Private Retirement Scheme (PRS) is a voluntary long-term investment scheme designed to help individuals accumulate savings for retirement. PRS seek to enhance choices available for all Malaysians, whether employed or self-employed, to voluntarily supplement their retirement savings under a well-structured and regulated environment.Each PRS offers a choice of retirement funds from which individuals may choose to invest in based on their own retirement needs, goals and risk appetite. The fund options under a PRS are intended to enhance long-term returns for members within a regulated framework. Assets of each PRS are segregated from the PRS Provider and held by independent Scheme Trustee under a trust.
EPP 6: Accelerating growth of the private pension industry – to align existing pension systems with demographic & socio economic changes
A high income nation must have a sound and sustainable social framework to ensure adequate retirement savings. Private retirement schemes form an integral feature of the private pension industry with the objective of improving living standards for Malaysians at retirement through additional savings of funds.
The PRS regulatory framework was developed by the Securities Commission Malaysia to accelerate the development of the private pension industry in Malaysia. The PRS will also add depth to the capital market as a source of long-term funding for various capital market activities and to enhance the role of the investment management industry as well as provide wider stimulus effect in contributing to the economic growth and development of Malaysia.
The PRS forms the 3rd pillar of Malaysia’s multi pillar pension framework and the right enabling environment is crucial for its success. The formation of PPA provides the central administration for the PRS.
Enhancing Pension Schemes
The PRS is an initiative under the Capital Market Master Plan 2 to accelerate the development of the private pension industry, which is designed to provide additional retirement funding. The PRS is expected to contribute towards establishing the 3rd pillar (voluntary) as part of the country’s robust pension scheme.
Disclaimer: No part of the above diagram(s) shall be disseminated, reproduced or used without the prior approval from PPA.