21 September 2012

Do you understand the PRS Framework and its Lingo?

Before jumping into the bandwagon of private retirement schemes (PRS), we should understand the PRS framework first. What is the structure behind the scene? Does our invested money in safe hands? Who are the regulators? These were the few typical questions we should find out. No worries, all of these will be answered here... (yeah, give us a "Like")

  • Manufacturer?
    PRS are offered by approved PRS Providers. Each PRS will include a range of retirement funds from which individuals may choose to invest in, based on their own retirement needs, goals and risk appetite.
  • Book-keeper?
    The PPA functions as a record keeping and resource centre for data on all transactions performed by contributors. It will facilitate transactions and promote efficient administration. The PPA will also act as a resource centre for data and research relating to the PRS industry in Malaysia.
  • Safe-keeper?
    The assets of each PRS will be segregated from the PRS provider and held by an independent Scheme Trustee under a trust. Yes. It must be "independent" to safeguard investors money.
  • Regulator...
    All of the above mentioned parties, namely the PRS providers, the PPA, the Scheme Trustees and distributors of PRS were being regulated and supervised by Securities Commission (SC). This was to ensure the proper functioning of the PRS industry and protects members, via prudential and investor 
    protection requirements.

After all, still blur about the term used above? No worries. Finance Malaysia Blog take the initiative to explain the PRS lingo against that of Unit Trust for ease of understanding:

Source: Private Pension Adminstrator (PPA)

For more PRS info, you may contact Alex Yeoh (alexyeoh@vka.com.my), a licensed financial planner who can distributes products from multiple PRS providers. Thank you.

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