Kuala Lumpur, 18 July 2012: Dato' Sri Mohd Najib Tun Razak, Prime Minister of Malaysia, launched the final component of the private retirement scheme framework today with the establishment of the Private Pension Administrator and the approval by the SC of the first set of Private Retirement Schemes.
At the launch of the Private Pension Administrator, the Prime Minister said the development of a private pension industry is crucial to the retirement needs of all Malaysians. "My fervent wish is to ensure that each and every one of our young productive adults, and indeed the future generations of Malaysians after them, will have enough savings and financial assets kept aside to be able to enjoy their retirement to the fullest. The goal is to have a robust and sustainable multi-pillar pension framework for the benefit of future generations of Malaysians" said Dato' Sri Mohd Najib.
The establishment of the Private Pension Administrator is the final component of the Private Retirement Schemes framework. This follows on from the establishment of the legal framework for the Private Retirement Schemes via amendments to the Capital Markets & Services Act 2007 in October 2011 and the issuance of Private Retirement Schemes Guidelines and Regulations in April this year as well as the approval of eight Private Retirement Schemes Providers.
Private Retirement Schemes is a voluntary retirement savings scheme structured by private sector fund providers which are licensed and approved by the SC. The funds under the Schemes are also subject to the SC's approval.
Private Retirement Schemes are intended to provide employees and the self-employed with an additional avenue to save for their retirement. A range of funds would be available to meet the individual's retirement goals and investment profile. It also offers an opportunity for employers to make additional voluntary contributions towards the retirement savings of their employees.
To incentivise participation in Private Retirement Schemes, individuals are granted tax relief of up to RM3000 and employers are provided tax deduction on contributions to Private Retirement Schemes made on behalf of their employees above the statutory rate and up to 19% of employees remuneration. Tax exemption is also provided on income received by the Private Retirement Schemes funds.
The first set of Schemes comprising 24 funds by several Private Retirement Schemes Providers was approved by the SC and will be available for offer to the public from September onwards. In line with this, the SC, Private Pension Administrator and Private Retirement Schemes Providers will conduct a series of educational and awareness programmes in the coming weeks to foster understanding and awareness of the Private Retirement Schemes framework and key features of the Schemes.
"As with any new industry, understanding of the product offerings are essential. It is important that contributors and potential members have all relevant information in order to make informed decisions" said Datuk Ranjit Ajit Singh, Chairman of the SC.
Puan Zaiton Mohd Hassan was named as the first chairman of the Private Pension Administrator. Zaiton is currently the Managing Director of Capital Intelligence Advisors Sdn Bhd. The other members of the Board are Datuk Nozirah binti Bahari, Dato' Dr Thillainathan A/L Ramasamy, Mr Ou Shian Waei and Encik Ahmad Zakie bin Ahmad Shariff.
A one-stop centre, the Private Pension Administrator will play an important role in the enabling infrastructure for Private Retirement Schemes by providing efficiency in the administration of the Private Retirement Schemes. Account holders will have easy access to information and ease of transfers.
The SC regulates and supervises all intermediaries in the Private Retirement Schemes industry from the Private Retirement Schemes Providers, the Private Pension Administrator and the Scheme Trustees, to the distributors of Private Retirement Schemes.