Great Eastern rolls out the Great Retirement Plan
Published: 2012/11/20
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FIRST-OF-ITS KIND: It was is designed to meet required criteria of a deferred annuity plan to qualify for new tax relief of RM3,000
GREAT Eastern Life Assurance (Malaysia) Bhd launched a first-of-its-kind retirement plan with guaranteed yearly income for 10 or 15 years, depending on their choice of retirement age of 55 or 60.
Director and chief executive officer Datuk Koh Yaw Hui said the Great Retirement Plan launched last Friday is intended to help policyholders supplement their retirement funds.
"Most people do not have sufficient funds at retirement but one should enjoy their golden years, spend quality time with their loved ones and live their dreams after working hard for all their life," he said.
Great Retirement Plan is designed to meet the required criteria of a deferred annuity plan, to qualify for the new tax relief of RM3,000 announced in the 2012 Budget.
The tax relief was provided by the government to help the Malaysian public start a supplementary retirement fund.
The insurer said the launch is timely as it allows the tax-paying public to immediately enjoy the tax relief before the close of the year 2012.
Annuity products are fairly new in the Malaysian market unlike the more readily available life insurance products.
While the life insurance products have core benefits focussed on death benefits, annuity products are the complete opposite, with its benefits focusing purely on survival benefits.
"We are looking to launch more variations of annuity products, in support of Bank Negara Malaysia's Financial Sector Blueprint, to promote the pension market as the third pillar of retirement funding," Koh said.
The insurer's first product was designed to be fully guaranteed in view of the novelty of annuity product in Malaysia.
"We believe a lot of educational awareness will be required to help the general public understand the concept of annuity and the importance of the emphasis on survival benefits in retirement planning," said Koh.
"To this end, our fully guaranteed plan will help accelerate the educational process as there is no variable or uncertainty that will complicate the public acceptance," he added.
Great Eastern assured its policyholders that their retirement income will not be affected, regardless of market conditions at the time of their retirement.
The total guaranteed benefits are dependent on the age at entry and the period of accumulation, Koh said.
"As a simple example, a 35-year-old employee who contributes RM3,000 for 10 years is fully guaranteed to enjoy a total benefit of RM65,475 after the retirement age of 55, paid in equal annual income over 15 years. That is more than double the total capital outlay of RM30,000."
"Additionally, if your tax bracket is in the 19 per cent range, one can enjoy an annual tax savings of RM570 for the next 10 years which total up to RM5,700. Of course, the higher is your tax bracket, the higher is your savings," Koh further elaborated.
It is learnt that Great Eastern managed to secure a limited tranche of asset to support the guarantee and therefore the plan is only available for a limited period and on a first come first serve basis.
"Future availability is dependable on whether we can secure the necessary assets to back up the guarantee," Koh said.
Director and chief executive officer Datuk Koh Yaw Hui said the Great Retirement Plan launched last Friday is intended to help policyholders supplement their retirement funds.
"Most people do not have sufficient funds at retirement but one should enjoy their golden years, spend quality time with their loved ones and live their dreams after working hard for all their life," he said.
Great Retirement Plan is designed to meet the required criteria of a deferred annuity plan, to qualify for the new tax relief of RM3,000 announced in the 2012 Budget.
The insurer said the launch is timely as it allows the tax-paying public to immediately enjoy the tax relief before the close of the year 2012.
Annuity products are fairly new in the Malaysian market unlike the more readily available life insurance products.
While the life insurance products have core benefits focussed on death benefits, annuity products are the complete opposite, with its benefits focusing purely on survival benefits.
"We are looking to launch more variations of annuity products, in support of Bank Negara Malaysia's Financial Sector Blueprint, to promote the pension market as the third pillar of retirement funding," Koh said.
The insurer's first product was designed to be fully guaranteed in view of the novelty of annuity product in Malaysia.
"We believe a lot of educational awareness will be required to help the general public understand the concept of annuity and the importance of the emphasis on survival benefits in retirement planning," said Koh.
"To this end, our fully guaranteed plan will help accelerate the educational process as there is no variable or uncertainty that will complicate the public acceptance," he added.
Great Eastern assured its policyholders that their retirement income will not be affected, regardless of market conditions at the time of their retirement.
The total guaranteed benefits are dependent on the age at entry and the period of accumulation, Koh said.
"As a simple example, a 35-year-old employee who contributes RM3,000 for 10 years is fully guaranteed to enjoy a total benefit of RM65,475 after the retirement age of 55, paid in equal annual income over 15 years. That is more than double the total capital outlay of RM30,000."
"Additionally, if your tax bracket is in the 19 per cent range, one can enjoy an annual tax savings of RM570 for the next 10 years which total up to RM5,700. Of course, the higher is your tax bracket, the higher is your savings," Koh further elaborated.
It is learnt that Great Eastern managed to secure a limited tranche of asset to support the guarantee and therefore the plan is only available for a limited period and on a first come first serve basis.
"Future availability is dependable on whether we can secure the necessary assets to back up the guarantee," Koh said.
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Read more: Great Eastern rolls out the Great Retirement Plan http://www.btimes.com.my/Current_News/BTIMES/articles/g8eastern/Article/#ixzz2HmSoNjJK
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