SC: Malaysia needs comprehensive approach to address retirement savings shortfall

KUALA LUMPUR: A comprehensive approach is required to address the structural and specific aspects of retirement savings shortfall, said Securities Commission Malaysia (SC) chairman Datuk Seri Dr Awang Adek Hussin (pix).

Due to the increasing necessity for Malaysians to adopt proactive measures to safeguard their financial future, continuing discussions and greater clarity on the way forward will be most useful, he said.

“Young people’s retirement expectations are changing, and so should our expectations of the managers who manage these savings,” he said in his keynote address at the “Improving Long-Term Retirement Planning and Savings Behaviour’’ forum here today.

Awang also said that the SC is expanding the private retirement scheme (PRS) framework to allow current providers and digital investment management to offer algorithmic-based PRS, encouraging younger people to start retirement savings.

“The SC has prioritised building a robust voluntary pension system to allow Malaysians a private option to supplement the public mandatory retirement scheme and provide longer-term savings flexibility,“ he said.

Meanwhile, PRS has grown by 25 per cent between 2018 and 2022, to RM5.4 billion from RM2.7 billion.

“Through outreach and incentives like the PRS Youth Incentive, the membership base has increased by 40 per cent to 577,000 in 2022 from 416,000 in 2018, with most members under 40,“ he said. –Bernama