Private Retirement Scheme

Malaysia’s pension reform may boost Islamic funds

Because of sweeping government reforms in their pension system, Malasians are most likely to allocate part of their retirement contributions to Islamic investments. Since the Employees Provident Fund (EPF) has limits in investing syariah-compliant areas, the new, voluntary Private Retirement Scheme (PRS) is meant to supplement it. Thus, contributors will be able to allocate money to a wide range of products offered by private-sector fund management firms including syariah-compliant investment. The result is a potential rise in the amount of money going into Islamic instruments.

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