SC eases regulations on private retirement schemes

KUALA LUMPUR: The Securities Commission (SC) yesterday announced liberalisation measures for private retirement schemes (PRS) to boost the industry’s competitiveness.

Aimed at enhancing long-term growth for PRS members, the measures will provide greater flexibility in asset allocation for PRS funds.

These include allowing conservative funds to invest in foreign markets and for PRS funds to invest in exchange-traded funds based on physical gold to increase asset diversification into alternative investments.

“The PRS industry offers Malaysians an alternative channel to supplement their retirement saving. These liberalisation measures were adopted after a review process undertaken by the SC, in consultation with the industry and the Private Pension Administration Malaysia to encourage PRS members to grow their investments.

“Meanwhile, PRS enables its members to access funds to ease their financial burden in times of need,” said SC chairman Datuk Syed Zaid Albar.

PRS is a voluntary long-term savings and investment scheme set up by SC in 2012 to help people save for their retirement.

There are eight PRS providers serving more than 455,000 members. As at end of last year, the total size of the industry stood at RM3.5 billion.

Given the longer life expectancy of the population, PRS providers are required to gradually move their members to a less risky fund in accordance with their age and to commensurate with the members’ risk tolerance.

This will reduce the market risk exposure for members who opt for default funds (growth, moderate and conservative) that are matched against their age.