SC REVIEWING RETIREMENT SAVINGS FRAMEWORK, MAY REQUIRE LEGAL CHANGES

KUALA LUMPUR, March 9 (Bernama) -- The Securities Commission (SC) is reviewing mechanisms and structures to enhance individuals’ control of their retirement savings as it aims to expand the range of retirement-focused offerings to facilitate more active management of wealth.

In this regard, the SC will explore the private retirement schemes’ account structures to enable direct access to other asset classes, improving investors’ product choices and helping them achieve long-term retirement goals, it said in the Capital Market Masterplan 4 (2026-2030).

“Legislative amendments may be required to ensure that administrative and operational requirements do not impose excessive costs,” said the SC in the masterplan that was launched by Prime Minister Datuk Seri Anwar Ibrahim here today.

It said transparency on product fees, performance and other information will help investors track outcomes, assess value and make informed long-term decisions.

“The aspiration is for investors to benefit from a Malaysian retirement investment account framework for individuals, which allows access to a wide range of securities (domestic and foreign equity, bonds and sukuk, collective investment scheme (CIS), ECF, P2P, VC/PE funds, digital assets),” it said.

Additionally, the SC would facilitate algorithm-based portfolio management schemes, or ePRS, to be offered by digital investment managers.

These algorithm-based schemes operate completely online via mobile apps to facilitate greater customer interaction, and they typically do not impose commissions.

These measures will need to be complemented by behavioural nudges, which can play a critical role in encouraging consistent retirement savings behaviour.

“Globally, there is recognition that tax relief is essential to drive participation in retirement products and services with long-term lock-in features. Accordingly, voluntary retirement schemes across jurisdictions are supported by some form of tax relief or incentives to encourage sustained savings behaviour.

“This priority reflects the urgent need to prepare an ageing population to address insufficiency in their retirement savings. Hence, efforts would be made to increase public awareness of the benefits of active retirement planning and starting at a younger age,” said the SC.

Hence, the SC said that it will facilitate streamlining enrolment processes to make it easier for individuals to start saving for their retirement, adding that it will be complemented by a range of support measures and kick-start mechanisms to promote early participation.

-- BERNAMA