IMAGINE this. You’ve worked your whole life and finally reach the retirement age of 60 only to discover the savings you’ve amassed since entering the workforce is not sufficient to sustain the lifestyle you’ve grown accustomed to.
How will you support yourself then? The thought of the lack of funds is scary, isn’t it?
This need not be the case if there was proper retirement planning, said Private Pension Administrator (PPA) Malaysia chief executive officer Husaini Hussin.
“Students and fresh graduates may believe they have time on their side when it comes to saving for retirement. But in reality, you are never too young to start.
“You have a longer horizon to build up savings when you start young. Saving regularly will allow you to ride off any market volatility,” he noted after signing PPA’s inaugural Memorandum of Understanding (MoU) with Universiti Tunku Abdul Rahman (UTAR).
UTAR president Prof Datuk Dr Chuah Hean Teik signed the MoU on behalf of the university.
UTAR vice-president for Internationalisation and Academic Development Prof Dr Ewe Hong Tat and PPA head of marketing and communication Serena Lim witnessed the signing ceremony.
Both parties collaborated in a bid to improve the level of financial literacy and boost awareness of Malaysians – especially students and graduates who are about to enter the workforce – on the importance of retirement planing via the Private Retirement Schemes (PRS).
Approved by the Securities Commission Malaysia, the PPA is the central administrator for the PRS, tasked to administer and promote growth of the PRS industry.
Husaini said the PPA, which has been active in engaging Malaysians through roadshows and campaigns on retirement planning and saving, would be able to reach a wider audience starting with staff, students and residents around UTAR through the agreement.
“Under the MoU, we will collaborate to undertake research projects on the retirement landscape, hold talks and seminars on retirement planning.
“Selected UTAR students will also have the opportunity to be part of PPA’s internship programme,” he said.
He then called on more youths to take up the PRS Youth Incentive, which entitles those aged between 20 to 30 to receive a one-off RM1,000 in PRS units from the Government should they save a total of RM1,000 in PRS. This offer is only available until Dec 31, 2018.
“As of July 31 this year, there were 342,730 PRS members with 32.7% of them aged 30 and below.
“We hope to see more enrolments by our target group which are those between the ages of 20 and 30,” he said, adding that the PRS also offers tax relief for citizens, including those past retirement age, who are employed.
The PRS, said Husaini, is a voluntary long-term savings and investment scheme designed to prepare Malaysians for retirement.
“Any taxpayer who invests in PRS can claim RM3,000 tax relief - reducing their taxable income,” he pointed out.
He added that employers are also eligble to claim tax relief of up to 19% through PRS.
Sharing Husaini’s sentiment, Prof Chuah said everyone should be mindful of their retirement plans.
“It is important to have savings and to plan beforehand. I have come across many friends who only begin to think about who is going to support them after they’ve retired,” he shared.
Describing the MoU as a “mutually beneficial partnership”, Prof Chuah said it will help staff and students prepare for their future.
“Through this collaboration, we hope to instil these values in our students. As an educational institution, we are preparing students for their entire life.
“We want them to be ready to join the workforce, but we would also like them to be prepared for life after retirement,” he said.
Noting that the PPA and UTAR have had many collaborative activities prior to signing the MoU, Prof Chuah said the varsity is looking to incorporate retirement planning lectures into its current syllabus to expose students to all the various pension schemes available.
He added that UTAR’s Centre for Extension Education with the PPA would regularly hold free talks, workshops and seminars for the general public in order to disseminate the information to as many people as possible.
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