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ETP ANNUAL REPORT 2011
Accelerating The Growth of
The Private Pension Industry
Malaysia envisions having a model pension system and a vibrant
private pension industry. By 2020, we expect the private pension
industry to grow to RM73 billion, with more than 2.7 million
participants. This EPP is expected to create incremental GNI of
RM2.1 billion in the financial services sector and 2,200 jobs by 2020,
contributing to the growth of the asset and wealth management
industry and supporting a more vibrant capital market.
Achievements
Following the government’s announcement in Budget 2012,
the private retirement scheme (PRS) framework was launched
in October 2011 via the enactment of the Capital Market and
Services Amendment Act 2011. It establishes the regulatory
framework for the entire PRS framework, and sets in place the
authority to approve PRS and PRS intermediaries.
The importance of tax measures to incentivise participation
in private retirement schemes has also been recognised by
the Prime Minister in the Budget 2012 speech, wherein it was
announced that:
• Tax relief of up to RM3,000 be given on contributions by
individuals to PRS approved by the SC and annuity premiums
• Tax exemption on income received by the PRS fund
• Tax deduction be given for employers’ contribution above the
statutory rate up to 19 per cent of employees’ remuneration
and includes additional contributions to EPF and approved
schemes under section 150 Income Tax Act 1967 including PRS
Moving Forward
The next step would be the release of the detailed guidelines
on the PRS, which will set out the operational requirements
for the PRS providers, Scheme Trustee and the Scheme itself.
Spurring the Growth of the Nascent
Wealth Management Industry
To encourage further expansion of Malaysia’s wealth management
industry, this EPP seeks to increase the range of wealth
management products available via careful liberalisation and
streamlining product approval processes to significantly shorten
time to market.
Furthermore, measures are also being drawn up to implement
tiered returns for EPF balances above RM1 million, attract top
wealth management institutions and carve a niche in Islamic
wealth management. An expected incremental GNI of RM2.1
billion will be created by this EPP, along with an additional 6,000
jobs in the financial services sector by 2020.
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PM Dato’ Sri Najib Razak recognises the importance of tax measures to incentivise
participation in private retirement schemes in the Budget 2012 speech. Photo
courtesy of Star Publications (Malaysia) Bhd
Other steps include establishment of the PRS Administrator and
approval of the PRS scheme to be offered to the public. Recently,
SC has finalised the eligibility requirements for PRS providers.
Eligible firms can now submit their applications for approval by
15 February 2012.
Achievements
The total number of unit trust and wholesale funds as at 30
September 2011 stood at 720, comprising 590 unit trust funds and
130 wholesale funds. The net asset value (NAV) for unit trust funds
was RM234.7 billion, of which conventional funds amounted to
RM209.7 billion while RM25 billion were Islamic-based funds. For
the first nine months of 2011, the SC approved 34 new unit trust
funds and 32 new wholesale funds.
On 23 May 2011, the SC revised the Guidelines on Compliance
Function for Fund Managers to enhance client asset protection and
raise compliance standards to safeguard the interests of investors.
(more on next page)