Kuala Lumpur, 26 January 2018
SC and Youth and Sports Ministry Collaborate in ‘TN50 PRS’ to Encourage Young Malaysians to Save for Future
The Securities Commission Malaysia (SC) and the Ministry of Youth and Sports (KBS) today announced a new collaboration under the National Transformation 2050 (TN50), called “TN50 PRS Youth Incentive” (TN50 PRS), to encourage Malaysian youths to save and invest for the future. The partnership was launched by Youth and Sports Minister Khairy Jamaluddin, witnessed by the SC Chairman Tan Sri Ranjit Ajit Singh and Private Pension Administrator Malaysia (PPA) Chairman Datuk Zaiton Mohd Hassan at the TN50 PRS Youth Event: Building savings for the future.
TN50 PRS aims to enhance greater awareness and understanding on the importance of early retirement planning and to encourage participation in Private Retirement Schemes (PRS) among the youths. This meets the aspirations of Malaysian youth, who want better retirement schemes and a more comprehensive social security system. In the past year, over 60,000 unique aspirations were collected during the KBS-led TN50 Youth Initiative, with more than 1.7 million youths engaged through various channels on-ground and online.
Reflecting on his interactions and conversations with young Malaysians nationwide, Khairy said: “I have listened to the aspirations of youths all over the country, and many have said that they would like to have a better quality of life and a comprehensive social security system. This reflects a very real eventuality as Malaysia will have an ageing population by 2050, with more than 15% of the population aged 60 or older by 2035. Not only are we becoming older as a society, we are also expected to live longer, which means we will need to have sufficient funds to sustain us. So it is imperative to start saving and future-proofing your finances.”
“When you’re young, especially if you’re still studying or have just started working, you will find that managing money on a small allowance or salary is tough. But you have to start somewhere. One of the most common financial mistakes people make is not thinking enough about their retirement. So I strongly urge young Malaysians to take advantage of schemes like TN50 PRS to actively take charge of their own futures today,” Khairy added.
Ranjit said: “Building the foundations for financial wellbeing means having control over one’s finances and having a safety net, in order to have financial freedom. When young people understand how to manage money, they are equipped with a skill that is key to achieving their aspirations. The strategic collaboration between TN50 and PRS today will create greater awareness and nudge the youth in taking this important step to secure their future. To complement this initiative, the PRS industry must continue its efforts to be creative to enhance its reach,” he said, welcoming the initiatives by the PPA with PRS industry to roll out the online platforms.
Under TN50 PRS, Malaysians between the age of 20 and 30 who contribute RM1,000 to any PRS fund will receive a matching contribution of RM1,000 from the government in 2018. This is a continuation of the government’s incentive which was first announced under Budget 2014 by the Prime Minister. Introduced in 2012, PRS is a voluntary retirement savings scheme that complements the mandatory occupational scheme of the Employees Provident Fund (EPF).
PRS Online, an online platform that allows direct subscription for PRS schemes through the PPA website (www.ppa.my), was also launched today. New PRS subscribers aged 30 years and below will enjoy zero sales charges with selected PRS providers when they sign up via PPA Online. PPA also launched a new mobile application for members to manage their PRS accounts.
Ranjit said that 2017 was a record year for PRS with the highest number of new members since the scheme was launched over five years ago. The total number of members grew by 36% to 301,279 in 2017, from 221,235 in 2016. Total Asset Under Management (AUM) of the 56 existing PRS funds rose by 47% to close the year at RM2.23 billion, from RM1.51 billion the year before. Youth segment accounted for 7% of total PRS membership in 2013, but the figure increased significantly to 28% as at Dec 2017.
SECURITIES COMMISSION MALAYSIA