Friday 29 Mar 2024
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KUALA LUMPUR (Feb 21): The Securities Commission Malaysia (SC) announced today that conservative funds under the Private Retirement Scheme can now invest in foreign markets. 

In addition, PRS funds are also allowed to invest in exchange-traded-funds based on physical gold to increase asset diversification into alternative investments, the commission said in a statement issued this afternoon.

The capital market regulator noted that the liberations aim at enhancing the competitiveness of the PRS industry. 

“The PRS industry offers Malaysians an alternative channel to supplement their retirement savings. These liberalisation measures were adopted after a robust review process undertaken by the SC, in consultation with the industry and Private Pension Administrator Malaysia, to encourage PRS members to grow their investments. 

Meanwhile, PRS also enables its members to access funds to ease their financial burden in times of need,” said SC chairman Datuk Syed Zaid Albar in the statement.

The SC pointed out that given the longer life expectancy of the Malaysian population, PRS providers are now required to gradually move their members to a less-risky fund in accordance with their age to commensurate with members’ risk tolerance. 

“This will help to reduce the market risk exposure for members who opt for default funds (growth, moderate and conservative) that are matched against their age,” it added.

Following Budget 2020, PRS members are now permitted to make pre-retirement withdrawals without incurring tax penalty for healthcare and housing purposes. 

PRS members are allowed to make withdrawals for self or immediate family members to cover 91 types of illnesses, including paying for medical equipment or medication for the approved illnesses. 

The withdrawal for housing can be used to finance building or purchase of a residential property or reducing a housing loan. 

PRS is a voluntary long-term savings and investment scheme set up by the SC in 2012 to help Malaysians save for their retirement.

There are currently eight PRS providers serving more than 455,000 members nationwide. As at end-2019, the total size of the industry stands at RM3.5 billion.

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