KUALA LUMPUR: The assets under management (AUM) of the Private Retirement Scheme (PRS) — the voluntary long-term retirement saving and investment scheme — has jumped 79% to RM500 million, while its member base has shot up 52% to 100,000.
“This is a milestone achievement for the PRS industry to accomplish within a short time frame of less than two years,” said Datuk Steve Ong, chief executive officer of PRS’ central administrator — the Private Pension Administrator Malaysia (PPA) — in a press statement yesterday.
“With continued momentum, we are confident the industry can double up its 2014 membership base from 2013’s 65,000 members. With the year-end coming, the public will be rushing to take advantage of up to RM3,000 in tax relief for [their] contributions to PRS,” said Ong.
PPA noted that the significant membership jump was buoyed by the combined efforts of PRS industry players and PPA in building and promoting awareness for PRS, with awareness level expected to hit 35% by year-end from last year’s 25%.
There has been widespread take up of PRS across the country, with the top three locations being Selangor (33%), Kuala Lumpur (16%) and Penang (12%), it said.
And since the start of this year, there has been a substantial sign up among young adults due to the introduction of the PRS Youth Incentive for Malaysians aged 20 to 30 who contribute a minimum of RM1,000 to PRS each calendar year.
Presently, the 20 to 30 age group makes up 25% of PRS’ member base, up from 8% at end-December last year, exceeding PPA’s target of 20% for this target group by year-end.
“While the government’s RM500 incentive is a motivating factor, we also recognise that this is a sign youths are embracing the importance of starting their retirement planning as early as possible,” Ong said.
This article first appeared in The Edge Financial Daily, on October 3, 2014.