Ever since the Private Retirement Scheme(PRS) was introduced and launched on 18 July 2012 by Securities Commission, it has been the talk of the town and of the investment community because of the potential business opportunities from it.
As this is a new concept in Malaysia, the general public has started to gain more awareness through the newspaper, press, social media. But many still remain sceptical because of the element of risk and uncertainty.
We gathered the top 5 basic business and technical enquiries we have commonly being asked by our clients and shall present them in the PRS series.
What is a PRS ?
Malaysia, just like any other countries, will face the aging population syndrome which require medical and financial support in times to come. As at 2011, 5% of Malaysia population is of age 65+ and this figure is increasing to double digit by year 2020. (source : indexmundi, Malaysia age structure 2012)
Since most Malaysians either being employed in public sector as civil servant or private sector, there are only 2 financial schemes to support for the old age, namely pension for the civil servants and EPF(Employee Provident Fund) for the private sector employees.
Unlike the civil servant who will normally receive 50% of last drawn pay as pension amount monthly, the average savings in EPF as of age 54 for an active member in private sector is merely RM 166,416.(source : EPF annual report 2011). This is barely insufficient to last the retired members for next 10 years !
Have a look at the following statistics and see the alarming figure.