KUALA LUMPUR, Feb 21 — The Securities Commission Malaysia (SC) has liberalised regulations on Private Retirement Schemes (PRS) to enhance the competitiveness of the industry.

The move provides more flexibility in asset allocation for PRS funds, such as allowing conservative funds to invest in foreign markets and exchange-traded funds based on physical gold to increase asset diversification into alternative investments.

In a statement today, the SC said PRS providers are now required to gradually move their members to a less risky fund in accordance with their age and to commensurate with members’ risk tolerance.

"This will help to reduce the market risk exposure for members who opt for default funds (growth, moderate and conservative) that are matched against their age,” it said.

Following Budget 2020, the SC said PRS members are permitted to make pre-retirement withdrawals without incurring a tax penalty for healthcare and housing purposes.

"Members are allowed to make withdrawals for self or immediate family members to cover for 91 types of illnesses, including paying for medical equipment or medication for the approved illnesses.

"The withdrawal for housing can be used to finance the building or purchase of a residential property or reducing a housing loan,” it said.

Aimed at helping Malaysians save for their retirement, PRS is a voluntary long-term savings and investment scheme set up by the SC in 2012.

Currently, there are eight PRS providers serving more than 455,000 members nationwide.

As at end-2019, the total size of the industry stands at RM3.5 billion. — Bernama