According to him, meticulous planning must be undertaken by youths in order to prepare for their retirement needs
By D KANYAKUMARI / Pic By AFIF ABD HALIM
The assets under management (AUM) of the Private Retirement Scheme (PRS) totalled RM2.23 billion at the end of last year, said Securities Commission Malaysia (SC) chairman Tan Sri Ranjit Ajit Singh (picture).
“The total number of members grew by 36% from 221,235 (in 2016) to 301,279 (in 2017).
“That is 80,044 new members in one year and this led to the total AUM to rise by 47% (RM717 million) which pushed the AUM beyond the RM2 billion mark,” he said at the National Transformation 2050 PRS Youth Event last Friday.
He said that given challenges arising from higher medical and living costs and an increasingly ageing society, the same meticulous planning must be undertaken by youths in order to prepare for their retirement needs.
Ranjit and Youth and Sports Minister Khairy Jamaluddin last Friday launched the online portal for PRS, as well as the PRS Youth Incentive which offers a RM1,000 top up into the PRS accounts of youths aged between 20 and 30 who contribute RM1,000 into their account throughout 2018.
Youths below the age of 30 who sign up for PRS via the newly launched online portal will be exempted from all sales charges.
Khairy said a retirement scheme was necessary as Malaysia will become an ageing population by 2050.
“In 2035, there will be more people aged 65 and above compared to those under 15 years of age.
“Life expectancy, thanks to the advancement of medical science, will average at 80 and Malaysians are not ready for that. We are sitting on a ticking time bomb that will affect the nation’s policies.
“More than 90% of the accounts in the Employees Provident Fund will have less than RM50,000 and this will only last them for five years comfortably. What about the remaining 20 or 25 years?” he said.
Khairy announced that top graduates from the National Youth Training Institute will be given a RM1,000 incentive from the Youth and Sports Ministry in addition to the RM1,000 from the government.
“Besides that, national athletes who win in international games will have RM1,000 from their winnings channelled into their PRS accounts,” he said.
Khairy added that with PRS and the incentives offered, he hopes more youths will make the effort to begin saving for their retirement.
Private Pension Administrator Malaysia chairman Datuk Zaiton Mohd Hassan said over 27% of the PRS member base was made up of youths.
“It is a good growth, but with the incentives and with the launch of the online portal, God willing we hope 2018 will be another record year where the participation of youth members will match the others,” she said, adding that the SC was targeting big numbers.
Zaiton said PRS will never be made mandatory and stressed that it will remain a voluntary scheme.
PRS was first announced in 2014 by Prime Minister Datuk Seri Mohd Najib Razak, where youths aged between 20 and 30 were given an incentive of RM500 for a RM1,000 contribution.
During the tabling of Budget 2018, Najib announced that the incentive would be increased to RM1,000.