PRS schemes now open

PIONEERS: (From left) Teng and Lim during the Hwang PRS Solutions product launch — Pic: ARIF KARTONO

HWANG Investment Management Bhd yesterday became the first provider of the much anticipated local private retirement scheme (PRS) funds.

The scheme allows contributors to invest a certain voluntary amount to accumulate savings for retirement — complementing the mandatory contributions made to the Employees Provident Fund (EPF).

With the Hwang PRS Solution, the company is providing four PRS products for employees and three staff retention PRS scheme for employers — offering the full suite of funds allowed by the authorities.

The Hwang PRS Conservative Fund is targeted for those above 50, aiming to off er of better returns and facilitate capital preservation while the Hwang PRS Moderate Fund targets those over 40 seeking to balance both income and capital growth.

Hwang PRS Growth Fund is a mixed assets fund with exposure to a range of equities while the syariah-compliant Hwang Aiiman PRS is for contributors willing to take on more risk for higher returns.

Hwang PRS chief executive officer Teng Chee Wai said there is 0% front-end fee across all fund offerings.

The company has lowered the initial and subsequent investment amount of the existing RM1,000 to RM100 for each fund, with subsequent top-ups of RM50.

“Retirement investing should be simple and lowcost without the high initial fee associated with unit trust investing. Malaysians should participate in the PRS scheme to allow contributors to opt for a more aggressive portfolio in building their retirement funds.”

Hwang PRS chief product officer Steve Lim said Malaysians are urged to take up an alternative as most of EPF retirees have used up their pension funds within the first three years. “According to the EPF survey, only 30% of the active EPF contributors meet the final target for basic savings of RM120,000 upon retirement.

“This alarming rate works out to a mere RM500 a month for the average 20-year retirement period, which is way below Malaysia’s poverty line income of RM800 as of 2009.”

Meanwhile, Manulife Asset Management expects the launch of the PRS scheme to create some 2,200 new jobs to kickstart the private retirement planning industry and is expected to generate a RM2.1 billion incremental of gross national income in the financial services sector.