Increasing the awareness of retirement planning

Front row, from third left: Centre for Sustainable Development and Corporate Social Responsibility in Business Chairperson Dr Mohammad Falahat Nejadmahani, Mohamed Farith and Faculty of Accountancy and Management lecturer Dr Tan Kok Eng with participants

The Centre for Sustainable Development and Corporate Social Responsibility in Business (CSDCSR) organised a workshop titled “Private Retirement Scheme (PRS) Financial Freedom through Investing – Let’s Begin Young” on 25 January 2019 at UTAR Sungai Long Campus. The workshop was conducted by Private Pension Administrator Malaysia (PPA) Learning and Engagement Manager Mohamed Farith Mohamed Jamal.

The objective of the workshop was to educate students on the functions of PRS and how it can be used to optimise their retirement savings. It also aimed to provide a clear explanation on the structure and value propositions as well as types and features of PRS funds offered by the PRS providers.

Mohamed Farith introducing himself

Mohamed Farith began his talk by first addressing the retirement reality in Malaysia. He addressed his concern over the shocking reality of many not being prepared for retirement. He said that less than 40% of Malaysians are financially prepared to retire.

“According to the statistics provided by Employees Provident Fund (EPF) 2018, less than 18% of members have reached the targeted minimum savings (RM240,000 by age of 55) set by the EPF board and more than two-thirds (68%) of EPF members aged 54 had less than RM50,000 in their EPF savings. These statistics simply prove that many senior citizens still cannot afford to retire,” he said.

He continued by explaining why one needs to save for their future, “These are the three main retirement concerns; adequacy (how much), sufficiency (how long) and sustainability (how strong). It is recommended that we should have two-thirds of replacement income when we retire. The life expectancy of a Malaysian male is 72 years, whereas a female falls somewhere in between 76 to 77 years. Hence, we need to have sufficient retirement savings to last at least 20 years. You should also take into consideration the inflation that might occur in the future. Inflation will increase our cost of living and erode our purchasing power.”

He added, “PRS is a voluntary long-term savings and investment scheme designed to help individuals save more for their retirement. It is an initiative under the Capital Market Master Plan 2 to accelerate the development of the private pension industry.” He then gave a thorough explanation of the structure and features of the PRS funds and its providers. He also introduced the PPA retirement calculator to the audience and demonstrated how it works by giving various examples.

At the end of the talk, he provided some tips to the audience. “I would encourage you to start early. The earlier you start, the lesser you pay and the higher you gain. Also, a long-term plan reduces volatility. So start your retirement plan while you’re still young,” he advised.

Mohamed Farith (left) receiving a token of appreciation from Dr Falahat


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