Saturday, October 6, 2012

The Private Retirement Schemes can also be used as a tool to retain talent in SMEs


Ooi: The cost of maintaining talent is a lot lower than losing or hiring new talent. SMEs have to look beyond profitability. Ooi: The cost of maintaining talent is a lot lower than losing or hiring new talent. SMEs have to look beyond profitability.

Malaysians looking to grow their retirement savings are likely waiting in anticipation for Private Retirement Schemes (PRS) providers to roll out their services soon.

But Edward Ooi, chief executive officer of Manulife Asset Management Services Bhd, said many more Malaysians are content with just maintaining their contributions to the Employees Provident Fund (EPF).

He noted that there is insufficient financial education in Malaysia and it is natural for Malaysians to be lured into a false sense of security that having the EPF is sufficient for their retirement savings.
 
Ooi said, however, it is a known fact that EPF savings are rarely sufficient to support a retiree as most would have exhausted their EPF savings within three to five years of retirement.

“By the time they realise that they don’t have enough savings for their retirement, it is too late. They are probably in their 40s by then, with not as many years left to save up from their earnings,” Ooi said.

For those not familiar with it, the PRS is a voluntary long-term investment scheme to help individuals accumulate savings for retirement.

The PRS will include a range of retirement funds that individuals may choose to invest in and is meant to complement the mandatory contributions made to EPF.

The Prime Minister launched the voluntary scheme in July to allow employees and the self-employed the opportunity to save for their retirement.

A total of 24 funds will be available under the first set of schemes and will be managed by eight financial institutions, namely AmInvestment Management, American International Assurance, CIMB-Principal Asset Management, Hwang Investment Management, ING Funds, Manulife Unit Trust, Public Mutual and RHB Investment Management.

“The public needs to be educated about their retirement needs. The question is whether they have adequate savings and how can they plug the short fall.

“The PRS disciplines you to invest in the long term,” Ooi said.

Most of the PRS providers have gone into full gear trying to educate the public on the importance of saving up for their retirement.

But more than just for individual retirement needs, Ooi said the PRS can be used as a tool to retain talent in small- and medium-sized enterprises (SMEs).

“In a lot of corporations in other markets where intruments like the PRS have become common practice, employers offer a certain amount of contribution to the employees’ retirement fund on a voluntary basis after a period of service. And this has worked well for them. The model can be used here as well,” he said.
However,this could mean that SMEs may incur higher costs as contributions above a certain threshold made by employers are not eligible for tax relief.

Under the scheme, employers are given tax deduction on contributions to PRS made on behalf of their employees of up to 19% of the employees’ remuneration.

Nonetheless, Ooi countered that retaining talent has been an issue with SMEs and building retirement savings for employees can be used as incentive for employees.

“The cost of maintaining talent is a lot lower than losing or hiring new talent. SMEs have to look beyond profitability. The PRS can be a good instrument for this,” he said.

Ooi is positive that the implementation of the PRS by employers will be welcomed, especially because the uncertain economic conditions around the world.

“Once employees realise the need to supplement their EPF with a retirement scheme, the PRS will be a great alternative. And we foresee that the tax relief of up to RM3,000 a year for contributors will be met positively as well,” he said.

Ooi added PRS providers merely need to offer employers with the right combination of funds that would appeal to their employees.

Employees and employers have the option to change their PRS provider after one year if the investment does not meet their objectives.

With some six million employees and two million self-employed adults in Malaysia, Ooi estimates that the retirement industry could be worth some RM18bil.

He expects the take-up rate for PRS to be slow in the first two years but is confident that with the right financial education, PRS will be a very big business for the financial industry.

“We have the experience of running the pension business. So we can bring in the expertise and infrastructure to bring in to localise to the needs of the Malaysia market,” Ooi said.

Comparing the EPF and PRS, Ooi said the EPF gives an average annual return of 5%, which is a decent return but is not enough to ensure a comfortable retirement savings.

He noted that the PRS could provide average returns of up to 6% to 8%.

According to Ooi, the underlying investments of the PRS can be divided into three categories; the aggressive type is 70% invested in equities, the moderate type is 60% invested in equities and the conservative type is 80% invested in fixed income.

“A basic calculation shows that you would need at least RM1.7mil to retire comfortably at age 55 at an inflation rate of 3% and RM3.04mil at an inflation rate of 5%.

“So, obviously, mandatory savings are not enough and people need to be aware of that,” he said.

Source: The Star Paper 7/9/2012

Wednesday, August 1, 2012

SC Approves 8 Private Retirement Scheme Providers


The Securities Commission Malaysia (SC) announced the initial list of eight intermediaries approved as providers of private retirement schemes (PRS providers) on April 5 this year, marking a significant milestone in the development of a long-term

sustainable private retirement industry for Malaysia.

The eight PRS providers that have been approved are:
· AmInvestment Management Sdn Bhd
· American International Assurance Bhd
· CIMB-Principal Asset Management Bhd
· Hwang Investment Management Bhd
· ING Funds Bhd
· Manulife Unit Trust Bhd
· Public Mutual Bhd
· RHB Investment Management Sdn Bhd

The PRS providers were selected on the basis of their expertise in investment and/or pension fund management, experience in global pensions management, financial strength, governance structure and proposed business model.  The approval of the PRS providers follows the release and announcement in December last year of the SC’s “Eligibility Requirements for Private Retirement Scheme Providers” (Eligibility Guidelines) stipulating the expectations and requirements for interested and qualified parties to become PRS providers.

The SC has also issued the Guidelines on Private Retirement Schemes (PRS Guidelines), which set out regulatory and operational requirements that must be complied with by PRS providers, PRS scheme trustees and investments under PRS ventures.

The Capital Markets and Services (Private Retirement Scheme Industry) Regulations 2012, which came into force on March 19 this year, and the PRS Guidelines as well as a set of FAQs are available on the SC website at www.sc.com.my

Money Compass interviewed the SC as well as several PRS providers to find out how the market generally welcomes the initiative and for comments on how the initiative will benefit the market and contribute to market liquidity.

The SC emphasises that  Malaysia’s PRS aims to promote the welfare of retirees by developing the private pension industry, which will complement the mandatory contribution to the existing Employees Provident Fund (EPF). The new PRS framework is intended to cater for as wide a segment of the population as possible and it is important that the framework does not restrict the potential for all individuals to save and prepare for retirement.

The self-employed, for instance, who take breaks from the labour market can top up their contributions after any period of non-savings.  Another target segment are employers who may wish to make contributions above the statutory rate. The SC wishes to encourage employers by facilitating an environment that will lessen the compliance burden on these employers.

The government has been concerned about the inadequacy of EPF savings as statistics show that 50% of contributors exhaust all of their EPF savings within five years of retirement and only 18% of active members aged 54 have adequate savings of at least RM173,000. It is also estimated that about 70% of retirees use up their EPF lump-sum withdrawals within 10 years of retirement. This coupled with increasing life expectancy and living standards demonstrates the need for voluntary retirement schemes that benefit the public.

While maintaining its primary aim of increasing retirement savings for individuals, the PRS is also expected to serve as a growth engine to further expand the investment management industry, as set out under the second Capital Market Masterplan.

Development of the PRS industry would add depth to the capital market and produce positive spill-over benefits in terms of increased product innovation, intermediary activities and skill sets, particularly in promoting greater diversity in the management of long-term savings.

The creation of large institutional investors in the form of PRS providers would contribute towards improving market liquidity and foster good corporate governance practices in the capital market. Over the next 10 years, it is projected that assets under management in the PRS industry will grow to RM30.9 billion. (Source: CMP2)

2) What are the risks that the provider and the investor should be concerned about?
The amendments to the Capital Markets and Services Act (CMSA) was introduced to establish a regulatory framework for PRS.

The SC will approve and supervise the private retirement schemes, PRS providers and trustees.  Under the PRS framework, assets of the private retirement schemes are segregated and held by independent scheme trustees under a trust structure. The approval and regulatory framework as well as protection of assets via a trust structure, detailed reporting and disclosure requirements would safeguard the interest of members.

Further, PRS providers must comply with the requirements under the PRS guidelines in offering or providing the schemes to investors. One of the overarching principles is that PRS providers must act in the interest of members as a whole with the aim of providing cost-effective voluntary retirement schemes and ensuring that the affairs of the scheme are operated in a proper and efficient manner. The permitted asset allocation and investment limits are also set out under the PRS guidelines.

Financial education is key to bringing about awareness of the need to save for retirement and manage expectation of members. A mindset or behavioural shift is needed to tackle the problem of inadequate retirement savings.

3) Will there be any announcement of a second batch of PRS providers in the near future?

The SC does not rule out the opportunity for additional PRS providers in the future. However, there is no fixed time-frame as it will depend on various factors, such as growth of the PRS funds, performance of the approved providers and capacity of the industry to sustain additional providers.

4) The implementation aspect of retirement schemes is to ensure that retirees plan their finances prudently. Educating the public to be more aware of this need is important. What can the SC do in this context?

As the private pension industry in Malaysia is a nascent industry, it is important for both the regulator and PRS providers to work together to increase the level of financial education and public awareness of PRS. Informed decision-making is a critical aspect and PRS intermediaries such as PRS providers, their distributors and licensed financial planners play an important role in advising and assisting members in making investment decisions and understanding the system.

It is also of utmost priority for people to go through a mindset or behavioural shift to appreciate the need to save for their retirement.
In this regard, the SC has initiated series of investor education efforts, including media profiling, roadshows, forums, as well as ongoing engagement with relevant stakeholders from both the public and private sectors.

An informed public will be better equipped to understand the risk and features of PRS and customise their
retirement plans through the various fund options to meet their needs. A key aim of the SC investor education effort is to ensure that members receive sound advice on various investment options and are not misled into investing in funds that are not suited to their needs. Hence, only intermediaries and representatives with the necessary qualifications will be permitted to advise on appropriate and suitable retirement funds.

Furthermore, a private pension administrator is being established whose duties and responsibilities under the law (Section 139H of CMSA) include taking into account public interest considerations in acting in the best interest of members and having regard to the need to protect members. In its efforts to promote efficiency and convenience to members, the private pension administrator will also undertake promotion and general education/awareness of PRS.



Datin Maznah Mahbob, CEO, Funds Management Division, AmInvestment Bank Bhd
The PRS is designed to help individuals accumulate long-term savings for retirement which supplements mandatory retirement savings (i.e. EPF) under a well-structured and regulated environment. As a PRS provider, we will promote the concept of savings at an early stage. Savings at an early stage (hence higher savings for retirement) are particularly important as the life expectancy for the Malaysian population has increased to an average of 75 years, but most people stop working when they reach their retirement age of 55-60. In addition, there are tax benefits when investing in funds under the PRS, whereby a personal tax relief of up to RM3,000 will be given to contributions by individuals to PRS approved by the Securities Commission. A tax exemption was also announced on income received by funds within the PRS.

There will be people who want to invest in PRS for tax benefits, or due to lower cost of investing. Also, competition amongst the players will grow the PRS industry. This will result in larger assets under management for the industry which will then stimulate capital market activities and improve market liquidity.

We will use various channels to reach investors. These will include, amongst others, educational articles on PRS industry topics, media briefings and interviews on investment topics, and participation in public conferences. We will also hold joint events with our distribution partners to reach out to their clients, hence helping to increase awareness.

As our commitment to the investor is to provide a retirement solution product which provides a real rate of return, our role as the fund manager of the retirement funds is to manage investment-related risks in order to achieve the investment objective of the fund.

The major risk to the investor is the mismatch of risk where the retirement fund chosen by him/her may not be suitable to his/her needs and circumstances. For example, it may be deemed unsuitable for an investor who is 50 years old to choose to invest in an aggressive fund, from a risk perspective at his current age. Hence,c areful consideration by investors is required before choosing a fund for investment.

Campbell Tupling, CEO,
CIMB-Principal Asset Management Bhd

As a PRS provider, CIMB-Principal will be offering a range of retirement saving choices for the public to voluntarily opt into. Once our proposal is approved, our key roles are to operate CIMB-Principal’s PRS and manage the retirement savings in accordance with the individual’s choice.

The PRS is the next step in the evolution of retirement planning. People are living longer and having fewer children. As such, rather than depending solely on their Employees Provident Fund (contributions) or their children, they need to start maximising all available avenues to save and invest for their retirement.

The PRS is a structured and effective avenue to accumulate retirement monies because it gives people the opportunity to adjust their savings and investment decisions to reflect their own financial situation and preference. The PRS will also help boost the existing retirement landscape as it acts as an additional avenue for Malaysians to save for their retirement. As it is a voluntary scheme, there are no required fixed amounts or fixed intervals for an individual’s contributions to his or her PRS account. In addition, the PRS will be able to help those who do not have an EPF account to accumulate their additional savings for a comfortable retirement. Everyone above the age of 18 is eligible to open an individual PRS account and he/she can do so once the scheme becomes available.
We will be coming up with an attractive array of PRS products that will suit investors’ needs and risk profile, which will be announced upon approval from the Securities Commission Malaysia (SC).

Currently, the main avenue to educate the public is via the media. Not many specific details can be shared until a company’s PRS proposal is approved by the SC. Once that happens, outreach and education will come via traditional communication and sales distribution channels. We believe that the media remain the single most powerful means to educate the wider population out there on the potential of PRS.

As with any investment, there will be risks attached to it, depending on investors’ investment profile and risk-return tolerance. In terms of investment returns, we are expecting a well-balanced portfolio to provide returns that are at least on par with that of EPF’s to encourage contributors to invest. For others, we are looking at equity-fund type of returns.

At CIMB-Principal, we are able to leverage on the strength of CIMB Group and Principal Financial Group (PFG), including PFG’s experience as one of the top PRS providers in the industry. As such, we believe we will be able to showcase our expertise and system function in investment and administration of our PRS participants’ contributions.

Steve Lim, Chief Product Officer,
Hwang Investment Management Bhd

Research has revealed that up to 70 per cent[1] of the EPF contributors exhaust their savings within 10 years of retirement. This is an alarming finding given that the average life expectancy now is up to 75 years of age. This means that retirees will need to either depend on their children to support all their financial needs or start working again when funds run out. As such, whilst this initiative may not be well received at this juncture due to reservations with regard to the ability of the new infrastructure to deliver EPF-like returns and the need for employees to top up their savings, with much education, the public will realise its importance gradually.

The PRS is set up to ensure sufficient savings for retirees in their old age. The government understands the need to encourage the public to start taking their retirement planning seriously and start early as without such funds, there are dire economic implications on society and the country’s economy as a whole. As such, the PRS should be driven by strong benefits to the market, employers and employees.

This initiative benefits both contributors and the industry:
a) Provides the public with an alternative investing option, especially for the self-employed and business owners.
b) Creates confidence through hiring the industry’s best as PRS providers, who will play their part in ensuring Malaysians will have sufficient funds for a comfortable retirement.
c)  Over the long term, a society that understands and practises good money management, such as starting early and having a consistent commitment to building up funds for retirement. This will lessen the burden on the younger generation as well as the government if retirees are financially independent.
d)  An added layer of customisation – allowing contributors to this scheme to determine investments that best suit their needs.
e) Promotes growth of domestic capital markets in the long run.
f)  Encourages development of the financial advisory industry: both PRS providers and non-PRS providers need to upgrade their products and services to be competitive and generate better investment performance.

Benefits to employers

a) Tax deduction claim on the amount of contribution made (up to 19% of employees’ remuneration).
b) Be able to position the offering of PRS contributions as additional benefits to prospective and existing employees .

Benefits to employees

a) Have access to efficient, low-cost retirement savings funds – the front-end cost should be competitive or lower compared to investing in unit trust funds outside this scheme.
b) Personal annual tax exemption of RM3,000 for investing in the portfolios under the PRS.
c) An early start means they will be able to enjoy the benefits of the power of compounding over time. It takes the stress of last-minute investing in efforts to build up an equitable sum for retirement.
d) Simplicity and ease of starting up a regular investing/savings portfolio with trusted and award-winning fund managers.
e) Be in control of their pension fund: they have a choice of the fund manager and funds/category. This is currently not available through any retirement scheme.

Eventually, the PRS will offer fresh capital market injection as funds under management grow to form a significant percentage in the fund management industry. This growth means there will be more funding inflow that will be directed towards various investment vehicles.

We may not see this immediately, but in the long- un, we should see the PRS investments dominating the institutional landscape the way EPF does now. Let’s take a simple illustration: if the total PRS investment in the first year amounts to RM12 million, with additional investment of RM1 million every month and growing by a compounded annual growth rate of 6%, in 10 years, this amount will equate to approximately RM380 million.

The first step to the success of the PRS is building awareness by educating the public about PRS, investment and retirement subjects. For starters, we need to ensure that all the pieces are in place before we start communicating with the public. Once the infrastructure is in place, we need to ensure that all staff subscribe to the scheme. This helps build confidence and reassures the public that we have confidence in what we are offering. This is the first step to building a successful scheme.

We are committed to investing our resources in the initial stage of the programme to penetrate the local retirement investment market and build interest and momentum for this scheme. We are ready to plough back all our fees earned from this project at the initial stage into the infrastructure and marketing activities in order to get the scheme going. Additionally, we will be conducting training and education sessions to support this programme in order to help the public understand and practise
retirement planning.

For those who are already contributing to some kind of retirement savings/investment scheme, or are saving and investing on their own, we will need to educate them on objective-driven investments to ensure what they have and further contribution will be sufficient for their needs.

Prudent risk management is critical in managing retirement funds. Therefore, proper regulations and guidelines are needed to ensure that funds are well managed.

As a PRS provider, the key is in delivering strong investment returns that commensurate with the risk undertaken. Most importantly, it should not disappoint as we have only one shot to gain contributors’ trust to participate in this scheme.

Investors need to be reminded that this is not a risk-free investment. All investments carry some sort of risk and investment in PRS funds is not excluded. Therefore, it is important that PRS contributors understand the risk involved, have the basic knowledge of investments and engage a PRS provider who understands their needs and requirements.

Having said that, the investment horizon in PRS is on a long-term basis. We believe that any market volatility should be smoothened out over the long run.

Edmund  Ooi, CEO, Manulife Unit Trust Bhd

We definitely believe that the market will benefit from this initiative. First of all, the PRS will offer flexibility to the investors.  It will allow them to invest and manage their retirement scheme based on their risk appetite. This will complement their EPF savings. Together, it can help ensure more members of the society plan better for their retirement needs. Second, it is expected to create fund inflows to the various investment vehicles in the market, which would benefit the overall market liquidity.

The total employed individuals in Malaysia as of end-January 2012 is approximately 12 million. If half of that population wants to utilise the RM3,000 tax relief per annum given by the government when they invest in the PRS scheme, we may see an addition of up to RM18 billion worth of assets that can be injected into the Bursa Malaysia market annually. Currently, Bursa Malaysia capitalisation stands at RM1.28 trillion and the amount of unit trust assets is RM249.5 billion as at end December 2011.

The successful adaptation of the PRS in Malaysia will depend on educating the public on the importance of having sufficient funds upon retirement. Many Malaysians are living too comfortably with the false assumption that their EPF funds will be sufficient. Also, there may be the misconception that investing in another similar fund would mean that they are signing up to handle more tedious processes. We are talking about fundamental shifts in how people perceive pension schemes, which is why education is key.

Firstly, the Malaysian population needs to understand that the EPF system is not sufficient for them to secure a good quality pensioner lifestyle due to the rising costs of living in Malaysia. With the introduction of the PRS, they are now given a choice to bring their retirement savings up a notch, depending on how much they can handle based on their risk appetite.

We also aim to educate the public on investing in this scheme.  We feel that our responsibility lies in educating the people that we are coming up with a system infrastructure that allows the smoothest transaction possible for our investors. We plan to carry out promotional and educational activities for the general public, including advertising.

Any investment carries with it an element of risk. Therefore, prior to making any investment, prospective investors should consider the following risk factors such as market risk, liquidity risk, management risk, inflation risk, interest risk, currency risk (if investors invest outside Malaysia), etc. Investors need to understand all these risks before investing. The provider should also aim to educate the public on the objective of these funds, i.e. risks involved, investors’ investment horizon, funds’ investment objective, etc, when it comes to investing in this private retirement scheme.

Source: Money Compass Magazine 

Tuesday, July 31, 2012

私人退休基金把脈 (二)

前文:私人退休基金把脈 (一)

私人退休基金VS公積金
若我已擁有公積金(EPF),我還需要私人退休基金嗎?私人退休基金可以顯著提高退休後的儲蓄嗎?
市場人士普遍認為,是否要參與私人退休基金計劃,得胥視個人的公積金數額的多寡,但不諱言這是另一儲蓄管道,以提昇投資回酬。

昌富理財首席顧問李文暢指出,政府以3千令吉稅務減免鼓勵人民參與私人退休基金是項不錯的舉措,以多元化個人投資項目。而且,對課稅率較高的人民而言,稅務減免能起龐大助益,看起來會相當“值得",但低收入群卻可能無法完全感受這份利惠。

須比公積金回酬更高
“無論如何,此措施至少可提昇人民未來的退休金,雖然貢獻不會過於顯著,但仍起一定的作用。"
他表示,很難說擁有多少公積金的可以考慮將部份的錢轉移至私人退休基金,一切取決於本身的需求及是否願意多元化投資項目,還是傾向於獲取公積金的約6%派息率。

“當然,私人退休基金必須帶來更高的回酬,才能確保有關基金獲得市場追捧,否則投資者寧願將錢放在公積金局內。"

無論如何,李文暢仍對私人退休基金抱持正面看法,況且在政府的監督下,可捎來一定的表現。
公積金局今年2月宣佈派息6%,為過去10年來的新高,而且過去數年都在4.5%以上,超越銀行定存率。

僱主料不踴躍響應
儘管政府鼓勵雇主為雇員繳納私人退休基金,不過市場人士認為,若當局沒有實施強制性措施,料將難以“迫使"雇主提昇對雇員的退休金繳納比例。

“很多雇主會認為現有繳納率已相當足夠,而不會自發為雇員繳納。"

以此來看,私人退休基金會以投資者的自行投資為多,雇主應不太響應此措施,惟前提仍是以回酬的“可觀性"為考量。


著重長期穩定回酬
在私人退休基金計劃下,8家合格的金融機構中將提供3大類型基金以供選擇,分別是成長基金、穩健基金和保守基金,但該怎麼作出選擇呢?而且若是全新的基金,在無法參考過去基金表現紀錄之下,會否存有風險呢?

根據宣佈,私人退休基金並無回酬擔保,加上非追求高回酬,反而著重於長期及穩定的回酬。

不同基金表現各異
雖然涉及私人退休基金計劃的8家信托基金公司未宣佈參與的基金有哪些,但《財富焦點》暫時根據已獲公積金批准的信托基金為準則,並從參與的基金公司中挑選不同的基金類型以作參考,以窺探不同基金種類的投資回酬表現。

當中以成長型基金的長期表現最為標青,如大眾飛躍成長基金過去5年的總回酬達到52.47%,而過去10年更寫下188.83%漲幅。

穩健型基金走勢也不俗,以大眾成長基金為例,過去5年寫下56.97%回酬,聯昌信安平衡基金則揚升23.9%。

雖然保守型基金給人的感覺是低回酬,不過近年來股市波動,當中的債券基金反而交出不錯的表現,一般的5年回酬都近30%,甚至達到更高水平。

成長型基金的投資組合主要是股市,因此回酬雖較大,但風險也相對高,像過去一年以股票為主導投資工具的基金備受考驗,回酬不大,甚至錄得負面回酬。

而穩健型基金的波動性較低,主要獲不同的投資組合作為平衡,除了股票,其他投資工具還包括債券、現金市場及其他固定收益項目等;至於保守型基金則放在風險較低的投資工具,如現金市場及固定收益工具。

根據年齡估算可負擔風險
李文暢說,一般上投資者選擇的基金類型,主要根據年齡的可負擔能力,以100減去本身的年齡,得出的數目就是可承擔風險的比重。

“譬如,陳小姐今年30歲,將100減去30後,得出的是70,即她的70%投資組合可承擔高 風險投資,以此類推。"他指出,基金的投資法較推崇每月按額投資,即平均成本法(dollar cost averaging),以長期投資為目標,比較一筆過投資較取決於整體市場時勢,若求短期回酬,可能會無法如願以償。
“很多人說股市已處於歷史高峰,或許一筆過投資可能會充滿風險,但凡事應以長遠來看,像馬股從1997年亞洲金融風暴至2008年全球金融危機,經歷過股市的大幅波動,惟至今仍成功站上歷史新高,因此相信未來還有更多良機。"

他補充,只要投資回酬高過定存,達到5至6%,已算具吸引力了。

債券基金受看好
同時,以基金類型計,李文暢頗為看好債券基金的走勢,因為目前全球加入降息的列車中,債券的回酬反而攀升,直到通膨的壓力重燃。

“我相信這一兩年內債券型基金都會交出不錯的表現,除非通膨突然升溫,各國中行被迫以升息來作出應對,進而導致債券回酬滑落。"

趁早開始投資
錢滾錢創富
退休金不夠用?退休生活難捱?李文暢強調,儲備退休金的守則仍離不開養成良好的理財習慣,其實以打工族而言,員工本身扣除11%公積金,加上雇主至少繳納的12%(月入5千令吉者為13%),雇員每月可至少存23%公積金。

“若再加上每個月至少將10%收入存起來,已是一筆相當可觀的數目。"

不過,他說,世事難料,為了確保晚年可過得安心自在,仍須參與投資活動,以擴大回酬,並確保投資回酬能超越通膨。

“以10萬令吉本金計,若年回酬達10%,本金將提昇至11萬令吉,但以3%通膨率計,實際回酬卻只有10萬6千令吉,仍算不錯,至少不是處於負面水平。"

只21%為退休作準備
在這個年頭,財富累積也講求如何強化“被動式收入",包括基金投資,若能趁早開始被動式收入的投資活動,將能縮短累積財富的時間,如何讓“錢"為你工作,是創造財富的重大主軸之一。

值得注意的是,儘管56%大馬人期待在60歲退休,不過只有21%人士在財務上作好準備。



結語:
 
對很多受薪族來說,退休金不足以應付晚年的生活,已是不爭的事實,所以唯有打開更多的“投資傘",才能累積更多的財富,因為“船到橋頭未必直",切勿到了“錢不夠用"之時才來擔憂。

無可否認,私人退休基金是當中的一扇投資之門,通往更廣闊的投資之道,但須先假設退休後每月的生活開銷,先計算出退休金缺口,再透過展開合適的投資,才能高枕無憂,迎接美好的退休生活。

Source: 星洲日报:投资致富 2012-07-29 19:42 

私人退休基金把脈 (一)



當你發現過完人生上半場,兒女無法自立,退休金不夠用,甚至有人高呼這個時代是“孩子的天堂,中年人的戰場,老人的地獄",可見消費水平騰漲,已打亂了不少人的晚年生活。 


政府最近宣佈將退休年齡從55歲延長至60歲,可讓多工作5年,多賺5年的錢,但這真的能顯著增加人民的收入嗎?或許得結合不同的投資工具,才能起更大的效益,就如即將要推行的私人退休基金計劃,以期能增強的退休金


雖未真正落實,但本期《財富焦點》以私人退休基金為探討對象,看看是否能支撐部份退休生活之需,減輕退休後"錢不夠用"的疑慮。


你的退休金夠用嗎?
政府高喊即將邁入高收入國行列,然而你公積金戶頭裡的錢,再加上各項投資,是否足以應付晚年的生活?

根據統計,大馬約70%低收入群在退休後的首3年內就將公積金存款花光,而最主要的原因是國民的收入不高生活費卻高漲

大馬有33%員工屬於低收入群,每月賺取少過700令吉,導致公積金儲蓄低企,難以面對接下來 的生活。有些低收入群每月公積金存款只有約140令吉,一年也僅有1千680令吉,雖然每年有派息,但20年後他們只有4至5萬令吉存款。以目前的生活水 平而言,這些儲蓄根本不夠花。

同時,調查也指出,每名大馬人至退休為止的平均公積金只有13萬令吉,若退休後每月要花2千令吉,這筆退休金只足夠5年又5個月的花費,但若每月花費提高至5千令吉,則在短短的2年又2個月就輕易花光。

以上預估僅以零通膨計算,若納入高通膨預估,情況更加“不堪設想"。

雇員可獲3千令吉稅務回扣
此時,政府迎來私人退休基金計劃,鎖定的存戶是希望儲蓄更多退休基金的受薪一族及自僱人士,並鼓勵雇主替雇員投資私人退休基金,以獲稅務回扣,而雇員本身每年也可獲得3千令吉稅務回扣
據稱,這是一項低成本的退休投資工具,與市面上多數以傭金為吸引力的金融產品不同,私人退休基金的服務費非常低,比信托基金業的5.5%左右更低。無論如何,在真正作出宣佈前,目前仍無法掌握真正的服務費及退休基金會以何種面貌推出。

9月下旬後開放申請
這項靈活及多樣化的私人退休基金,首批將由8家合格私人退休基金金融公司合共推出24種基金,預計9月下旬後開放予公眾申請。

基本上私人退休基金的運作方式和公積金相同,即設有兩個戶頭,70%存款將存入第一戶頭,須待退休後才可提款,另外30%存款則將存入第二戶頭。存戶每年只可從第二戶頭提款一次,且須繳稅8%,因為不鼓勵會員在退休前提領存款

只能買進不可賣出
為了加強退休保障,存戶只能買進特定基金,而不可賣出

8家合格的私人退休基金金融公司/投資管理公司如下:
●宏利單位信託(Manulife UnitTrust)
●大馬投資管理(Am Investment Management)
●美國友邦保險(American International Assurance)
●聯昌信安資產管理(CIMB-Principal Asset Management)
●黃氏投資管理(Hwang Investment Management)
●ING基金(ING Funds)
●大眾信託(Public Mutual)
●興業投資管理(RHB Investment Management)


Source: 星洲日报:投资致富 2012-07-29 19:42

Tuesday, July 24, 2012

Beefing up our nest egg - (PRS)


PLANNING to supplement your retirement nest egg by contributing to the private retirement scheme (PRS)? This long-term investment scheme, regulated by the Securities Commission Malaysia, is aimed at helping individuals accumulate savings for retirement and complement their mandatory contributions made to the Employees Provident Fund (EPF). All individuals, employees and freelancers who invest in a PRS product will enjoy tax relief of up to RM3,000 a year, as announced in Budget 2012.


Basic PRS products similar to "plain-vanilla" unit trust funds designed for growth, moderate or aggressive risk appetites should be available in the market this October. The eight approved PRS providers have yet to reveal details but the initial products appear to best suit employees working for profitable small and medium enterprises and large companies.


The PRS shares the same features as the 401(k) Defined Contribution Plan in the US. Both are voluntary and enable employees to lower their taxable income. Says Robert Boyda, head of global asset allocation and senior portfolio manager at Manulife Asset Management in the US, the employer contributes between 5% and 6% of the contributing employee's salary into this fund, a benefit aimed at retaining employees.

Jason Chong, CEO of Manulife Asset Management (M) Sdn Bhd, says this approach can be adopted by employers here. "For example, I [the employer] will give an additional 3% [contribution to the PRS] but if you leave within two years, you will not receive anything." To encourage the introduction of PRS products to their staff, employers can claim a tax deduction of up to 19% of their employees' remuneration, which is higher than the current statutory contribution of up to 13% to the EPF.


Who selects?
This approach puts the selection of the PRS provider with the employer. Selection of the actual PRS product is, however, with the individual, based on his risk profile and investment duration. Currently, there is no limit on the number of PRS providers that a company can work with. But most companies are not expected to work with all eight approved providers since this imposes additional administrative processes on their human resource department (like EPF contributions, PRS contributions would affect the companies' payroll system). Too wide a selection of similar PRS funds will also confuse employees. "In the US, companies offer seven to eight funds in their 401(k) scheme. They would pick a provider based on its financial strength and ease of administration. Less emphasis is placed on returns and fees," says Boyda.


Says Chong, a PRS provider will offer three basic-vanilla funds and possibly more innovative funds that invest outside the country. Manulife Unit Trusts Bhd, which is among the eight approved PRS providers, is currently looking at the systems and approaches adopted by their counterparts around the world and will adopt processes that fit the local market, says its CEO Edward Ooi. The fees have yet to be finalised.

source: The edge Malaysia 20/7/2012

Wednesday, June 27, 2012

Employers can structure PRS to retain talent, save tax


KUALA LUMPUR (June 6): Employers can take full advantage of the tax benefits for their contribution to employee remuneration, while retaining their talent pool, by participating in private retirement schemes (PRS) that are set to come into the local market as early as October.

Jason Chong, CEO of Manulife Asset Management (M) Sdn Bhd, said PRS can be structured to become a talent retention tool for the employer. "Vesting is one way. I give you an additional 3%, but if you leave within two years, you don't get anything. It can be a progressive scale. We hear about brain drain all the time… people going to work in Singapore and Hong Kong. This is one way of retaining talent in Malaysia," Chong said on Tuesday.

Moreover, the Malaysian tax structure allows employers to claim tax deductions of up to 19% of their employee remuneration under employment benefits, which is above the current statutory contribution rate of 12% or 13% to the Employees Provident Fund (EPF).

"Currently, employers give 12% [or 13% for employees whose monthly salary is below RM5,000], so potentially there is another 7% that they can contribute and still get tax deductions," Chong said, pointing out that statistics show most retirees using up an average of RM150,000 from their EPF savings within the first three to five years of retirement.

While tax benefits could help spur the initial take-up of PRS, Chong reckons individuals themselves need to understand what PRS is and whether the options available could help shore up savings for their old age. "There will need to be a lot of education on benefits, but that's part of the business plan."

Individuals can claim RM3,000 tax relief a year on voluntary contributions to PRS.

Manulife Unit Trust Bhd was among the eight Securities Commission Malaysia-approved PRS providers announced on April 5. The others were AmInvestment Management Sdn Bhd, American International Assurance Bhd (AIA), CIMB-Principal Asset Management Bhd, Hwang Investment Management Bhd, ING Funds Bhd, Public Mutual Bhd and RHB Investment Management Sdn Bhd.

Basic PRS products should come into the market from October this year, as the providers were given six months to come up with a plan for approval, Chong said. Market conditions should not affect the roll-out as the product is for the long term, he added.

The common questions that come up are: Can the PRS beat the EPF in terms of returns? And what happens if the fund ends up giving lower returns than the EPF?

"It depends on your risk appetite, growth, moderate or conservative. If you're aggressive and go for the more aggressive growth products, then you should. But if you're conservative, you go for the more conservative funds," Chong said.

"Part of the education process is to not look so much at the short-term performance, but at the long-term performance… sometimes [due to market conditions], you can't look over the one-year basis. You've got to look over the medium term," said Chong, who is not expecting a strong take-up until there is more awareness about PRS.

Studies have shown that putting money with Manulife funds delivers 200 basis points more returns a year on average over a 10-year period, net of management fees, than if one were to invest their money themselves, said Robert Boyda, head of Global Asset Allocation and senior portfolio manager for Manulife Asset Management in the US, where Manulife is the No 1 private pension scheme provider. It is also No 1 in Canada and No 2 in Hong Kong and Indonesia.

The difference of having funds professionally managed, Chong added, minimises the paralysis of herd mentality that individual investors are often caught in.

"When you invest yourself, you are hit by sentiment, you become emotional. When the market crashes, you panic and you sell. When the market rebounds, you miss the rebound because you're scared to jump back in wondering if [the uptick] is sustainable. A pension fund will take a long-term view and sit through [the shorter-term volatilities]," he said.

Sharing her experience in the Hong Kong market, Luiza Rosa Hung, CEO Manulife Provident Funds Trust Co Ltd, said the facilitation of an automatic enrolment on the private retirement scheme plans, while allowing the choice to opt out, could increase the chances of an individual saving more for their retirement. To ensure sustainability, the process for wage earners to make additional voluntary contributions should be simple, she added.

Source: This story appeared in The Edge Financial Daily on June 6, 2012

Tuesday, June 26, 2012

避免爭議‧單身人士應立遺囑


一個單身的成年人,如果去世前沒有立遺囑同時父母已不在世、在沒有配偶、子女的情況下,根據遺產法令的分配,遺產歸兄弟姐妹平分。 

一名自稱是單身的讀者說,她名下有一些資產,例如房屋、單位信託、銀行存款,汽車等等,她想知道,如果是亁兒子,可以直接割名給他嗎?
__________________________________________________________________________________
單身的女姓朋友應該立遺囑,立了遺囑,可以將財產分配好,列明其中一部份財產將分給亁兒子,假如沒有立遺囑,萬一不在世,遺產將根據遺產法令分配。

林若輝律師說,一個單身的成年人,如果去世前沒有立遺囑,同時父母已不在世、在沒有配偶、子女的情況下,根據遺產法令的分配,遺產歸兄弟姐妹平分。

財務顧問認為,單身的成年人,不論財富多少,都應該立遺囑,立遺囑的時候,可以依據個人的意願進行遺產分配,譬如可以分配給母校、宗教組織、社會團體,侄兒、侄女、外甥等,表明分配同樣或不同數目的款項。

我們有遇到這樣的情況,就是單身的成年人去世,生前沒有立遺囑,財產說多不多、說少不少,其兄弟姐妹也過得去,他們因沒有時間處理,沒有打理其遺產。

另外一種情況是,儘管是以遺產法令進行分配,兄弟姐妹平分,可是,兄弟姐妹之間各說各話、互不相讓,認為自己應該分多一些,因為無法達致協議,鬧到不歡而散,結果也是沒有人負責處理,遺產最後只好歸政府。

一個人在世時,若立了遺囑,可以根據自己的判斷、意願來分配自己的財產,其他人不能有任何異議

Source: (星洲日報/投資致富‧產業問診室)

Tuesday, May 8, 2012

保险金字塔


保险三重功用:保障,保证,保全

第一重:保障的是现有的生活
保全的是责任,这是风险管理

第二重:保证未来的幸福
保证的是未来,这是风险投资规划

第三重:保全已经创造的财富
保全的是成就,这是资产配置

 
物质生活水平不断走高,人们的幸福感却没增加,反而越来越低。我们必须面对失业问题,养老问题,医疗问题,子女上学问题,还要面临交通意外,生活食品安全的隐患,环境污染和新食物链中致癌物质的侵害,以及社会持续通货膨胀所需的理财规划等等。
 
对生老病死,无人可以回避,人们之所以表现出前所未有的忧虑,就在于对未来人生不测的担忧和恐慌。这些担忧无法为其他商品代替,可以人寿保险的十大黄金价值所解决:

1。爱有所继;2。亲有所奉;3。病有所医;4。壮有所倚;5。残有所仗;
6。钱有所积;7。幼有所护;8。老有所养;9。产有所保;10。财有所承 

我把以上的资料整理然后再把它编成了解图,以方便大家容易的参考:
 
 
click to enlarge the pic

希望这个解图可以让大家更容易的明白人寿保险的功能和价值

Sincerely, 
Tan Min Chin, CH3

Wednesday, May 2, 2012

Cost of Delay - Senario 3


Assumption:
1. Both Prospect A and B are age 30, they want to save for their retirement by the age of 55.

2. Prospect A saves 25 years with payment amount of RM6,000 with 8% interest.

3. Prospect B delays his saving 5 years later. He pays continuously until the age of 55 with the same payment amount and interest as Prospect A.

 
Conclusion:
1. Prospect A gets RM473,726.48 by the age of 55 with an amount of RM150,000 invested.
 
2. Prospect B is Postponing 5 years and he would get RM296.537.53 by the age of 55 with an amount of RM120,000 invested.
 
3. Although Propect B pay RM30,000 lesser than Prospect A, but Prospect A earn RM177, 188.95 more than Prospect B.  

Click to enlarge the picture


                                                           Click to enlarge the picture

The sooner you start, the MORE you get ;)

Sincerely,

Tan Min Chin, CH3
 

Sunday, April 29, 2012

Six budget superfoods

They are said to help us maintain weight, fight diseases, live longer and even look more beautiful, but as nutritionists point out, ‘superfoods’ are no more than a marketing term, and while not all foods are created equal, you can find options that give you the same benefits and at a much lower cost.

All foods have nutritional value, but in recent times, a group of them have been elevated to super status. Said to be chockfull of antioxidants, vitamins and other nutrients, they are also supposed to help slow the ageing process and make us smarter. And while items such as salmon, pomegranate and kiwi fruit are among the more conventional superfoods, every now and again, new items are given the super treatment.

Early this year, for instance, the BBC reported that a Dutch scientist had advocated bugs as a green superfood, arguing that insect dishes, boasting a lower carbon footprint in addition to being very nutritious, could be the answer to the global food crisis.

While that may be the case, nutritionists point out that “superfood” is a term created by marketers and does not exist technically. Nutritionist Tan Sue Yee says, “All types of foods contain their own nutrition profiles, and a varied diet is recommended to obtain a myriad of nutrients for health and well-being. The so-called ‘superfoods’ that we often read or hear about are mostly foods that are grown abroad. Thus, they are often less available and costly in Malaysia.”

Wong Yu Jin, a nutritionist and wellness coach, points out that the humble sweet potato has more antioxidants than blueberries, which are often listed as a superfood.

He adds that the term ‘superfood’ also gives the impression that once you have eaten such food; you don’t have to worry about other areas of your diet.

“The hype surrounding superfoods has become so hot that companies are now selling superfood pills, extracts and elixirs, claiming to offer various health benefits such as anti-ageing, cancer fighting and detoxification.”

If you’re keen on a super diet without breaking the bank, here are some alternatives.

1) Blueberries
Blueberries are a top choice of those promoting superfoods, and there is no doubt that they are high in potassium and vitamin C. A 100g serving packs 77mg of potassium, 9.7mg of vitamin C and 6mg of calcium, among others. But at RM16 for a 125g punnet, they are beyond the budget of many.


The alternative
The humble pineapple, which is widely available at supermarkets and local wet markets, is only RM3.50 a kg, and it packs a punch nutrition-wise. A 100g serving offers 97mg of potassium, 15.2mg of vitamin C and 24mg of calcium.





2) Kiwi fruit
Touted as a nutrient-rich food, the New Zealand export has more potassium than bananas or citrus fruits and is an excellent source of vitamin C. A 100g serving boasts 180mg of potassium and 86.7mg of vitamin C, but it also packs a wallop on the wallet at RM7.90 for a packet of four (weighing about 600g).



The alternative
While the guava (at RM4.90 a kg) may not boast a high concentration of potassium (29mg per 100g), it is still packed with nutrients. A 100g serving boasts 152mg of vitamin C, 10mg of vitamin A and 33mg of calcium.






3) Pomegranate
Pomegranates are being hailed as a superfood that can protect the heart. A 2004 BBC report states that scientists in Israel have shown that drinking a glass of pomegranate juice daily could reduce the risk of cardiovascular disease. A 100g serving of the fruit has 236mg of potassium, 10.2mg of vitamin C, 10mg of calcium and 4g of fibre. At around RM3.30 a fruit, it may put a large dent in one’s wallet.


The alternative
The dragon fruit (RM2.50 each) may lose out to the pomegranate in terms of calcium (8.8gm) and fibre content (0.9g of fibre) but it is way ahead where potassium (436mg) and vitamin C (14.5mg) are concerned.




4) Red wine
A glass of red wine each day keeps the doctor at bay, so we’ve been told. The idea behind this stems from something called the French Paradox. Researchers noticed that despite their high-fat diet, the French have 40% lower occurrence of heart disease than the Americans.  This has been attributed to their consumption of red wine, which has large doses of the antioxidant resveratrol. A 100ml serving of red wine has 0.198mg to 0.713mg of resveratrol.




The alternative
If you’re a teetotaller or would like to stick to a budget, don’t despair. Wong points to grape juice, which is RM3.99 a litre. Tan adds that other foods that have resveratrol include jackfruit and peanuts.








5) Salmon
Like blueberries, salmon is a favourite superfood, thanks to its rich bounty of omega-3 essential fatty acids. A 100g serving contains 2,950mg of omega-3 and 490mg of potassium. We’re told to eat salmon two to three times a week to lower our heart disease risk and help prevent arthritis and memory loss. We’re also told to eat wild-caught salmon rather than farm-raised ones because of the chemicals that have been found in the latter. However, at RM99 per kg, the fish is beyond the budget of many households.



The alternative
Indian mackerel (ikan kembung) is a great source of omega-3, with a 100g serving boasting of 1,450mg of omega-3 and 370mg of potassium. Sure, it’s not as chockfull of omega-3 as salmon but at RM10.90 per kg, it’s more affordable. In addition, the humble mackerel also offers more calcium (48mg compared with 12mg in salmon, per 100g serving) and iron (1.8mg vs 0.8mg) and has less fat (3.9g vs 6.34g). Another good alternative is canned sardines (RM3 for a 155g can).


6) Wheatgrass
One of the more trendy nutritional wonders, wheatgrass (taken as a juice) is said to have beneficial effects on one’s cholesterol level, blood pressure and immune response, as well as prevent cancer, thanks to its high concentration of chlorophyll. But at RM3.99 for a small cup, it’s pricey.





The alternative
To enjoy the benefits of chlorophyll, look for green vegetables such as broccoli or spinach. The latter is a great (and more palatable) substitute for wheatgrass and costs only RM1.20 per 100g. A 30g serving of spinach offers 128 mg of potassium (compared with 42 mg per 30ml of wheatgrass juice), 26 mg vitamin C (10mg) and 30mg calcium (7.2mg). 





Note: All nutritional information courtesy of Tan Sue Yee, a member of the Nutrition Society of Malaysia. The alternatives proposed are not meant to be exact replacements, as all foods are not created equal. Prices are just indicative and may vary from location to location.

Source: The Edge Malaysia, Images from Yahoo Image search