PPA calls for better retirement coverage
KUCHING: The Private Pension Administrator (PPA) calls on Sarawakians and Sabahans to be better prepared financially for retirement.
According to PPA chief executive officer Husaini Hussin, more than 50 per cent of Malaysians are not financially ready for retirement as pensioners continue to be affected by rising costs of living.
Most Malaysians still cannot afford to retire due to a lack of savings, he said.
“Statistics from the Employees’ Provident Fund (EPF) show that only 18 per cent of members have reached the targeted minimum savings set by the EPF, which is a total of RM228,000 by the age of 55.
“You will need to have sufficient retirement savings to last at least a minimum of 20 years, based on life expectancy of Malaysian,” he said during the Private Retirement Scheme (PRS) talk hosted by the See Hua Group yesterday.
This marks PPA’s first foray in East Malaysia via this partnership with the See Hua Group.
Husaini also warned that inflation will increase costs of living as well as erode purchasing power in the future.
“I think more need to be done (in terms of retirement awareness) in East Malaysia because of the vast geography,” he said when speaking to reporters yesterday.
“We tend to concentrate in main town areas like Kuching, Sibu and Miri. We are also restricted by the lack of presence of providers.”
Thus, the PRS is a suitable programme introduced back in July 2012 under the Economic Transformation Programme as a voluntary savings and investment scheme to help consumers save more for retirement.
Among key benefits of the PRS is that members can contribute regularly at least 10 per cent of their income towards their future.
It is also easy to invest with PRS offering a choice of providers, self-selected funds or default funds based on age group.
Currently, Husaini said a total of 350,000 members are investing in the 56 funds under PRS, with its assets under management amounting to about RM2.5 billion.
Between the period of January to August 2018, Sabah makes up 3.14 per cent while Sarawak marks 9.78 per cent of total member coverage for PRS. This brings total East Malaysia coverage to about 13 per cent.
“The scheme is open to anyone but the incentives are only open to Malaysians,” Husaini added.
“Even foreigners staying in Malaysia can invest in PRS, for example employers who want to give incentives to employers’ contribution to non-Malaysian expatriates, it is also possible.
“Malaysians living overseas can also save in Malaysia, so long as they can pay through a Malaysian bank account.”
The PRS is regulated by the Securities Commission and the schemes are safeguarded by the Scheme Trustees.
The current eight PRS providers to choose from are Affin Hwang Asset Management Bhd, AIA Pension and Asset Management Sdn Bhd, AmFund Management Bhd, CIMBPrincipal Asset Management Bhd, Kenanga Investors Bhd, Manulife Asset Management Services Bhd, Public Mutual Bhd and RHB Asset Management Sdn Bhd.
The government is also gearing the youth towards the PRS scheme by offering the PRS Youth Incentive.
For Malaysian youths aged 20 to 30, they can get RM1,000 in PRS units if they save RM1,000 in PRS. This award offer is valid until December 31, 2018.
— Husaini Hussin, PPA chief executive officer