- 7 months ago
As societies age and economic landscapes shift, organisations – both public and private – are increasingly called upon to play a pivotal role in ensuring income security and long-term wellbeing. From social protection systems to workplace benefits and inclusive economic policies, these institutions are key drivers in building a resilient future for all.
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00:00All right, welcome back to Niagawani. My name is Nabila Khalida, taking over from my colleague earlier, Haris Ashraf Aslan.
00:06And we're still broadcasting live here at Shangri-La Hotel Kuala Lumpur for International Social Well-Being 2025.
00:14And we're the official media partner where we gather here with industry experts, policy makers and global leaders
00:22where we want to explore on how we can navigate to actually unlock new opportunities in this longevity economy.
00:29And as the world and also society's age and we see economic and landscape shifts,
00:35organizations, both public and also private, are called upon to actually play a pivotal role
00:41in ensuring income security and also long-term well-being.
00:46And from social protection system to actually workplace benefits, we want to have inclusive economic policies as well.
00:53These institutions are key drivers in building a resilient future for all.
00:57And for this, right now, we have the right authorities lined up for this 30-minute session to actually discuss further.
01:04On this, we want to welcome you and also introduce you.
01:08On my right is Hani Kablawi, the senior executive vice president and also the head of International BNY.
01:14Good morning. Thank you for joining us this morning here in Shangri-La. How are you?
01:17Nabila, thank you very much for having me. I'm great.
01:20Amazing.
01:21Great to be back in Malaysia as well.
01:22Amazing. Thank you so much.
01:24And as we know that the theme for this year, ISWC, is Living to 100, Are We Prepared?
01:30It's actually a thought-provoking theme.
01:32And as you know that from a global custodian, yourselves, and also investment services perspective,
01:39how do you see or how does BNY view the implications of this longer life expectancy that we're seeing right now?
01:46Yeah, look, I think it's a great question to be asking. It's very timely.
01:51I think just listening to the opening speech from Zulkarnain, the life expectancy here in Malaysia has gone from mid-50s to mid-70s over the past few decades
02:08and expected to go up by an average of one year for every four years.
02:15So that's, first of all, a recognition of advancement in society, in health care, made great strides really by the country and the health care system.
02:32So that's great news.
02:33Now, along with that comes a responsibility on behalf of the pension funds and the government,
02:42but also the supply chain of providers, investment managers, investment operations custodians and others
02:54to make sure that we are ready for the increase in life expectancy.
02:58And I do think that the industry as a whole, globally speaking, not just here for Malaysia, is readying itself for that eventuality.
03:10It is a fact of life everywhere, not just here in Malaysia.
03:13And to me, it's all about, it's two things.
03:16One is, are the assets that the pension funds are managing kept safe?
03:23Are they going to be there whenever you need them?
03:28Is the data safe, kept safe?
03:31Is it going to be there whenever you need it?
03:34And are you able to achieve a growth in those assets over time that acknowledges and accommodates the increase in life expectancy?
03:44Those are really the three things that we can really focus on here in this conversation.
03:49But seeing that the population is aging worldwide and Malaysia is expecting to reach the aging nation by 2030,
03:56how is MENWAI helping clients, especially when it comes to including sovereign and retirement funds, pension funds,
04:04managing long-term sustainability of retirement, also social protection itself?
04:08Yeah, so maybe we focus on the safety of the assets and the safety of the funds first.
04:18We've seen in the past that if the technology or the operations are not very robust, that assets or data can be lost.
04:30So the first thing, foundational in this business, is to make sure that the assets are kept safe,
04:37they're kept segregated, they're kept in locations and in places and on systems and platforms and technologies that are robust and resilient.
04:49I'll give you a couple of examples, cyber security in a world of increased risk from a cyber attack perspective,
05:03or even increased complexity from a technology perspective that could result in the loss of data or loss of assets unintentionally.
05:12So on the one hand, you've got cyber attacks that are intentional and disruptive,
05:17but disruption can come also from complacency, from a lack of investment in the foundations of a business,
05:24in the data infrastructure, in the data flows that are coming in and how they're processed and how they're provided back to clients.
05:32It could result, complacency could result in data losses as well.
05:35So investing in the foundations of a business, in the technology and the operations, is of supreme importance in this business,
05:45and it is something that we at BNY are very focused on.
05:49We've pretty much covered on how the importance of the SIF or the data assets you mentioned earlier when it comes to social well-being,
06:00but it's unfortunate that we don't have much time with you together.
06:04But last question I have for you in one sentence.
06:07Honey, what's the most important mindset or action Malaysians should actually adopt if we are to actually truly prepare for living to 100?
06:15It's a long process there. It's a long years to go.
06:18So what's your suggestion for that?
06:20I'd say a couple of things. I mean, we mentioned asset safety and data safety.
06:23The other thing that one really needs to think about is will the assets grow over time to accommodate the increase in life expectancy?
06:32And I have to say that equities and fixed income together are oftentimes highly correlated in their return profiles.
06:43So you need to bring in private assets that are less correlated with those public securities.
06:50And private assets, the good news is private assets have an uncorrelated return profile and grow faster over time.
06:58They're also illiquid, so it plays to the longevity story if coupled with the public securities, the more liquid securities in a thoughtful way.
07:11And importantly, those private securities underlying them are long-term productive finance type assets like infrastructure assets.
07:21So if one can align the return profile that is required for life expectancy with the investment in infrastructure that is needed to support good infrastructure, roads, trains, public transport, electricity grids, new renewable energy,
07:45those are very good and very aligned goals.
07:48And I think it is a worthy goal for any pension fund.
07:55All right, Hani, we don't have much time. I'm so sorry.
07:57But thank you so much for joining me this morning.
08:00Hani is a senior executive vice president and head of international BNY.
08:03And we'll continue with our next guest where we know that Mr. Hani has deep experience working with the horizon investors globally.
08:13And so we want to make sure as well some of the emerging strategies or innovations that can actually help stations like, for example,
08:21EPF and ensuring income into QC for Malaysians well into their later years.
08:26And we have another two guests coming for this session, for this 30-minute session.
08:33And earlier, Mr. Hani has mentioned about asset safety, both private and government sectors,
08:39where we want to make sure the safety is well reserved by cybersecurity as well.
08:46So that was mentioned by Mr. Hani earlier.
08:48But for BNY, as a partner in global financial infrastructure, they have contributed a lot to strengthening trust, transparency,
08:57also resilience in retirement savings system, especially when it comes to emerging markets like Malaysia.
09:03And as I mentioned earlier, Malaysia is reaching a generation in 2030.
09:08And we hope to actually empower the theme that was introduced by EPF for this year, ISWC,
09:17which is a living to a hundred, are we prepared?
09:21And we have a lot more discussion, two more discussions.
09:24But right now, without further ado, I want to introduce my next guest, my second guest,
09:28which is Munirah Khairuddin, the chief executive officer of principal asset management, Berhad.
09:34Good morning. How are you, Munirah?
09:35I'm well. Thank you for having me.
09:36Thank you for joining me.
09:37So I'm going to start with my first question straight away from principal's point of view.
09:43What does preparation for longevity look like to you,
09:46especially when it comes to financial terms in Malaysia especially?
09:49And are we actually anywhere near ready and where we need to be right now?
09:55Okay, perhaps if I can share a few statistics.
09:58So according to World Bank, one needs 70% of income replacement ratio.
10:03So at the age when you're retired, you need to have, for example, $10,000.
10:09And the recommended is you need to have $7,000 of that $10,000.
10:12Malaysia today stands at only 30% income replacement ratio.
10:17Second fact, according to Kazana Research Institute,
10:21that 90% of Malaysians below the age of 30 and below will not be able to retire at a minimum of $240,000
10:31when they're at the age of their retirement.
10:34So if you don't have RM35,000 by the age of 30 in your EPF,
10:38you're highly likely not going to reach your $240,000 minimum income.
10:45So the statistics are quite staggering.
10:48And only 45% of Malaysians today have insurance policy or takaful.
10:53So what that means is it's a fiscal burden.
10:56It's a fiscal burden to the government.
10:59And basically the future generation will also not be able to retire.
11:04So I'm one of the generation that we're discussing right now.
11:11And it's very, very, honestly.
11:12And this is due to because many Malaysians still face gaps in financial literacy
11:16and also retirement planning.
11:18So in your opinion, Monira, how is Principal working to actually close these gaps,
11:22especially for the undeserved communities and also younger demographics,
11:28also perhaps the vulnerable groups as well?
11:30So, you know, one of the global efforts that Principal embarked upon,
11:36so we're a global asset management house,
11:38and I think what sets us apart is we've been in a retirement business for 145 years.
11:44So we launched this index called Principal Global Financial Index.
11:47Malaysia ranked 20th out of 41 countries globally.
11:51And the percentage point that actually Malaysia is strong at is digitization.
11:54So one of the things that Principal embarked upon is to try to reach as many people,
12:01Malaysians, through digital.
12:03So today if you go to TNGD, you'll be able to find some really global innovative solutions in our pension.
12:10And that's one of the methods that we're trying to reach out to as many.
12:15As well as if you do a bit of research and you look around,
12:18you know, there are many financial advisors in the market.
12:20Most banks also carry financial, you know, products.
12:25It's just that the effort needs to be taken.
12:28So I think digital is a good way, and we're there.
12:32And Principal has been long involved in retirement schemes,
12:37like private retirement schemes, whereas...
12:39So how do you see this evolving to meet the needs of gig workers
12:42and those outside formal sectors?
12:45Yeah, so the gig economy is a big one for Malaysia,
12:49and a lot more youngsters are there.
12:51So I mentioned that we have, you know, we reached out to our digital wallet, right,
12:57through TNGD, and our statistics show actually the highest amount of contributor
13:02are people from the age of 30 to 39, okay?
13:06And actually two times more than most age groups,
13:09and they're investing in equities.
13:12So there is a glimmer of hope, right, that, you know,
13:15these youngsters will be able to continue with these good financial habits.
13:19So PRS, Private Retirement Scheme, is one of it that can complement
13:24the mandatory pension which EPF provides,
13:27which we talked about earlier that it's insufficient.
13:30But there is this age group where they deserve, I mean,
13:35they prefer to be passive savers.
13:37And also when it comes to active planners,
13:40how does Principal see in helping them and also investors as well,
13:44especially in the face of longer retirements and also rising living costs right now?
13:49I think the three main things that people need to remember, right,
13:53when you say passive savers,
13:54if you have a lot of money in your current account,
13:56which earns you nothing actually,
13:58you are threatened by inflation, right?
14:03So inflation will erode your savings.
14:06You know, gone are those days where you can put money bawah bantal, right?
14:08And as they say it, right, inflation will kill it.
14:11And inflation, as you know, has gone higher.
14:13Second is, to your point earlier, right, that there's longevity.
14:16We know average age will live up to 76 years old, right?
14:20And how are you going to fund that retirement?
14:23And thirdly, you know, the financial markets are also not easy to navigate.
14:27So you need to look for solutions such as PRS,
14:31such as some very easy products out there to just...
14:34And the key trick to this is consistency, right?
14:38Don't put aside your savings after you've minors your expenses.
14:43Put aside your savings at source of your income.
14:46Just like when you have your EPF, it's taken at source, right, of your payroll.
14:51So put aside that at source, not after you've minors all of your expenses.
14:58We have about three minutes left, unfortunately.
15:02So if you could have a powerful piece of advice that you could give to someone like my age
15:08that's watching right now, around 30s, 40s,
15:10what would you say to them that's still wondering
15:12whether they're doing enough for their pension funds?
15:15Yeah, so we're moving into an age of personal financial responsibility.
15:20There are so many of our young Malaysians who are clever, literate.
15:26It is an era of personal financial responsibility.
15:29So you need to do the research, you need to invest.
15:31It's not about savings, it's about invest
15:33because of all those factors that I mentioned earlier.
15:36And you have hope, you just need to look out there, study a little,
15:41and start investing and not just saving.
15:44So financial literacy is very important, right?
15:46Yes.
15:46All right, thank you so much, Monira Khairuddin, for your time also,
15:50for your insights.
15:51The Chief Executive Officer, Principal Asset Management Berhad right now.
15:56And we have one more guest after this,
15:57but what Monira has mentioned earlier,
16:00especially when it comes to the agencies of the younger generations,
16:04don't forget to advise, put aside some of your incomes for your pension funds,
16:10and that's very important when it comes to having a very well-being,
16:15social well-being in the future.
16:17And that meets the requirement, also the theme for this year's ISWC 2025,
16:23leaving to 800.
16:25But the real question now is, are we prepared?
16:28And that's why we here, Awani is here, to actually discuss further on this.
16:32And after this, we have the right authority as well,
16:37where we will have the managing director, Nomura Asset Management, Malaysia Berhad.
16:42We have Leslie Yap on my right.
16:44Are you ready?
16:45Yes.
16:45All right, amazing.
16:46Thank you so much for joining me this morning.
16:48I've discussed with two guests earlier, discussing on different topics.
16:53But for your session, I want to ask on your perspective,
16:57how, in your opinion, how does longevity reshape the way individuals,
17:01governments and also markets plan for the future?
17:04Okay.
17:05Firstly, thanks for having me.
17:06Glad to be part of this session and to be able to share some of our thoughts and views.
17:11I think if you want to talk about this topic,
17:13and you're going to cover three areas, right?
17:15You talked about individual, government and markets.
17:17I think we're going to need more than 10 minutes.
17:20But anyway, I'll just give a few key points that I think we need to consider
17:24when we talk about, you know, reshaping and to deal with this living to 100 years.
17:29I think individually, people just need to be able to, number one,
17:33know and acknowledge that this is a challenge.
17:37People need to rethink how they're going to retire,
17:41how they're going to deal with health care,
17:43with a healthier life and a longer life,
17:45and how they're going to deal with their finances.
17:47when they retire.
17:48I think that's very key.
17:50So I'm going to keep it short.
17:51That's from an individual perspective.
17:54From a government perspective,
17:55I think the government has already acknowledged that this is a challenge,
17:58as we can see from all the studies and researches done
18:01by various institutions, including EPF.
18:04So they are organising and trying to encourage various pension schemes
18:09to deal with this challenge that's upcoming,
18:12or in fact, I would say present.
18:15And also the challenge of dealing with the older labour force.
18:18I think the government needs to rethink how to keep the older people in the labour force,
18:25but at the same time balancing it to allow the young generation to step up.
18:30So I think we need to manage the whole issue with ageism,
18:34but people who are older or who are retired, they are still valuable.
18:38They need to be able to be part of the workforce to solve problems,
18:41but at the same time guide the younger generation.
18:44So that's maybe from a government perspective.
18:47And then on the labour side as well, right,
18:49because the older population, the less workforce,
18:52the government needs to realise that there's going to be an economic impact.
18:55So, like I said, there's a lot of things to think about,
18:58but these are some of the front and centre issues.
19:01I haven't even gone into healthcare, but I'm sure you can save that separately.
19:06And on the markets where we operated,
19:08we have to be able to provide the right education, information, guidance,
19:14as well as products, solutions to help people to plan for a longer life,
19:21for a longer retirement.
19:23What sort of strategies, what are the products that meet their future liabilities?
19:27I think that's very key.
19:29So just to have people aware, acknowledge, and to start doing something about it.
19:34I think that's very important.
19:35So knowledge is the first one.
19:36Literacy, knowledge is literacy.
19:39But when it comes to life expectancy,
19:41we can see the increasing of life expectancy
19:43and also a shift in economic realities, especially in Asia.
19:48In European, what are some of the structural risks that Nomura is observing right now?
19:53And what can countries like Malaysia do to actually stay ahead of all these challenges?
19:58In terms of the structural risks, I think people do realise,
20:03number one, with the ageing society, you need to have the right healthcare services.
20:07You need to be able to provide for these healthcare services.
20:10Obviously, we see that in Japan, where Nomura is headquartered,
20:14with almost 30% of the population above 65,
20:18they are constantly dealing with a larger and larger population demanding more and more healthcare.
20:24So we're not just talking about healthcare in terms of treating disease or sickness.
20:30We're also talking about plans to be able to offer preventive healthcare.
20:34How do you reduce future problems by adopting preventive healthcare?
20:40So I think healthcare itself is going to be a major, major challenge for any country,
20:45not just Malaysia.
20:47So I was looking at some data, and by 2040, 15 years from today,
20:53we are looking at doubling the number of people who are above 65 in Malaysia.
20:58So imagine whatever facilities you have today, you need double of that.
21:03I mean, in a very simple way, double that to be able to meet the needs.
21:07So healthcare, I mentioned earlier on about labour.
21:11So imagine an ageing society.
21:14We need to be able to take care of our parents, grandparents.
21:18And what does that mean for the workforce?
21:20We know that to have the right workforce, we need to support the economic growth.
21:25Without a strong and large workforce, we can't support the growth.
21:29And then I think people don't realise is when you have a couple working,
21:34supporting two sets of parents who continue to live and remain healthy,
21:38plus your kids, that's going to be a big burden on existing family generation.
21:46And there are people who decide to opt out of the workforce
21:49to take care for their ageing parents.
21:51That itself is going to create a spiral.
21:54First, we have people retiring.
21:56Next, we have people taking themselves out of the workforce to take care of these people.
22:01And we have a smaller pool or younger population coming up.
22:05So I think labour is going to be a challenge.
22:08So we have to be able to be prepared for that.
22:11How do we deal with that?
22:12So labour and also health care will be the most top two challenges.
22:17Yes, that's the obvious ones.
22:18Obvious ones.
22:19But before we wrap up, unfortunately, we only have about two minutes left.
22:24If there's one shift that you believe must happen today to actually ensure
22:27Malaysians are truly prepared to live to 100,
22:31what would you say to them and what would it be?
22:33I think that's very simple.
22:35I think when you are faced with a challenge or an objective,
22:38it's all about the mind, right?
22:40So I said, you know, mindset shift.
22:43What do I mean by that?
22:45If you have an ageing population,
22:47I think people just need to realise that, you know,
22:50it's okay to age.
22:51There's nothing wrong with that.
22:52You just need to stay young, right?
22:54At heart.
22:55Make sure you're healthy physically.
22:57And I think people need to be able to change the mindset.
23:00Maybe it's a generational thing.
23:02I do see that shifting.
23:04And also maybe partly in Asian culture where,
23:07oh, retirement equals maybe I stay at home and do nothing and enjoy life.
23:13But people need to change that and say that retirement, yes,
23:16I need to spend a bit more time to do what I like.
23:19But it doesn't mean you stop working.
23:21You need to continue to have an objective,
23:23something to do, something to achieve in life
23:26so people can continue to work.
23:28And we probably have, you know, a higher retirement age.
23:33That will help the workforce.
23:34That will help people to save more from, you know,
23:37later on when they live to 80, 90, or 100.
23:40So I think that mindset shift is very important.
23:43And if I can just slip in one more, sorry, education.
23:46People need to be educated.
23:48And I'm not sure my kids are already in college preparing for university.
23:53You know, financial planning for retirement should be included in our school curriculum.
23:58Start super early.
23:59Start early, right?
24:00Maybe not primary too soon.
24:02You know, secondary school where they start to know,
24:05you know, about what's going on in the world, the things, money.
24:08I think those are very important.
24:10So they're very well aware at the very young age.
24:13Thank you so much, Leslie Yap,
24:14the Managing Director,
24:16and what was mentioned by Leslie earlier,
24:21we have to shift our mindset align
24:24or that aligns with the economic policies as well
24:26and as reaching the aging nation in 2030.
24:29Thank you so much again for joining me this morning.
24:32And as we know, aging is no longer just about adding years to life.
24:36It's about making those years meaningful
24:38and also vibrant and secure.
24:40But the big question again,
24:41as we live longer, how will we afford retirement?
24:46And as a younger generation myself,
24:49knowledge is very important.
24:50Equip yourself with the right knowledge
24:52to actually be prepared to live very comfortably
24:56and also sustainably in the future
24:58when actually reach the pension age.
25:01So we're still here at the Shangri-La Hotel, Kuala Lumpur
25:05and wrapping up for today's session.
25:07But we have another session,
25:09a discussion after the break with Ibrahim Sani.
25:12So we'll go for a short break.
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