Thursday 28 Mar 2024
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The Private Retirement Scheme (PRS) is an effective way of preserving one’s wealth before retirement, especially with the upcoming implementation of the Goods and Services Tax (GST), according to Cassie Hee, a trainer with Public Mutual Bhd.

Hee said investment schemes like the PRS will help contributors hedge against inflation when the tax is introduced in April. She was speaking at a forum entitled “Rendezvous with Retirement” at the KDU Glennmarie campus in Shah Alam.

“Instead of investing in unit trusts, stocks or fixed deposits, one can start saving with the PRS, which has less inflation risk,” she added.

Hee said each PRS offers individuals a choice of retirement funds to invest in, based on their retirement needs, goals and risk appetite. “The options available are intended to enhance the long-term returns of members within a regulated framework,” she added.

The PRS is a voluntary long-term investment scheme that helps individuals accumulate savings for retirement. It is open to individuals aged 18 and above, including foreigners, whether they are employed or self-employed, as a supplement to their retirement savings.

The PRS complements the compulsory saving scheme provided by the Employees Provident Fund (EPF) and seeks to enhance the options available to Malaysians who want to supplement their retirement savings under a well-structured and regulated environment.

During the Budget 2014 announcement on Oct 25, 2013, Prime Minister Datuk Seri Najib Razak said a youth incentive of RM500 would be given to contributors who participate in the PRS to instil the importance of saving from an early age to ensure sufficient savings after retirement. This incentive will be made available for a period of five years, from 2014 to 2018.

Hee said the government will contribute, within a year, RM500 into the PRS account of youths who have contributed a minimum of RM1,000. “The RM500 is a one-off contribution by the government to encourage youth to undertake long-term savings for retirement.”

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