KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak (pic) has launched the Private Retirement Schemes (PRS) with the establishment of the Private Pension Administrator (PPA) stressing that the industry is a necessity for a developed economy.
Najib, who is also the finance minister, said the voluntary private retirement scheme was important in changing the country's social landscape, especially with rising life expectancy.
"Today, Malaysia is embarking on an important step towards the ultimate objective of having a comprehensive multi--pillar retirement framework.
"The development of this third pillar of a voluntary private retirement scheme is a matter I hold close to my heart as it is part of my commitment to reform and strengthen the entire pension and retirement landscape in Malaysia.
"A private pension industry is a necessary pre--requisite as a country develops economically," he said during the launch at the Securities Commission (SC) headquarters yesterday.
He said the government had "no easy choices" on issues affecting social welfare and stressed that the nation's prosperity remained an integral aspect of the transformation programmes.
"Each day, step--by--step, we move closer to the goal of becoming a high income advanced economy. Vision 2020 is not merely about reaching a target GDP growth or boosting the per capita income of Malaysia.
"It is about improving the quality of life for the rakyat. As economic pie grows through the efforts and endeavours of all of us -- the government, the private sector and the rakyat -- we also want to ensure sustainability of the ways of life and prosperity that the nations enjoys."
Najib said that the public, not the government alone, must also take an active part in securing "a solid foundation" with a bright economic future for country.
"Malaysians, as savvy consumers, must do more to save.
"My fervent wish would be to ensure that each and every one of our young productive adults, and indeed the future generations of Malaysians after them, will have enough savings and assets kept aside to be able to enjoy their retirement to the fullest."
He said PRS could provide "career mobility" for individuals and used by employers to attract new talents.
"The development of the private pension industry has the potential to change the face of the retirement landscape in Malaysia by increasing and supplementing coverage on a voluntary basis to all sectors of the labour market, including the self--employed, and enabling Malaysians to secure an additional and adequate nest egg when they retire."
Najib also revealed the government was waiting for a report by the SC on setting up a mercantile exchange.
"In order to fulfill the growing interest by Malaysians to invest in 'all that glitters', we will work towards the setting up a mercantile exchange to provide opportunities to invest and hedge in gold futures and other precious metals.
"Towards this end, after taking account the domestic landscape and experiences of similar markets around the world, the SC will represent a comprehensive proposal to the government."
He said the government was also promoting the establishment of a trading venue for unlisted companies to allow greater opportunities for risk capital financing.
The PPA is the final component of the PRS framework which was established through the amendments to the Capital Market and Services Act 2007 last October.
The guidelines and regulations for the voluntary retirement savings scheme was announced in April this year together with the approval of eight PRS providers by the SC; Amnivestment Management Sdn Bhd, American International Assurance Bhd, CIMB--Principal Asset Management Bhd, Hwang Investment Management Bhd, ING Funds Bhd, Manulife Unit Trust Bhd, Public Mutual Bhd, and RHB Investment Management Sdn Bhd.
Last year, Najib announced a tax relief of up to RM3, 000 to individuals contributing to PRS and tax deduction to employers for contributions above the statutory rate of up to 19 per cent of the employees' remuneration.
The first set of Schemes comprising 24 funds by PRS providers will be available for public offer from September this year.