China Radio International reports that Prime Minister Najib Razak said: “The pension fund will promote greater diversity in the management of long-term savings. Alongside this, the ability of fund managers to invest directly will be facilitated through expanding the range of legal structures for the pooling of investments.”
According to the news report, the scheme was applauded when it was unveiled two years ago considering there were about two million out of 28 million Malaysians without any formal pension scheme, but there were also concerns that the people would be reluctant to invest in the private pension scheme over uncertainties on the returns it can generate.
The Malaysian Securities Commission, which approved the private retirement scheme, said the scheme would operate within a robust and regulated framework and promised that the people would be incentivised to participate in the fund.“It is a supplementary to the [Employee Provident Fund] EPF system. You have qualified players who will offer potential upside in terms of returns therefore people will be incentivised to participate,” Ranjit Ajit Singh, the managing director of the Malaysian Securities Commission told the press, according to CRI.