The Private Retirement Scheme (PRS) was introduced in 2012 under the Capital Markets and Services Act 2007 to complement the EPF and bolster retirement savings for Malaysians.

Fourteen years on, acceptance remains modest. Industry assets under management stood at roughly RM 8.52 billion as of mid-2025. While Private Pension Administrator Malaysia (PPA) CEO Taufiq Iskandar has set a target of RM 10 billion by the end of 2026, the figure pales in comparison to the EPF’s asset base of RM 1.54 trillion as of mid-2026.

Most Malaysians treat retirement purely as the EPF’s responsibility—and to give credit where it is due, the EPF has performed admirably in recent years. Despite its sheer fund size, delivering returns above 5% to 6% provides dependable growth without members having to stress over downside risk.

The same cannot be said for PRS funds. A fund might gain 9% one year, only to pull back -5% the next.

That volatility is evident in the recent performance of the Public Islamic Asia Tactical Allocation Fund over the past three months:

24/07: PAID RM 1,000.00

26/08: PAID RM 511.00

29/09: PAID RM 480.00

Mark-to-Market Value: RM 1,783.69

Holding Period Return: -10.41%

Compare that with a direct accumulation in Public Bank shares over roughly the same window:

24/07: PAID RM 1,038.31

24/08: PAID RM 520.16

25/09: PAID RM 489.15

Mark-to-Market Value: RM 1,900.00

Holding Period Return: -7.21%

The unit trust fund has had a rough ride; when markets rally, capital gains can be strong, but during sector rotations, returns can swing negative quickly. Public Bank’s stock, on the other hand, displayed greater relative resilience: rising moderately in bullish runs while keeping downside drawdowns contained. Granted, markets have experienced mild pullbacks recently as sentiment digests the broader AI trajectory.

Taufiq noted that moving forward, the PRS framework is slated to allow selected blue-chip stocks as eligible investment options. This will be a welcome change. While actively managed equity funds have a role in retirement planning, high-quality blue chips—such as Maybank offering roughly 6% in dividend yield alone—undeniably deserve a spot on the menu as well.

For young savers, time remains their greatest asset. The ultimate hurdle is rarely just finding the perfect vehicle; it is finding the discipline and the wherewithal to start compounding early.