SC opens application for PRS providers

Eligible firms can now apply to be private retirement scheme (PRS) providers to the Securities Commission ([You must be registered and logged in to see this link.]
by February 15, 2012.

In a statement today, SC said a number of suitably qualified and experienced providers with the required expertise in pension fund management or retail fund management would be approved to offer PRS schemes with an appropriate range of dedicated retirement funds catering for different investment and risk profiles.

Applicants will be assessed on their financial standing and organisational capabilities, including meeting relevant capital requirements, internal control and risk management practices, said SC.

"Qualitative factors such as governance structure, reputation and

professional standing as well as track record and commitment to grow the PRS industry will also be taken into consideration," it added. SC said PRS guidelines would be released for this purpose.

The PRS industry is intended to complement and supplement the existing mandatory schemes of the Employees Provident Fund (EPF).

The framework can be used by individuals who have disposable income to save as well as employers to make voluntary contributions above the EPF mandatory contributions on behalf of their employees.

Measures to incentivise participation in PRS had been announced by the Prime Minister in the 2012 Budget speech, whereby a personal tax relief of up to RM3,000 would be given to contributions by individuals to PRS approved by the SC as well as tax deductions to employers for contributions above the statutory rate up to 19 per cent of employees' remuneration.

Tax exemption was also announced on income received by funds within the PRS schemes.

The recent enactment of the Capital Markets and Services Amendment Act 2011 provides the regulatory framework for a PRS industry, including empowering the SC to approve PRS providers. -- Bernama