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Saturday April 7, 2012

Boost to private retirement savings

By DALJIT DHESI
daljit@thestar.com.my


PETALING JAYA: The emergence of intermediaries as providers of private retirement schemes (PRS) will provide contributors the flexibility to invest in a structured manner and boost retirement savings, according to fund managers.

HWANG Investment Management Bhd chief product officer Steve Lim told StarBizWeek that these schemes would complement the EPF scheme and allow contributors the liberty to decide where they would like to invest their money based on, among others, their risk appetite.

“We believe investment should be viewed from a holistic manner.

Tupling: With the emergence of the PRS industry, Malaysians would be further empowered to set aside additional voluntary savings for investment in a well regulated and structured manner.

“Investment decisions should be made from an overall portfolio's perspective.

“It is about having the optimal mix of asset allocation in one's portfolio as well as striking a balance between performance and risk.

“As such, we will be offering retirement investment solutions for three different risk profile investors the risk-taker, the moderate risk investor and the conservative investor.

“We will offer the conventional and the syariah-compliant assets within these three types of investment solutions to cater to different investor's needs,'' he added.

On Thursday, the Securities Commission (SC) approved eight intermediaries as providers of PRS.

They are AmInvestment Management Sdn Bhd, American International Assurance Bhd (AIA 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.

Chan: Main priority is to ensure that Manulife can reach customers in a convenient manner.

The eight were selected on the basis of their expertise in investment and pension fund management, experience in global pensions management, financial strength, governance structure and proposed business model.

The approved PRS providers are required to make an application to the SC for approval of their proposed PRS scheme, providing options for the public to supplement their retirement savings through additional voluntary long-term contributions within a well-structured and regulated environment.

The target customers for the company's PRS scheme were the self employed, business owners as well as employees, Lim noted. He said the next three to six months would be crucial to get the PRS infrastructure in place, adding that educating the investing public about these scheme was key to the success of this scheme.

Meanwhile, Manulife Holdings Bhd Group CEO Michael Chan said its main priority was to ensure that it was able to reach its customers in a convenient manner and that it was easy for its PRS customers to communicate with the company.

In this respect, he said it would be placing great emphasis on IT systems and pre and post subscription support and help customers better prepare for retirement, Chan added.

Manulife Unit Trusts Bhd is a wholly-owned subsidiary of Manulife Holdings. He said EPF contributors would be Manulife's key customers for this scheme as EPF contributors generally tended to exhaust their EPF funds fast - between three and five years upon retirement.

CIMB-Principal Asset Management Bhd CEO Campbell Tupling said with the emergence of the PRS industry, Malaysians would be further empowered to set aside additional voluntary savings for investment in a well regulated and structured manner.

He believes the PRS schemes would grant people more flexibility and choice to regularly save and invest according to their age and risk tolerance, noting that the company would be submitting for approval a suitable range of solutions based on the PRS guidelines issued.

Commenting on the scheme, AIA Bhd CEO Khor Hock Seng said: “We see immense potential in the private pension industry and this venture complements well with our strategy of providing a range of comprehensive protection and long-term savings products, in particular to bridge the retirement income gap of Malaysians. With our extensive distribution network and strong financial standing, we are confident we have greater reach and are well poised to serve the retirement needs of the Malaysian population.”

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