Category: Featured in the Media

THE newly-launched Retirement Income Adequacy (RIA) framework by the Employees Provident Fund (EPF) aims to address retirement planning in Malaysia amid rising living costs and an aging population.

While the EPF should be commended for deriving a three-tiered savings benchmark system for achieving various target monthly expenditures in retirement, questions about its feasibility and effectiveness remain.

Are the Tiers Feasible?

Yes, the three tiers of the RIA framework are feasible. However, achieving the desired or target income level in retirement depends on having a sufficiently long savings runway, as well as ensuring income adequacy during one’s working years in order to save in a manner that achieves one of the three RIA benchmarks.

This requires careful financial planning, disciplined savings, good and unbiased financial advice, and strategic management of financial resources over time.

The RIA framework lays the groundwork, but its success hinges on two additional issues: the ability of individuals and policymakers to foster a culture of financial literacy and proactive saving early in life, and financial professionals giving good, unbiased, and cost-effective advice – as well as suitable financial products – to achieve the individual’s particular RIA target income.

Addressing the Rising Cost of Living

Does the RIA Framework fully address the rising cost of living? Ideally, retirement payouts under the framework should be indexed to inflation, cost of living, or standard of living metrics to ensure financial security.

Without such adjustments, the framework risks losing relevance – as well as purchasing power – in an inflationary and volatile economic environment.

Additionally, the government should consider incorporating a form of tail risk insurance into the framework.

For example, structuring the RIA scheme as a life annuity of payouts rather than a term annuity would ensure lifelong income security. This is especially true for individuals who outlive their planned retirement period, the average life expectancy in Malaysia notwithstanding.

To accommodate for these tweaks, the RIA savings levels table needs to be recalculated.

Moreover, a needs-based social security scheme would support those unable to meet the savings threshold, hence providing a more comprehensive approach to our social security net.

Is Malaysia Facing a Retirement Crisis?

EPF’s recent data showing only 36 per cent of active formal members meet the Basic Savings level of RM240,000 by age 55 signals a looming retirement crisis. This challenge is particularly acute for those with insufficient financial capacity to save adequately.

To address this, potential solutions include:

• Extending Work Life: Encouraging individuals to remain in the workforce longer, with appropriate upskilling and flexible continuing education elements provided, which can help increase savings and delay retirement fund depletion.
• Increasing Savings Rates: Promoting higher contributions during working years can help offset future shortfalls.
• Monetising Assets: Homeowners can explore reverse mortgage schemes to convert home equity into retirement income.

While these solutions offer pathways forward, they must be complemented by robust policymaking and systemic reforms to ensure their effectiveness.

The Way Forward

Malaysia’s retirement challenges require more than surface-level solutions.

Again, the RIA Framework is a commendable step forward, but addressing the complexities of retirement savings and adequacy over one’s lifecycle demands comprehensive, data-driven strategies and active collaboration among individuals, the academy, institutions, and the government.

It also involves coming up with feasible strategies for those who will not be able to make the cut, no matter what.

By fostering financial preparedness and implementing innovative policies, Malaysia can turn its retirement challenges into opportunities for sustainable growth and social stability.

*The writer is deputy chief executive officer and practice professor of finance at the Asia School of Business.

Originally published by NST Business Times.

For most retirees, a secure and sufficient income stream during retirement is the ultimate goal. Traditionally, this is achieved through either a defined benefit (DB) or defined contribution (DC) plan, where contributions made during work­ing years help build a retirement incom. While DB plans place the respon ibility OD institutions, such as governments or private firms, DC plans shift the burden to inctividuals. Herein lies the challenge — managing retirement funds can be daunting without financial expertise.

DB plans,whilesimple to understand,are in­ creasingly unsustainable,with many undcrfunda ed or in financial distTeSs. Consequently, many DB plans are converting ca DC schemes. In a DC plan, individual accumulate savings over time, which ideally would be converted at retirement into an inflation-indexed life annuity,ensuring a stable income adjusted for cost of living.

Read the full article HERE.
Originally published by The Edge.

The newly launched Retirement Income Adequacy (RIA) Framework by the Employees Provident Fund (EPF) aims to address retirement planning in Malaysia amidst rising living costs and an ageing population. While EPF should be commended for deriving a three-tiered savings benchmark system for achieving various target monthly expenditures in retirement, questions about its feasibility and effectiveness remain.

Are the Tiers Feasible?

Yes, the three tiers of the RIA Framework are feasible. However, achieving the desired or target income level in retirement depends on having a sufficiently long savings runway, as well as ensuring income adequacy during one’s working years in order to save in a manner that achieves one of the three RIA benchmarks. This requires careful financial planning, disciplined savings, good and unbiased financial advice, and strategic management of financial resources over time.

The RIA framework lays the groundwork, but its success hinges on two additional issues: The ability of individuals and policymakers to foster a culture of financial literacy and proactive saving early in life and financial professionals giving good, unbiased and cost-effective advice — as well as suitable financial products — to achieve the individual’s particular RIA target income.

Addressing The Rising Cost Of Living

Does the RIA Framework fully address the rising cost of living? Ideally, retirement payouts under the framework should be indexed to inflation, cost of living or standard of living metrics to ensure financial security. Without such adjustments, the framework risks losing relevance — as well as purchasing power — in an inflationary and volatile economic environment.

Additionally, the government should consider incorporating a form of tail risk insurance into the framework. For example, structuring the RIA scheme as a life annuity of payouts rather than a term annuity would ensure lifelong income security. This is especially true for individuals who outlive their planned retirement period, the average life expectancy in Malaysia notwithstanding.

To accommodate these tweaks, the RIA Savings Levels Table needs to be recalculated.

Moreover, a needs-based social security scheme would support those unable to meet the savings threshold, hence providing a more comprehensive approach to our social security net.

Is Malaysia Facing a Retirement Crisis?

EPF’s recent data showing only 36% of active formal members meet the “Basic Savings” level of RM240,000 by age 55 signals a looming retirement crisis. This challenge is particularly acute for those with insufficient financial capacity to save adequately.

To address this, potential solutions include:

• Extending Work Life: Encouraging individuals to remain in the workforce longer, with appropriate upskilling and flexible continuing education elements provided, which can help increase savings and delay retirement fund depletion.
• Increasing Savings Rates: Promoting higher contributions during working years can help offset future shortfalls.
• Monetising Assets: Homeowners can explore reverse mortgage schemes to convert home equity into retirement income.

While these solutions offer pathways forward, they must be complemented by robust policymaking and systemic reforms to ensure their effectiveness.

The Way Forward

Malaysia’s retirement challenges require more than surface-level solutions. Again, the RIA Framework is a commendable step forward, but addressing the complexities of retirement savings and adequacy over one’s lifecycle demands comprehensive, data-driven strategies and active collaboration among individuals, the academy, institutions and the government. It also involves coming up with feasible strategies for those who will not be able to make the cut, no matter what.

By fostering financial preparedness and implementing innovative policies, Malaysia can turn its retirement challenges into opportunities for sustainable growth and social stability.

The author is the Deputy Chief Executive Officer and Practice Professor of Finance at the Asia School of Business

Originally published by Business Today.

LANGKAH memperkenalkan tiga tahap dalam Rangka Kerja Kecukupan Pendapatan Persaraan (RIA) dilihat realistik bagi memastikan keselamatan kewangan ketika persaraan.

Timbalan Ketua Pegawai Eksekutif Asia School of Business, Joseph Cherian berkata, tahap pendapatan sasaran bergantung kepada perancangan kewangan yang rapi, disiplin menyimpan dan pengurusan sumber kewangan secara strategik sepanjang tempoh bekerja.

Katanya, bayaran pencen dalam rangka kerja ini seharusnya diindekskan kepada inflasi atau kos sara hidup bagi memastikan keselamatan kewangan ketika persaraan.

“Namun, usaha ini sahaja tidak mencukupi tanpa adanya perlindungan risiko jangka panjang seperti anuiti hayat menerusi Kumpulan Wang Simpanan Pekerja (KWSP).

“Sekiranya individu hidup lebih lama daripada tempoh persaraan yang dirancang, simpanan mereka berisiko habis.

“Oleh itu, rangka kerja RIA perlu memberi jaminan pendapatan sepanjang hayat,” katanya dalam kenyataan.

Selain itu, beliau turut menekankan kepentingan skim keselamatan sosial berasaskan keperluan untuk membantu individu yang kurang berkemampuan.

Menurutnya, berdasarkan laporan KWSP pada Oktober 2024 menunjukkan hanya 36 peratus ahli aktif mencapai tahap simpanan asas RM240,000 pada usia 55 tahun dan ia satu statistik yang membimbangkan.

Joseph menyifatkan situasi ini sebagai tanda awal krisis persaraan, khususnya bagi mereka yang tidak memiliki tempoh simpanan mencukupi.

“Antara langkah penyelesaian yang boleh diambil adalah dengan melanjutkan tempoh bekerja, meningkatkan simpanan atau mengurangkan perbelanjaan pada masa hadapan.

“Selain itu, kita boleh menggunakan aset seperti rumah melalui skim gadai janji terbalik (reverse mortgage) dan walaupun isu ini rumit, ia boleh diatasi melalui strategi berasaskan data, dasar kukuh dan kerjasama menyeluruh antara kerajaan, sektor swasta dan rakyat,” katanya.

Beliau berkata, bagaimanapun langkah menyeluruh diperlukan untuk memastikan persaraan yang terjamin oleh pekerja di negara ini.

Originally published by Harian Metro.

PETALING JAYA: Substantial policy backing, societal buy-in and integration with broader socio-economic measures are needed to ensure the success of the Employees Provident Fund’s (EPF) new three-tier savings framework.

With the aim to serve as a guide to EPF members on the savings required for a comfortable retirement, the new Retirement Income Adequacy (RIA) Framework was launched yesterday in tandem with the Belanjawanku 2024/2025.

Set to launch in January 2026, the three tiers are namely basic savings, which covers basic necessities; adequate savings, which provides a reasonable quality of life; and enhanced savings to support a higher quality of life.

UCSI University Malaysia finance associate professor and CME research fellow Dr Liew Chee Yoong said the RIA framework sets a structured, multi-tiered system to cater to the varying financial realities of Malaysians and is a progressive shift in managing retirement funds.

“This shift stands out because it recognises the multi-faceted challenges of retirement planning in a country facing rising living costs and a significant informal sector.

“The framework’s comprehensive approach suggests EPF’s intent to transition from a savings-focused model to an income-focused one, crucial for addressing financial security in retirement,” he told StarBiz.

Originally published by The Star.

Kelestarian merupakan segmen baharu yang dilihat berupaya untuk memacu masa depan lebih mampan buat negara. Penerokaan dalam sektor teknologi dan kewangan hijau dilihat membuka ruang baharu dalam menjana bukan sahaja ekonomi, malah penyelesaian mampan ke arah membentuk masa depan Asia Tenggara. Bagi membincangkan peranan penting sektor tersebut, Asia School of Business (ASB) menghimpunkan pemimpin global, inovator, ahli akademik dan penggubal dasar dalam Sidang Kemuncak Kepimpinan Green@ Work 2024 di Kuala Lumpur baru-baru ini.

Menurut Ketua Pegawai Eksekutif, Presiden yang juga Dekan ASB, Profesor Sanjay Sarma, sidang kemuncak tersebut menyediakan platform dinamik untuk menangani isu-isu mendesak di seluruh sektor perniagaan, tenaga dan kewangan, sekali gus mencetuskan perbincangan mengenai kerjasama serta cara memacu masa depan lebih mampan bagi rantau ini. “Sepanjang sidang kemuncak berkenaan, perbincangan utama kita adalah berkisar tentang peranan transformatif teknologi hijau dalam memacu daya tahan ekonomi dan kelestarian alam sekitar.

Read the full article HERE.
Originally published by Kosmo.

Careers in technology are popular, but is the tech industry right for you?

Download the free BusinessBecause Careers In Technology Guide to find out all you need to know about this highly popular career path. 

Inside, you’ll find a breakdown of the different career paths available to business school graduates in tech, as well as the salaries and benefits on offer for those entering the sector—from Big Tech firms like Amazon and Google to innovative tech startups. 

You’ll find out what makes tech a top career path for ambitious professionals looking to work in one of the world’s most dynamic and rewarding industries, learn which skills you need to successfully navigate a career in tech, and uncover your prospects if aiming to begin your journey in the sector today. 

Plus, we also provide key insights from career experts and business school alumni on how to launch your career in the sector. You’ll find advice and insights from previous students now working with the likes of Microsoft, Google, Amazon, Adobe, and TikTok. 

Careers in technology: 5 top skills 

1. Adaptability 

Tech companies are often the first to adopt innovative new tech and therefore evolve at a faster pace than firms in many other industries—just look at how much money the sector is investing in generative AI. Working in technology requires you to be able to match that pace, ready to harness your skills in new areas as they emerge.

2. Stakeholder communication 

The typical tech firm comprises an array of functional teams, ranging from sales to marketing to engineering. Navigating the sector requires you to be able to operate and lead across these functions, while you must also be able to communicate with external stakeholders including corporate clients and everyday customers.

3. Data literacy 

Not all tech roles focus on working with technology itself, however industry insiders note the benefits of being data literate in allowing you to better serve customers and communicate across teams more effectively. As the industry continues to evolve, knowledge of fundamental data concepts can also prevent you falling behind.

4. Problem solving 

Fundamentally, technology is a major contributor to the world economy because it provides solutions for consumers and corporations. If you want to work in tech you need to adopt this mindset; prepared to make the link between technology and its use cases and solve the problems that arise as you strive to achieve new things.

5. Passion 

As the previous skills indicate, working in tech is about being part of an innovative space; where nothing stands still, and new things occur every day. Being passionate about using new technologies, discovering new products, and unearthing new solutions is important if you want success and longevity in the industry.

Originally published by BusinessBecause.

SUSTAINABLE living is not a new concept; it is now a vital topic in light of the profound changes affecting the little blue planet. For too long, humanity has “repaid” Earth’s generous gifts with harmful emissions, unleashing dangerous gases that have dire repercussions for the environment.

Climate change, exacerbated by toxic emissions from large manu- facturers and a careless public, has wreaked havoc on the planet. Rising sea levels, melting ice caps and relentless heat waves have become so commonplace that they often fail to provoke a second thought.

Read the full article HERE.
Originally published by New Straits Times.

Green technologies offer promising solutions to waste challenges in ASEAN. L-R: Zain Almohdzar (Co-Founder of Klean), Sarah Cragg (Head of APAC Partnerships at The Earthshot Prize), and M. Huzaini Ghazali (Chief Strategy and Portfolio Officer, Gentari).

KUALA LUMPUR: The Green@Work Leadership Summit 2024, hosted by Asia School of Business (ASB), brought together global leaders, innovators, academia, and policymakers to discuss the crucial role of green technologies, green finance, and sustainable solutions in shaping ASEAN’s future. The Summit provided a dynamic platform to address pressing issues across the business, energy, and finance sectors, sparking discussions on collaboration and ways to drive a more sustainable future for the region.

In his opening address, Encik Muhammad Hidayatullah Bin Nasrul, from the Ministry of Natural Resources and Environmental Sustainability, highlighted Malaysia’s commitment to becoming a regional leader in sustainability. “Malaysia is at a critical juncture where sustainability is essential, not optional. Initiatives like the Bursa Carbon Exchange and rising renewable energy investments signal our commitment to lead in sustainable development. Collaboration across sectors is key to ensuring our nation achieves its green goals while inspiring ASEAN to prioritize environmental resilience,” he said.

Throughout the Summit, key discussions revolved around the transformative role of green technology in driving economic resilience and environmental sustainability. Professor Sanjay Sarma, CEO, President, and Dean of ASB, emphasized that green technology is no longer a trend but a vital solution to the existential challenges the world faces. “The global green tech market is projected to reach USD 62.4 billion by 2030, with Southeast Asia leading the way. Embracing these innovations is essential for ASEAN’s economic and environmental future,” he said.

The importance of circular economy models in scaling sustainable solutions was a key theme, with Zain Almohdzar, Co-Founder of Klean, Sarah Cragg Head of APAC Partnerships at The Earthshot Prize and M. Huzaini Ghazali, Chief Strategy and Portfolio Officer at Gentari discussing how transformative green technologies can address waste challenges in ASEAN.

Zain noted, “Circular economy initiatives are crucial in addressing waste challenges in ASEAN, where the region generates over 150 million tons of waste annually. Innovative technologies, such as advanced recycling systems and digital waste management platforms, are key to scaling these solutions and could potentially reduce landfill contributions by 25% within the next decade.”

Blended finance also emerged as a vital mechanism in supporting the green transition. Professor Joseph Cherian, Deputy CEO of ASB and Practice Professor of Finance, emphasized how blended finance can bridge the funding gap by bringing governments, businesses, and investors together, hence accelerating the green transition. “Blended finance is not just a tool, it is a catalyst that can unlock trillions in investments for green initiatives. From accelerating carbon market development to funding renewable energy projects, it creates pathways for public-private partnerships that drive large-scale impact,” he explained.

The intersection of green finance and regulation was another focal point, featuring a panel discussion moderated by Johan Rozali-Wathooth, CEO of Bintang Capital Partners. The panel included Muhammad Rizal Azmi, AVP of Business Development & Sales at Bursa Carbon Exchange, Salmah Bee Mohd Mydin, Executive Director of Market Development at Securities Commission Malaysia and Yin Shao Loong, Deputy Director of Research, Khazanah Research Institute. They explored how evolving regulatory frameworks can unlock new green financial solutions. Salmah Bee highlighted the rapid growth of Malaysia’s green bond market, noting a 50% increase in issuance over the past two years. “Regulatory frameworks must evolve to not only encourage but also scale these green financial solutions across ASEAN,” she emphasized.”

The Summit concluded with a call to action for participants to translate the insights shared into actionable solutions, reinforcing the collective responsibility to foster a sustainable future for ASEAN

Originally published by The Exchange Asia.

There are two common misconceptions about SG, the movement towards increasing firms’ focus on sustainability, social responsibility and ethical governance. First, that ESG is merely a compliance issue, and second, that it primarily concerns what happens within the firm. 

Read the full article HERE.
Originally published by The Star.