PEOPLE.IDEAS.PERFORMANCE

111 RM500 million from the Federal Government. The Pensions Trust Fund was administered by the Pensions Trust Fund Council with the Accountant General of Malaysia being responsible for the day to day administration and management of the affairs of the Pensions Trust Fund. On March 1, 2007, Kumpulan Wang Persaraan (Diperbadankan) (KWAP) or the Retirement Fund (Incorporated) was established under the Retirement Fund Act 2007(Act 662) to replace the repealed Pensions Trust Fund Act 1991 (Act 454).Under the new act, government agencies need to contribute to KWAP at 17.5% of the employee’s basic salary. With the incorporation of KWAP, all powers, functions, activities, assets and liabilities of the Pensions Trust Fund were totally taken over by KWAP (KWAP, 2017). The objective of KWAP is to manage the fund established under Section 13 of Retirement Fund Act 2007 (Act 662) towards achieving optimum returns on its investments. The Fund shall be applied towards assisting the Federal Government in financing its pension liability. Specifically, the functions of KWAP are as follows: (I) Management of contributions from the Federal Government, Statutory Bodies, Local Authorities and other Agencies; (II) Administration, management and investment of the Fund in equity, fixed income securities, money market instruments and other forms of investments as permitted under the Retirement Fund Act 2007 (Act 662); (III) Management and payment of pension. In line with the Government Transformation Programme, KWAP has been given the responsibility to take over the Public Service Department role in managing and processing retirement benefits for the government servants. This initiative is expected to benefit the pensioners in terms of providing them with a better service as well as improve efficiency in the pension payment process. The pension and EPF are compulsory participation for both employees and employers. Employers who want to provide additional benefits to employees may either contribute to EPF at a higher contribution rate or provide a private retirement scheme. Private Retirement Schemes (PRS) is a voluntary long-term savings and investment scheme designed for retirement. The PRS was introduced by the Private Pension Administrator (PPA) in addressing the inadequacy of retirees’ savings in meeting their retirement needs to accommodate the increasing life expectancy and rising living standards. This scheme was launched in Malaysia in July 2012 with an aim of aiding the adequacy enhancement and the coverage expansion of retirement benefit to the general public as a whole. PRS seeks to enhance choices available for all Malaysians whether employed or self- employed to supplement their retirement savings under a well-structured and regulated environment. Each PRS offers a choice of retirement funds from which individuals may choose to invest in based on their own retirement needs, goals and risk appetite. The fund options under PRS are intended to enhance long-term returns for members within a regulated framework. The PRS is an integral feature of the private pension industry as part of the Economic Transformation Programme, with the objective of improving living standards for Malaysians at retirement through additional savings. With the regulatory framework developed by the Securities Commission Malaysia, PRS forms the 3rd pillar of Malaysia’s multi pillar pension framework (Private Pension Administrator Malaysia, 2017). PRS functions and operates similarly to EPF with a slight difference in benefits and returns. The contributors account, PPA Account is split into Account A; comprises about 70% of the contributed amount and can be withdrawn upon reaching retirement age where as AccountB; 30% of the amount and can be withdrawn once a year. Contributors are given the options from several funds which cater for different age groups which are growth fund,