In late 2010, Dato’ Seri Najib Razak has initiated Economic Transformation Plan also known as ETP. It was joint effort by PEMANDU, McKinsey & Company, BCG and AT Kearney. The policy was monitored by PEMANDU to be specific. PEMANDU was tasked to track all Key Performance Indicator, KPI set forth in the policy. Under Financial Services, NKEA lies 10 EPP. Most notably was EPP 6, accelerating the growth of the Private Pension Industry. Where Private Retirement Scheme was clearly define.
What is Private Retirement Scheme?
Private Retirement Schemes, PRS is a voluntary long term savings and investment scheme designed to help you save more for your retirement . The objective is to improve living standards for Malaysians at retirement through additional savings.
Why Private Retirement Scheme?
Many studies have shown that many of us do not have enough saving to live through our retirement. According to EPF , Malaysian should has at least RM 240,000 in their EPF (basic) saving by the age of 55 year old.
What is Basic Savings?
Basic savings refers to the amount that is considered sufficient to support members’ basic needs for 20 years upon retirement. This is aligned with life expectancy among Malaysia. This benchmark is against the minimum pension for public sector employees, which has been raised from RM 950 to RM1,000 per month
Our national savings rate is high [when you look on the surface]. But if you take away the EPF savings, the rate turns negative 
The Third Age: The End of the Beginning, not the Beginning of the EndNurhisham Hussein, Head of the Economics & Capital Market EPF
What about Poverty Line Income?
Recently Department of Statistics Malaysia, DOSM has revised its Poverty Line Income calculation methodology to ensure that the consumption patterns, needs, as well as demographics of Malaysian households are on par with the development the country has achieved since 2018. According to this development, Poverty Line Income is now standing at RM 2,208 
What is Poverty Line Income?
Poverty Line Income, PLI is a measurement of absolute poverty. It is based on the gross monthly household income required to meet basic needs, including food and non- food items .
A household with the gross income below PLI is defined as absolute poor and a household with the gross income less than half of PLI is defined as hardcore poor.
The National Economic Action Council and the Economic Planning Unit, EPU revise the poverty line periodically based on the information from the Household Income Survey, HIS, Household Expenditure Survey, HES and Consumer Price Index, CPI.
Since the average cost of living and household size vary among the three major regions of Malaysia, namely Peninsular Malaysia, Sabah and Sarawak, PLIs are calculated for each region but not separately for urban and rural areas.
Therefore, PRS is Crucial
You have read enough I guess. So, I believe many of you now realise the importance to supplement your EPF savings. In order for us to sustain our lifestyle, one need to consider PRS apart from EPF. PRS is a voluntary contribution scheme as per guideline from World Bank’s.
For working adults, the focus will be to build a desirable level of savings. While for retirees, Private Retirement Scheme will offer protection against longevity and inflation risks and provide adequate returns during retirement.
Benefit of Investing in Private Retirement Scheme
By investing in Private Retirement Scheme, you may enjoy tax relief. Kindly refer to the infographic below.
Am I Eligible?
If you are curious about your eligibility for tax relief, you may check on infographic below as to where you are belong.
If you are keen to explore more on tax planning and any other service offered by Ikhwan Consulting Group, please do not hesitate you get in touch with them and start your journey into retirement planning