Private Retirement Scheme vs Regular Savings Plan

Private Retirement Scheme (PRS) was soft launched by the Prime Minister in July as an  additional financial tool to supplement our sole retirement funds, EPF. After the initial hoo-hah, the hype about PRS has cooled down with not much information on the details of the PRS available to the public. However, you can refer to this booklet for some basic info and Q & A on PRS.

Since we've got this simple booklet to explain everything about PRS, I'm not going to dwelve in details about PRS. What I'm interested in discussing about is the comparison between PRS and Regular Savings Plan (RSP). Typically for a PRS investment, we are talking about regular top-ups to the retirement funds with your spare cash, be it on monthly/quarterly/one-off basis. This is basically the same principle as RSP.

Now, as an investor, if you already have active RSP with one of the fund houses or via online unit trust distributors, such as Fundsupermart, you might be wondering, should i cancel my RSP and invest in PRS? As a quick recap, let's look at the advantages and disadvantages of investing in PRS:

Hwang PRS Launch

HWANG Investment Management Bhd (Hwang IM) has become the first of the eight appointed Private Retirement Scheme (PRS) providers to roll out its PRS products and services.

Hwang PRS Solutions, comprising four funds based on contributors' risk appetite and needs, are targeting guided annual return of between five per cent and 11 per cent.

Even though there is no minimum dividend policy, unlike the minimum 2.5 per cent that the Employees Provident Fund (EPF) offers and the funds are not capital-guaranteed nor protected, Hwang IM is confident that like other funds it manages, the PRS funds would perform just as good.

"The sound principles and good safeguarding policies put in place by the Securities Commission to some extent provides for a viable framework for this scheme to succeed. But like most things in life, nothing is guaranteed," said Hwang IM chief executive officer Teng Chee Wai.

Fundsupermart Referral Program

Fundsupermart Malaysia (FSM) has launched a referral program for their existing account holders to encourage the account holders to introduce new clients to FSM. This is how FSM referral program works:

1. FSM account holder submit the name, phone and email address of potential client to FSM.
2. FSM will send an email to potential client with an activation link to open an account.
3. Potential client fills in account opening form and activate online FSM account.

It's as easy as that. Of course, you cant run away from submitting from some supporting documents when submitting the account opening form. So you might ask, what's the catch for all this trouble?