This article first appeared in The Edge Financial Daily on January 16, 2019 - January 22, 2019

KUALA LUMPUR: Private Pension Administrator Malaysia (PPA), which administers and promotes the growth of the private retirement scheme (PRS) industry, expects it to grow by a similar trajectory as last year through all channels, including digital initiatives, financial literacy programmes and corporate participation.

Total net asset value of PRS funds rose by 20% to close 2018 at RM2.66 billion. The total number of PRS members grew by 38% to 416,913 last year, up from 301,279 in 2017.

“Despite economic challenges domestically and internationally, more people saved with PRS in 2018 than in any previous years since the inception of the voluntary retirement saving schemes,” said PPA chief executive officer Husaini Hussin in a statement yesterday.

“Last year, I said it will not be easy to continually grow the PRS industry in the range of 30% annually, but we sustained the growth momentum in spite of 2018’s challenging environment.

“This means that more people are aware that PRS is a long-term savings scheme and are less worried about short-term market volatility,” he added.

Almost 40% of PRS members are aged 30 and below, Husaini said, noting that more young adults are taking retirement planning seriously.

“The youth incentive has ended, but the drive to continue encouraging the youths to save for their future remains. We will continue to reach out to them through social media and community programmes, as well as collaborate with public and private universities nationwide to improve financial literacy among students.

“PPA will also work with the industry to make it more affordable for the youth segment to start saving with PRS,” said Husaini.

This year, PPA also intends to introduce more value-added services and digital initiatives to provide PRS members an easy, convenient and secure avenue to automate their savings by setting aside a fixed sum for their retirement fund every month.

“This push into financial technology will be another step forward in shaping individuals’ savings behaviour positively,” said Husaini.

Another key area for PPA is advocating employers to make retirement planning and financial well-being an essential component of workplace policy, he added.