless of their employment structure. It also serves as an avenue for self-employed individuals who are not eligible to be members of the EPF, to plan for their retirement savings.
It had been earlier reported that based on the estimated six million employees and two million self-employed adults in Malaysia, the private retirement industry could potentially be worth some RM18bil.
The eight firms to offer the PRS include AmInvestment Management, American International Assurance, CIMB-Principal Asset Management, Hwang Investment Management, Kenanga Investors Bhd, Manulife Unit Trust, Public Mutual, and RHB Investment Management.