|Datuk Zaiton Binti Mohd Hassan
Chairman & Public Interest Director
The Private Retirement Schemes (PRS) was established as part of the Government’s Economic Transformation Programme to accelerate the growth of the nation’s private pension industry. Set up as the third pillar of Malaysia’s multi-pillar pension framework, PRS forms an integral feature of the private pension industry with the objective of improving the living standards for Malaysians at retirement.
Reports have stated that Malaysia will be an ageing nation by year 2030 with 15% of our population reaching above 60 years old. Against this landscape, Malaysians will need to be better prepared financially for their retirement years. The PRS is designed as a long-term voluntary savings, complementing the mandatory retirement savings scheme by providing a unique platform to enable all Malaysians to set aside and invest additional savings for retirement.
To maintain or continue enjoying the same pre-retirement lifestyle and living standard during one’s retirement years, the World Bank recommends a two-thirds (66%) of our last-drawn salary as replacement income. As such, it is important that we set aside and save as much funds as possible while we are gainfully employed. The more you save the better you would be equipped financially for your retirement in your golden years. By contributing in PRS, one will also stand to benefit from the annual PRS tax relief and the TN50 PRS Youth Incentive which is part of the Government’s clarion call to all Malaysians, young and old, to pay attention and save adequately for retirement. Additionally, employers could also promote their employees retirement wellbeing by contributing in the PRS on behalf of their employees with up to 19% tax deduction.
Since the PRS was launched, the industry has steadily grown with the Private Pension Administrator Malaysia (PPA) undertaking to educate the public on PRS whilst serving and protecting PRS Members’ interests as the central administrator of PRS. It is PPA’s conscious effort to also ensure that all stakeholders are engaged to continuously develop the PRS industry further towards enhancing financial security for Malaysians retiring in years to come.
Datuk Zaiton Mohd Hassan