PETALING JAYA: More people saved with Private Retirement Schemes (PRS) last year than in any previous years since the inception of the voluntary retirement saving schemes, said Private Pension Administrator Malaysia (PPA).
This is despite domestic and international economic challenges. Last year, the total number of PRS members grew 38% to 416,913 from 301,279 in 2017 while total net asset value (NAV) for PRS funds rose 20% to close the year at RM2.66 billion.
“Last year, I said it will not be easy to continually grow the PRS industry in the range of 30% annually, but we sustained the growth momentum in spite of 2018’s challenging environment. This means that more people are aware that PRS is a long-term savings scheme and are less worried about short term market volatility,” PPA CEO Husaini Hussin said in a statement.
Husaini said almost 40% of PRS members are aged 30 and below, which is an indication that more young adults are taking retirement planning seriously.
“The youth incentive has ended, but the drive to continue encouraging the youth to save for their future remains. We will continue to reach out to the youth through social media and community programmes, as well as collaborate with public and private universities across the country to improve financial literacy among students. PPA will also work with the industry to make it more affordable for the youth segment to start saving with PRS,” he added.
Last year, PPA launched PRS Online Enrolment to allow individuals to sign up and save via www.ppa.my. Prior to that, PRS members could already make further contributions to their PRS funds online through PRS Online Top Up, which was introduced in 2016.
Since its rollout, PRS Online has seen tremendous traction and more PRS members are now using the platform to manage their accounts. PRS members can also review and monitor their savings with their smart devices using the mobile app myPPA.
This year, PPA intends to introduce more value-added services and digital initiatives to provide PRS members an easy, convenient and secure avenue to automate their savings by setting aside a fixed sum for their retirement fund every month.
“This push into financial technology (Fintech) will be another step forward in shaping individuals’ savings behaviour positively. Another key area for PPA is advocating Corporate Malaysia to make retirement planning and financial well-being an essential component of workplace policy,” said PPA.
According to the administrator, awareness about the benefits of PRS to employers needs to be enhanced and PPA will be doubling its efforts to introduce PRS at work.
Some of these initiatives include employers contributing to the employees’ PRS accounts, facilitating bulk enrolments at workplaces and encouraging PRS contribution via salary deduction.
Husaini said PPA’s target for 2019 is to see PRS grow by a similar trajectory through all channels including digital initiatives, financial literacy programmes and corporate participation.
He said the concerted efforts by PPA, PRS providers and distributors, along with Securities Commission Malaysia as the regulator will help spur the PRS industry further.