3 March, 2020
The Securities Commission Malaysia (“SC”) announced on 21 February 2020 liberalisation measures of the Private Retirement Schemes (“PRS”) with the aim of enhancing the competiveness of the industry.
The SC indicated that the measures will provide more flexibility in asset allocation for PRS funds to enhance long-term growth for PRS members. The changes include, among others:
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PRS conservative funds are allowed to invest in foreign markets;
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PRS funds are allowed to invest in exchange-traded-funds based on physical
gold to increase asset diversification into alternative investments.
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PRS providers are also now required to gradually move their members to a
less risky fund in accordance with their age and to commensurate with members’ risk tolerance to reflect the longer life expectancy of the Malaysian population.
Following Budget 2020, PRS members are permitted to make pre-retirement withdrawals, without incurring tax penalty, for the purposes of:
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payment of medical equipment or medication for approved illnesses, whether for self or immediate family members
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financing building or purchase of a residential property or reducing a housing loan
For further information, please contact:
Putri Noor Shariza Noordin, Partner, Shearn Delamore & Co
shariza@shearndelamore.com
