PRS represents Private Retirement Schemes. Basically PRS provides funds for individuals to invest with the aim of contributing to the pension. Like the EPF, it also allows employers to make contributions. However, participation in PRS is voluntary and provides more flexibility and investment options.
How does it work?
With a longer lifespan and improved living standards, many Malaysians find their savings insufficient to meet their retirement needs. PRS is an important feature of the private pension industry with the objective of improving living standards to help Malaysians during their retirement through additional savings.
As a long-term investment, PRS is designed to help increase sufficiency and expand the scope of retirement benefits to all segments of society. It is in addition to Malaysia’s existing mandatory retirement savings scheme.
Contributions to PRS are voluntary. Individuals – retail investors, self-employed, employees or employers can join PRS as contributors. Offering private pension benefits can be a way for employers to attract and retain skilled workers.
Why do you need retirement planning?
- 50% of retirees run out of their EPF savings within 5 years.
- 68% of EPF members aged 54 in 2014 had EPF savings of less than RM50,000
- While more than 90% of Malaysians aged 45 and above who want to retire in the next 5 years are unable to do so due to financial constraints.
For more information about Retirement Planning Malaysia, please visit https://www.vka.com.my/