This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on November 2 - 8, 2015.

MALAYSIANS have not fully grasped the concept of retirement and are not preparing well enough for it, says Kenanga Investors Bhd CEO and executive director Ismitz Matthew De Alwis. He was speaking at the Sustainable Retirement & Aged Care Conference 2015, which was jointly organised by K&N Kenanga Holdings Bhd and Aged Care Group Sdn Bhd.  

“People tend to forget about making sure their retirement savings are enough for the rest of their lives. Over the years, when I tell people to save for retirement, they only talk about saving until the age of 60 and about needing RM1 million — and that’s it. But how will you spend that?” 

While Malaysians are aware of the need to save enough for retirement, they rarely think about their retirement years. “If you go to the man in the street and ask him: ‘Do you understand what is retirement?’ He will say, ‘Retirement means I get a pile of money, or retirement is how much money I will need to retire’, and that’s it,” says De Alwis.

“You will never hear them talk about their retirement years. They will tell you: ‘I will retire at 55’, or ‘Oh, I will be happy, I will be going on a holiday’ — that’s it. People do not look beyond their retirement, like from 55 to 60, or to 75 years.”

With Malaysia facing an ageing population, Kenanga and Aged Care Group are collaborating to address the need to invest and support the provision of affordable and quality aged care services. Kenanga is also working with Aged Care Group and other partners to introduce new options for retirement, such as the soon-to-be-launched CareTRUST.

CareTRUST allows individuals to allocate a portion of their personal, PRS or EPF savings or investments to ‘Care Trustees’, who will manage the funds allocated to their future retirement care, such as daycare centre fees, nursing home fees and retirement resorts. It also includes payments for consumables, care equipment and medical expenses. 

“We are at the final leg of coming out with CareTRUST. With the product, clients or people subscribing to it don’t have to worry or go looking for private products. It is not a product that is only from Kenanga, as we are working with more than 12 unit trust companies, more than five insurance companies and a number of PRS providers,” says De Alwis. 

“CareTRUST is a one-stop solution, so when clients subscribe to it, they don’t have to worry. We will help them to manage their accumulation level [before retirement] and the decumulation level after retirement.”

Aged Care Group CEO Carol Yip says the company joined in to introduce CareTRUST because it wanted to build a stronger connection with industry players. “You can see there’s a lot of people [at the conference]. Some are already in the industry, so we want to work with them. We do not want Aged Care Group to just work in a silo, but with all the operators out there and all the care service providers.” 

Aged Care Group will administer the provision of care for CareTRUST.

De Alwis says the retirement industry is still in its infancy, so the whole ecosystem needs to be developed. “It is something to be taken seriously as it will be a booming industry in 10 to 15 years.” 

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