Navigating your path to retirement through PRS

The talk highlighted the importance of retirement savings

UTAR Centre for Corporate and Community Development (CCCD) and Centre for Sustainable Development and Corporate Social Responsibility in Business (CSDCSR), in collaboration with Private Pension Administrator Malaysia (PPA), the central administrator for the Private Retirement Schemes (PRS), organised a webinar titled “Start Small. Start Now: Grow Your Retirement Savings” in support of Financial Education Network (FEN) on 11 November.

The webinar, conducted via Zoom, was delivered by PPA Marketing Events and Promotion Manager Wong Mew Sum and Corporate Engagement and Management Manager Ma Kam Kwan. In the webinar, Wong and Ma first explained PRS and its objectives as well as the key considerations to meet the retirement needs. “We suggest, starting from now, you save 1/3 of your monthly salary so that you will have 2/3 replacement income when you retire,” said Wong. She advised that people must make sure they have enough money to maintain their current lifestyle during retirement. “Inflation will increase your cost of living and erode your purchasing power. You should start saving now for your retirement as there will definitely be a rise in the cost of living in the future,” she said.

She also talked about how the implementation of the Movement Control Order (MCO) affected Malaysian’s retirement plan. She said, “According to a survey, apart from medical emergencies and monthly fixed debts, retirement savings is one of Malaysians’ biggest financial worries. Malaysians become more worried for not having enough retirement savings after the MCO.” She further explained how PRS works and provided helpful guidelines on how to choose the fund options.  

Ma, on the other hand, pointed out that the minimum retirement age of an employee in Malaysia is 60 and the average life expectancy is 74.9 years. “We are living longer now, so we need enough retirement savings to last through at least 20 years of retirement,” he said. In order to have a better understanding of the future financial situation, Ma provided a guideline on how to use the retirement calculators to estimate how much one will need to save for their retirement and how long their money will last.

Besides, Ma presented the PRS framework and explained that PRS is supervised by the Securities Commission Malaysia through four intermediaries, namely PRS Distributors and Consultants, PPA, PRS Providers and Scheme Trustee. He also provided an overview on the performance of the PRS funds and said, “Past performance cannot guarantee future returns. However, PRS funds have been performing well even in the recent volatile market.” The talk ended after a Q&A session.

Wong presenting a survey which stated respondents' worries about not having enough money for retirement after the MCO

Wong explaining the default options and self-selected fund options offered by PRS

Ma demonstrating how to use the retirement calculator