See Hua Marketing Sdn Bhd sales manager Aiman Ashari (left) and Hussaini are seen after launching the upcoming events in East Malaysia.
ALL working Malaysians – whether self-employed or otherwise – will one day face retirement and deal with the question of how much retirement will cost them.
Private Pension Administrator (PPA) Malaysia chief executive officer Hussaini Hussin said Malaysians should save at least one-third of their monthly salary for retirement purposes as the estimated expenditure post-retirement would be two-thirds of the final salary.
Recently, Bank Negara Malaysia highlighted that about 47 per cent of Malaysian youths have a very high credit debt, with 38 per cent of them also having applied for personal loans.
In 2017, more than 3,400 Malaysians between the ages of 20 and 30 sought advice and assistance from the credit advisory and debt management agency, AKPK – an agency set up by Bank Negara Malaysia to help individuals take control of their financial situation.
The Prime Minister’s Department indicated that over the past five years, a total of 60,463 Malaysians aged 18 to 44 declared bankruptcy, indicating that young people lack sufficient financial knowledge.
“The Private Retirement Scheme (PRS) is a voluntary long-term savings and investment scheme that allows members to bring their money to retirement age and is designed to help Malaysians save more for retirement. It is an added optional retirement investment for mandatory retirement plans and self-employed people.
“PPA is an independent, central administrator that provides services for PRS members. It provides members with one-stop account services and protects their interests. It is strictly regulated by the Malaysia Securities Commission to ensure that funds are professionally managed,” said Hussaini.
Husaini said since the introduction of PRS in July 2012, the number of members as of August this year has reached 348,143, which is an increase of 33.5 per cent compared to the same period last year.
The total Net Asset Value (NAV) reached RM2.46 billion, an increase of 3.6 per cent.
There are currently 20,000 registered PRS consultants across the country to provide Malaysians with investment advice.
He stated that PRS offers 56 funds managed by eight providers, mainly divided into two schemes – Conventional and Islamic Fund.
These funds are divided into four categories – Conservative, Moderate, Growth and Non-Core Fund – to meet different risk preferences and investment goals of the members. The initial amount needed to sign up for a PRS account varies from Provider to Provider, starting with a minimum amount of just RM100.
He said in order to encourage young people to start their retirement savings early, the government offers 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. So far, 125,000 young people have received this incentive. This award offer is valid until Dec 31, 2018.
“PRS is voluntary, so members are not forced to top up every month after saving the initial sum of money in the PRS. However, we encourage you to save regularly to build up your savings. Through Dollar Cost Averaging, you get to ride out market volatility. If the market is low, you will get more units,” he explained.
Members of the public can use the retirement calculator on PPA’s website www.ppa.my to find out how much money they need for retirement and whether their existing savings are sufficient.
Earlier this year, PPA also rolled out the PRS Online Enrolment facility which allows Malaysians to sign up for PRS in an easy, secure and convenient way through their smart devices.
To promote the new initiative, every 20th new enrollee who opens a PRS account through the website will receive PRS units worth RM100.
Existing PRS members can also take part in the campaign by referring new members to PRS, with every 20th introducer receiving RM100 in PRS units when their referrals successfully sign up through PRS Online Enrolment.
To open an online account takes just a few simple steps:
1.Set up your profile
2.Choose your preferred PRS Provider and PRS Fund
3.Pay through online banking
The online service has security features, including login and confirmation of payment, which must be verified by email and mobile phone.
To find out more, a PRS talk hosted by the See Hua Group will be held at Crown Towers in Pending, Kuching on Sept 29 from 9am to 1pm, and on Oct 27 at the premises of Kota Kinabalu Chinese Chamber of Commerce and Industry, from 2pm to 6pm.
The event is open to public. Those interested can register at http://gg/gg/shppa to book a seat. Entry is free, but limited to 200 seats on a first come, first served basis.
Hussaini will be on hand to explain on how to save more for retirement through PRS.
“We hope to raise public awareness on early savings and retirement schemes, and to attract more new members and encourage employers to participate in order to provide employees with double protection apart from EPF. In addition, companies can also enjoy up to 19 per cent tax deduction.”
Husaini also revealed that presently, about 600 companies have helped their employees prepare for retirement through PRS.
Employers can directly contribute to their employees’ accounts monthly, either as a loyalty reward, vesting scheme or as a deduction to help employees do the savings.
“We hope to double the number of East Malaysian members through the event. Currently, there are 40,000 members from East Malaysia, accounting for 13 per cent of PRS members.”
Parents are welcomed to bring their children for enquiries.
Those aged 18 can open an account and start saving as soon as possible. Parents can also invest in their children’s accounts at any time.
Ten participants will stand a chance to receive RM200 in PRS units on the day of the talk.
Those who sign up for PRS during the session will also receive gifts.