prs as the 1 st choice, retirement vehicle

• Islamic Asset Management House – Malaysia

• Best Bond Fund Group Award• Best Bond MYR Fund (3 yrs)• Best Bond MYR Fund (5 yrs)

• Asset Management Company of the Year

• World Finance Investment Management Company of the Year, Malaysia

(Not for circulation)

1

PRS as the 1st choice,retirement vehiclePRS as the most important,complementary retirement vehicle






Malaysia’s Life Expectancy

2

Source: World Bank

Malaysia life expectancy in 1960

59

Notional Retirement Age

55

Funding needed = 4 years

Malaysia life expectancy in 2010

74

Notional Retirement Age

55 / 60

Funding needed = 14-19 years






EPFEPF

Retirement Planning

3

StocksStocksChildren’s

contributionChildren’s

contribution

Fixed DepositFixed

DepositPropertyProperty

Unit TrustsUnit

TrustsInsuranceInsurance






Retirement Planning

4

Stocks

Market cap of Bursa Malaysia stood at RM 1.208 tri at end-2011

Unit Trust

Industry AUM of RM 133,691.30 mil as at 31 Aug 2012

Insurance

Industry AUM of RM 178,306.20 mil as at end-2011

Deposits

RM 294,392.60 mil worth of total deposits by individual as at Aug 2012

RM 166,330.80 mil worth of total deposits by enterprise as at Aug 2012

EPF

Manages RM 488.50 bil worth of assets

Childrens Contribution

?

Source:The Sun, 25 June 2012AmInvestment Services, 30 Sept 2012Bank Negara Malaysia, 30 Sept 2012The Business Times, 24 July 2012

You’re lucky if your children don’t ask you for m

oney






5

Income per person (GDP/capita, PPP$* inflation-adjusted)

85

80

75

70

65

60

55

50

45

40

35

30

25

20

400 1,000 2,000 4,000 10,000 20,000 40,000

Lif

e ex

pec

tan

cy (

year

s)

* Purchasing Power Parity in USD.

Life Expectancy & GDP Growth






6

Malaysia: The need for an alternative pension system






Retirement: not what it seems to be

7

Boomers haven’t saved enough

Retirement plan needed for Malaysians

Only 5% Ready for Retirement in Malaysia

More failing to save for pension

Enough money for retirement?Even the rich say NO

Source:The Star, 27 May 2007 BBC News, 21 May 2012CNBC, 14 Dec 2011Canadian Press, 28 June 2012The Star, 28 Sept 2011






Did You Know?

8

There are 13 million EPF contributors

But only 6.3 million are active members

X% has savings of >RM150,000

Source: The Sun Daily, 21 August 2012

X% has savings of RM50,000 – RM150,000

X% has savings of <RM50,000

21.74%

70.89%

7.37%






Have Malaysians Saved Enough?

9

X% of people utilise their EPF savings within 3 years



Source: EPF Survey 2003 & EPF Annual Report 2011

14%

50%

70%

X% of people have only < RM100,000 EPF savings86%

How many people have EPF savings of > RM 1,000,000Only ~11,000






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Your retirement plan should address these questions

Are your retirement savings sufficient for :Rising cost of livingUnexpected medical costsInability to work after retirement age

Will you face these financial situations?No emergency funds

Need to borrow money from others

Can not afford to pay bills






What is PRS?

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• Voluntary long-term investment scheme

• Complements mandatory contributions made to EPF

• To help individuals accumulate savings for retirement & plan for:

• Possible health & care costs• Comfortable standard of living• Inflation

• Each scheme has a range of funds to accommodate different retirement needs, goals & risk appetite

• Regulated by SC






Investment Options

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Members choose PRS Providers and funds according to their risk appetite & investment profile

Default option for members who select their PRS Provider but do not specify a fund option

or

1

2

Employer may channel contributions to a particular PRS Provider, with employees choosing the type of funds offered by that PRS Provider

Employer may channel contributions to a particular PRS Provider, and where employees do not make a fund selection, contributions can be channeled to default option of that PRS Provider

or

1

2

Individuals

Employers






Our First Products - 3 Core Funds

No. Fund type Age Group (years)

Asset Allocation

1 AmPRS -Conservative Fund

50 and above • Maximum 20% in equities;

• 80% in bonds and money

market instruments

• Minimum 20% in money

market instruments

2 AmPRS -Moderate Fund

Between 40 - 50

Maximum 60% in equities

3 AmPRS - Growth Fund

Below 40 Maximum 70% in equities

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How will PRS benefit you ?

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Supplements retirement savings• Alternative retirement savings to complement EPF

PRS is flexible•Allows you to choose funds that best suit your investment needs

PRS is transparent•PRS members have timely access to fund performance & information

Helps you maintain a lifestyle that you desire

Tax relief

Individuals






How will PRS benefit you ?

15

Tax deduction of employer’s contribution in addition to statutory EPF contribution

Vesting flexibility

Incentive for staff retention & recruitment

Opportunity to provide employees with potentially better returns than FD rates

Improved investment choices for employees through a range of funds under the PRS

Employers






Key Attractions on PRS by Company Preferences

16

Source: Hay Group, 23 July 2012






Which human capital issue does PRS help address ?

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A scheme for both retention & recruitment; benefits both the employee & the employer

Source: Hay Group, 23 July 2012






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Building PRS as the ideal retirement planning vehicle in Malaysia






3 Pillars Pension Framework

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Source: Pension Systems and Reform Conceptual Framework by Robert Holzmann, Richard Paul Hinz and Mark Dorfman, June 2008

1stPillar

2nd

Pillar3rd

Pillar

Non-contributory

basic benefits financed by the

state, fiscal conditions permitting

Mandatory defined

contribution plan with

independent investment

management

Voluntary taking many forms (e.g. individual savings; employer

sponsored; defined benefit

or defined contribution)

EPF PRS






20

A look at Australia’s Superannuation System






Pension Assets Allocation

21

Source: Towers Watson & secondary sources. Methodology does not provide an estimate for 2011.

Public vs Private Sector By market values (2010)

80% of Australia’s pension assets is held by Private sector






Australia: A country that thrives on Super

Source: Australian National Accounts, 2008

52%

58%

AUD$916 Bln (2008) AUD$2,276 Bln (2008)

Increase inAUM growth of

$1,360 Bln

22






The success of Super

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• Increasing trend of people moving towards a pension system.

• Retirees can keep their funds in super pension while enjoying periodic withdrawals

Source: APRA & Australian Yearbook 2008

Growth of Superannuation Pensions






Making PRS the ideal choice (8P2C)

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1. Product

2. Performance

3. People

4. Public Awareness & Education

5. Process

6. Place

7. Physical Evidence

8. Positioning

9. Customer

10.Competitor






Product: Pacesetters not followers

25

2011AmAsia Pacific REITsFirst Pure REITs fund in Malaysia

Product innovators in an ever evolving market






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Risk & Return - Malaysia

*Corporate Bonds are based on data from Jan 2004 to Dec 2011

Source: Bloomberg, Quantshop. Data extracted 24 August 2012.

Optimal adjusted risk returns

There is opportunity for low risk assets to deliver optimal adjusted risk returns.






Performance

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* Lipper Investment Management for the period 31 December 2003 to 31 December 2011, based on total returns whichincludes income from dividends and interest as well as capital appreciation. Performance shown is also net ofmanagement fees.** Maybank 12-month fixed deposit rate






People

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Andrew Wong,Chief Investment Officer, Equities

Best Islamic Equity Fund (Global): Am Namaa' Asia Pacific Equity Growth Islamic Finance News Awards 2011Mastermind behind AmAsia Pacific REITs, Malaysia’s first pure REITs fund

Goh Wee PengChief Investment Officer, Fixed Income

The Most Astute Asian Local Currency Investor: The Asset Benchmark Research 2011One of The Most Astute Asian G3 Denominated Bonds Investors: The Asset Benchmark Research 2011Mastermind behind AmDynamic Bond, the best MYR bond fund in Malaysia






Our Awards

Asset Management Company of the Year 3

(2 Consecutive Years)

The Most Outstanding Islamic Fund Manager 4

1. World Finance Investment Management Awards 2012, March 20122. The Asset Triple A Awards for Islamic Finance 2012, June 20123. The Asset Triple A Investment Awards 2011, September 20114. KLIFF Islamic Finance Awards 2011, September 20115. Islamic Finance News Awards 2011, September 2011

1. World Finance Investment Management Awards 2012, March 20122. The Asset Triple A Awards for Islamic Finance 2012, June 20123. The Asset Triple A Investment Awards 2011, September 20114. KLIFF Islamic Finance Awards 2011, September 20115. Islamic Finance News Awards 2011, September 2011

World Finance Investment Management Company of the Year, Malaysia 1

Islamic Asset Management House – Malaysia 2

Best Islamic Equity Fund (Global)Islamic Finance News Awards 20115






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Best Fund Group (Bond)

Ending December 31, 2011

for 5 Consecutive Years

Winner of 3 awards at The Edge-Lipper Malaysia Fund Awards 2012**Best Bond Fund Group & Best Bond Fund

*In terms of Funds Under Management (FUM) for Unit Trusts Funds and Separately Managed Funds.Source: Malaysian Association of Asset Managers (MAAM) & Lipper Investment Management & AmInvestment Management, 31 December 2011**Source: The Edge- Lipper Malaysia Awards 2012, February 2012

AmDynamic BondBest Bond Malaysian

Ringgit Fund (3 Years)Ending December 31, 2011


AmDynamic BondBest Bond Malaysian

Ringgit Fund (5 Years)Ending December 31, 2011


No.1 Fixed Income Provider in Malaysia*






Public Awareness & Education

PRS 101 Workshop organised for Management & Staff

Provision of marketing materials & support PRS educational materials (booklet, flyer) Pre & Post Servicing from our RMs

PRS also works as a Retention scheme Motivational scheme

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Look out for us on BFM radio






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System DesignEquityAdequacySustainabilityPredictabilityRobustness

PenetrationEmployeeEmployers

GovernanceSystem levelTrustee levelRegulatory & supervision

IncentivesFor membersFor employersFor providers

Economic Context

Maximising long term retirement savings for members

Aging & Social Welfare system

Components

3 Pillars for Old Age Protection

Pension System Components

Source: Ernst & Young, 2012






33

Never Too Late to Quit

Never Too Early to Start






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DisclaimerThis publication has been prepared for general information only and is not to be taken as containing any advice or recommendation. Wherever possible, care has been taken to ensure accuracy, and all facts and figures are correct at the time of publication. AmInvestment Services Berhad shall not be held liable, for any loss or damage of whatsoever nature and howsoever caused, directly or indirectly, for readers’ decisions made on their finances, investments or anything whatsoever.

The information contained in this promotional material is general information only and does not take into account your individual objectives, financial situations or needs. You should seek your own financial advice from an appropriately licensed adviser before investing.

Islamic Asset Management House – Malaysia*

Asset Management Company of the Year, Malaysia for AmInvestment Bank Group’s Fund Management Division (2 consecutive years)**

Winner of 3 awards at The Edge-Lipper Malaysia Fund Awards 2012*** – Best Bond Group Award and Best Bond MYR Fund (3yrs & 5yrs) for AmDynamic Bond

*The Asset Triple A Awards for Islamic Finance 2012, June 2012

**The Asset Triple A Investment Awards 2011, September 2011

***The Edge- Lipper Malaysia Awards 2012, February 2012

prs as the 1 st choice, retirement vehicle

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