PRS was launched as a long term investment as the government is worried about the majority of retirees who increasingly have very little in their EPF & funds for retirement. Does it make sense to invest in a PRS?
Updated: Sep 26, 2022
What is PRS?
PRS is short for Private Retirement Schemes launched in 2012 as a voluntary long-term investment scheme designed to help individuals accumulate savings for retirement.
PRS Youth Incentive
In 2014, the government will contribute RM500 into the PRS accounts of youths, who have accumulated RM1,000 within a year.
In 2017, the incentive has been increased to RM1,000 for those who contribute at least RM1,000 in a single PRS fund from 2017-2018.
The incentive is paid into a specific PRS-GOV sub-account A.
Applicable only for Malaysian youth aged between 20-30 years old (based on birth date as long as you haven’t turned 31) with min RM1000 contribution to approved PRS.
The youth incentive is applicable once only anytime from 2014-2018.
This means that if you have received the RM500 PRS incentive previously, you will not be eligible for the new improved RM1,000 youth incentive. :(
More info on PRS Youth Incentive
RM3000 Tax Relief
As long as you pay individual taxes, there is a tax relief of up to RM3,000 a year for investing in a PRS.
Currently approved for 10 years from 2012 – 2021.
Withdrawals
As it is a retirement scheme, restrictions are put into place for withdrawal.
You can only withdraw under the following circumstances.
- After the day the member reaches the retirement age, withdrawals may be made in part or in full;
- Following the death of a member, only full withdrawals may be made;
- Prior to the member reaching the retirement age, withdrawals from sub-account B may be made in part or in full;
- Permanent departure of a member from Malaysia, only full withdrawals may be made.
- Sub-AC A: 70% (only withdrawal upon retirement)
- Sub-AC B: 30% (withdrawal with 8% tax max 1x p.a. if before retirement age)
Investing in PRS
There are a number of PRS providers available and you can purchase at a lower cost through a discounted brokerage.
Funds are divided (by government directive) to conservative, moderate & growth – with supposedly conservative being the lowest risk & growth the highest risk.
Sales charges depends on the provider selling (as low as 0% sales charge). There are however annual management charges (~1-1.5%) & trustee fees (~0.01-0.05%) which are hidden as directly factored into the pricing.
Should I invest in PRS?
If you qualify for the youth incentive, incentive investing is a great idea as technically you would be getting RM1,000 (100%) on a RM1000 investment. Additional due to compounding, this would net you an final 30-50% higher returns compared to without the incentive.
However, if you do not qualify for the PRS youth incentive, you may want to look around for other investment alternatives as if your funds are going to be tied up, you should be getting superior and/or guaranteed returns (which is not the case with PRS).
The RM3,000 tax relief is good to have if you are at a high tax bracket although you do not actually realise the entire tax savings at the highest tax rate as our taxation system is on a tiered progressive rate.
Application Process
1. Open an account with PPA
2. Open an account with the specific company offering the PRS
More Info
- Private Pension Administrators (PPA)
- PRS Funds Performance (Morningstar)
- Approved PRS Providers:
- Insurance providers that provide annuities also qualify for the PRS/annuity tax relief category.
Which PRS should I invest in?
Read the following articles on returns:
- Which PRS Funds to Invest in 2020/2021?
- Which PRS Funds to Invest in 2019/2020?
- Which PRS Funds to Invest in 2018/2019?
- Which PRS Funds to Invest in 2018?
- Which PRS Funds to Invest in 2017 2H?
- Which PRS Funds to Invest in 2017?
- Which PRS Fund to Invest in 2016?
FAQ
Q: Can I switch an existing PRS to a different PRS provider?
Yes you can switch between from one PRS provider to another.
- Transferee Provider Fee: RM0
- Transferor Provider Fee: RM25-75
- PPA Fee: RM25
- Minimum Transfer: RM100
- Minimum 1 year after subscription start date
- 1 transfer once a calendar year for each PRS Provider
Q: Can I switch an PRS fund within the same provider?
Yes. There is no transfer fee.
Q: I have read through the info in your web-page & on the PRS provider’s page. It does not mentioned the annual return. And it seems that it works similar with KWSP. Can you clarify on it?
A: A PRS is similar to EPF (KWSP) funds in that it is meant for retirement & the EPF investment is a form of unit trust.
However, EPF is a government/public fund while a PRS is private. PRS qualifies for the PRS youth incentive while EPF doesn’t.
Also you can withdraw PRS investments earlier (with a penalty) while for EPF you will in most cases need to reach age 55.
Q: How can I check my PRS account balances?
A: You can check your account balances including incentives via your PRS provider or via the PPA PRS member website.
Q: When is the Youth Incentive given?
A: Payment will be made on a bi-annual basis and PPA will notify the members once the incentive payout is made into the members’ qualified PRS Fund.
I have invested RM 3000 from Aug 2015 to Dec 2015. I’m 29 yrs old back in year 2015.
Would like to clarify as when the RM 500 incentive will be credited into my PPA account?
Thank you.
how do we register a PPA account?
Hi, Thank you for your reply.
so if i would like to invest through fsm, do I just register the account with them? Or i need to open an account elsewhere before invest with them.
Any guide to register PPA account?
Thank you.
I am 34, is the Maybank PRS will entitle me to have the RM3k tax relief as well? Just to know if Maybank PRS is approved.
List of PRS providers
I am currently 30, but will be 31 this year in September 17. Do I still eligible for the incentive now as at January 17?
Hello, how do i register for this PRS & at what bank it usually use?
PRS Providers
I have subscribed PRS since 2014 and i have received the RM500 youth incentive.
Every year i am investing RM 3000 into PRS, and this year i am 29 YO.
Would like to ask am i still qualify for the RM1000 youth incentive which was announced in 2017 Budget? given that i have received the RM500 incentive. Thanks.
HI, Isn’t invest RM 1000.00 before 30 years old then the government give RM 1000 incentive?
Any interest pay for me like EPF?
hi, it is means to invest Rm1000 in 2017 to get Rm1000 incentive, or invest Rm1000 in 2017 and another Rm1000 in 2018 in order to get the Rm1000 incentive?
If we invest rm1000 but split to two fund, is it entitled to rm1000 incentives?
Happy Investing!
Hello,
May i know how can we get back the RM1000 incentive?
Thanks
Hi there,
Assuming I’m eligible for PRS Youth Incentive
Few questions:
1. Can I invest PRS in more than one provider at the same time? Let’s say RM1k investment in AIA and RM1k investment in CIMB. Total investment RM2k but different providers.
2. If it is possible to invest PRS in more than one provider, how much is the total of PRS youth incentive? RM1k or RM2k?
Thanks for answering. :-)
Since there is a sales charge, if I invest RM1,000 into a PRS, after sales charge, less than RM1,000 goes into the PRS. e.g. if sales charge is 1%, then only RM990 goes into the PRS.
So, will I still get the incentive?
Thank you.
Hi – I am an expat working in Malaysia for long term basis. Am I eligible to invest in PRS?
Great Eastern’s PRS is eligible to have the subsidy of RM1,000(PRS Youth Incentive) entitlement?
Hi, would like to know can I invest 3000 for this year and only 1000 for next year? Is it have to contribute same amount in every year ? Will i entitle the 1000 incentive?
hi, I’m Kavi. I’m 34 now. If I open up a PRS account now , am I eligible for tax relieve for year 2017.
Since, the PRS is like unit trust invetstment. If i invest in Public mutual and the return of of unit are not good, can i sell the unit and reinvest on the unit a doing good?
How it works. For PRS have any sperate investment units?
Hi, if im investing in prs through public mutual.. eill there be sales charge for every transaction i do? Is it the same if i invest in prs thorugh any provider? It meand the whole amount im investing will not be invested?
So epf is better than prs?
Also, still qualify for the incentives of rm 1000?
Hi,
Is this tax relief is part of EPF/life insurance tax relief? Thanks
Eng
I just create an account opening at affin 18 Dec, how long is the procedure? am I entitle for tax relief 2017?
to enjoy the tax relief of 3k, i would need to invest 3k every year?
Hi, I had registered PRS in AIA yesterday. I would like to know that :-
1. there is a one time incentive – RM1000?
2. If i want to enjoy the 3k tax relieft, i should invest a RM3k every year into PRS ?
3. How much for the interest pay or no?
4. Any issue occur if i have no invest into PRS every year?
Thank you
For question no. 3,i think he meant if there is like a dividen return rate like EPF
https://mypf.my/contact/
Hi, I’ve been trying PRS since 2014 with 2 providers and 3 funds but seems like all the performance are poor. In fact, worse than bank’s FD. What puzzled me is, the funds are managed by professionals, with long term tenure, How could it be that bad? Does it just happens to me Or is there any PRS fund that could consistently have better return than FD?
https://mypf.my/2018/02/21/which-prs-funds-to-invest-in-2018/
Thanks for the guides. I had a quick look and noticed that AIA PAM Moderated was rated 5.0. I had invested in this fund since 2016 but as mentioned, the nett return up to date is still much lower than bank’s FD.
Hi. I’m 55 years old and would like to buy PRS funds. Would it be possible? Can I enjoy the tax relief of RM 3000?
1. this year 2018, i am 28 y/o. if i invest 3k, i got tax relief 3k. but the incentive still 1k only right?
2. now ady June, bi-annual incentive payment still available for now? or i only entitled for 2nd half payment?
3. youth incentive entitled until Dec 2018, tax relief up to max 3k every year (any age) until Dec 2021, right?
May i know PRS youth incentive only until 31 Dec 2018 ? or it will continue for 2019? As i cant see it on 2019 budget.
Hi can I know roughly how much is the total withdrawal I will get at the age of 55 upon full withdrawal if I have invested Rm1k into PRS plus the Rm1k incentive?
HELLO PRS
I had bought rm1000 PRS back in december last year. Currently age 30. But I have not received the RM1000 incentives yet until today. Is it normal?
I am 39 next year- would you suggest me investing in a PRS?
Hi i want to ask, if this year in January i invested RM 3k in PRS. However in Oct i have withdraw RM1500 due to covid relief, in my next year tax relief income tax form filing, i should write in RM3K for tax relief or RM1500 (net amount) for tax relief? Thanks.
Hi Folks, the mention tax relief is from year 2012 – 2021. What does that means? does it mean after the year 2021 the 3k tax deduction is not longer available?
In the latest budget 2021 announcement, the Government of Malaysia have approved the PRS RM3000 tax relief which will be exempted until 2025. It actually does not matter which fund you contribute to get tax relief. it is restricted to RM3000 and the choosing of funds to invest in really depends on your choosing and the return that goes along in it.
Hi, how much is the investment / top up annually in order to be entitled to max tax relief for YA2020?
Sorry if the same answer has been provided in the earlier thread.
If I contribute to a PRS fund using my EPF savings (through i-Invest), am I eligible for the RM3,000 tax relief ?
Or must I invest through PPA account only can get the tax relief ?
Thanks for your clarification. Also I would like to ask – is it advisable to contribute to, for example, 3 different funds at the same time, with the investment portfolio as followed?
PRS Provider A – Growth Core Fund (default, under 45 of age)
+
PRS Provider B – Islamic Balance Fund (self select)
+
PRS Provider C – Higher Return Fund (self select)
p/s : I am turning 39 years old this year.
Hi again,
One more question – tax relief RM3,000 is not limited to only one PRS fund, right? We can total up the total investment contributed to 2~3 funds to file the tax exemption, right
Scenario : I invested RM1,500 in Provider A + another RM1,500 in Provider B = RM3,000 total claimable in the tax relief.
Please confirm if my understanding of the above scenario is correct. Thanks again!
If i choose to use Deferred Annuity, what type of insurance / takaful plan i need to sign up?
I am currently 30 yo entering 31 yo this year in August, and I am totally new on this PRS and plan to sign up. May I know currently is there any promotion / incentive offered by PRS (other than 3K tax relief)?
Is there any special category of PRS account ( like PRS youth) that I shall register or all of them are just same ?