Kuala Lumpur, 20 October 2010

SC explains private pension framework
Following the announcement by YAB Prime Minister and Minister of Finance in the 2011 Budget, the Securities Commission Malaysia (SC) is pleased to provide further information on the private pension framework to be launched by the end of 2011.

This framework for a private pension industry forms the third pillar in a multi-pillar pension framework that complements and will not affect the mandatory contribution to the Employees Provident Fund (EPF). It will provide contributors, who have sufficient financial resources, with options for extra voluntary long-term savings to supplement their retirement savings and enhance their post-retirement income. The framework will benefit individuals, whether employees or self-employed, as well as employers who wish to make voluntary contributions above the EPF mandatory rates on behalf of their employees. 

The private pension framework will allow suitably qualified fund managers of good financial standing, and with the requisite experience and expertise to offer dedicated retirement funds that cater to contributors’ varying investment needs, risk appetites and profiles. The framework will be supported by user-friendly administrative arrangements that will ensure administrative and cost efficiencies and facilitate contributor convenience. Underpinning this framework will be a strong regulatory structure and supervisory oversight to promote market confidence and safeguard the interests of contributors.

The proposed private pension framework is based on broadly accepted international principles for private pension regulation and supervision and takes into account a review of the various options within the pension landscape. It also considers experiences of other countries that have a successful private pension industry.

Details on the framework will be developed by an implementation task force led by the SC with other public and private sector participants.