PRS FAQs

Applying for PRS

What are the application requirements and supporting documents?

Anyone whom is 18 years old and above is eligible to contribute to the PRS. You will need proof of identification: Identification card/ Police/ Armed Force ID (for Malaysians) or Passport (Foreigners). To learn more about the PRS scheme features, its regulatory framework, benefits and structure, please refer to the PRS and You section.

What should I consider when choosing a PRS?

When making your PRS contribution, you need to take into account various factors such as your age, personal and household income, risk tolerance, retirement objectives as well as the suitability of the different funds under the various schemes to meet your retirement needs.

Where can I obtain information about the funds available? How would I know which option would suit me best?

You can decide to choose a PRS fund or not to choose a PRS fund and invest based on the default option where contributions are allocated to the core PRS funds based on your age. For further details on fund options, please refer to Structure of PRS page. Meanwhile for the list of available funds and PRS Providers, please refer to the PRS Providers & Schemes section.

If I am an undischarged bankrupt, can I open an account with a PRS Provider?

An undischarged bankrupt is not prevented from participating in a private retirement scheme by opening an account. However, as an undischarged bankrupt, you have a legal duty to inform the DGI of all your assets or properties which include your investments in PRS as provided under section 24 of Bankruptcy Act 1967.

Contributions (Individuals)

Is there any minimum contribution for PRS?

The minimum contribution varies from Provider to Provider. To find out more on the minimum contribution amount for each respective PRS Provider, please go to the PRS Providers & Schemes section.

What are the contribution types?

Any individual who has attained the age of 18 years as of the date of the account opening of a private pension account may make a contribution to any fund under the PRS. The PRS is offered to Malaysians and non-Malaysians as well. For details on the contribution types, please refer to About PRS Funds page.

Can my spouse/ parent/ partner contribute to the PRS on my behalf?

Yes, they can. However, contribution to the PRS must be done under their own PPA account.

Do I need to contribute on a monthly basis to the PRS?

Being a voluntary scheme, there are no fixed amounts or fixed intervals for making contributions. Individuals can contribute to the PRS as often as they like and are encouraged to to make regular monthly contributions to take advantage of “Dollar cost averaging” – a technique designed to reduce market risk through the systematic regular contributions at predetermined intervals (monthly) and set amounts to achieve their intended retirement goals. PRS members could make additional contributions to their respective PRS funds via PRS Online Top Up or through their selected PRS Provider(s).

When do I start contributing to my PRS account?

Contributions to your PRS account could be made at the same time or prior to opening your PRS account.

How do I make payment to my Provider?

First decide the amount, then either make payment to your respective PRS Providers through direct debit or online fund transfer. Additional contributions into your funds could be done through PRS Online Top Up, PPA’s online service for the convenience of all PRS Members. To find out more about PRS Online, go to PRS Online page.

Can I withdraw from my EPF to contribute to the PRS?

The PRS is a supplementary form of retirement savings in addition to the EPF and is voluntary in nature. Members are not permitted by law to withdraw from EPF to contribute to the PRS.

Where do I check my contribution details?

Contribution details may be obtained from your PPA online account.

Is the investment into PRS guaranteed by the government or does it have a minimum dividend policy?

PRS investments are not guaranteed and it does not have any statutory minimum dividend policy. You are advised to read and understand the Disclosure Document and Product Highlights Sheet to understand the risks involved before investing into a PRS.

What happens to the contributions in my PRS account if I am declared a bankrupt after having participated in the scheme?

As an undischarged bankrupt, you or your employer may continue to contribute to PRS. You will still enjoy rights accorded to PRS Members including the right to switch funds or request for transfer of any accrued benefits to another PRS Provider. You may also request for withdrawals according to the permitted circumstances as specified in the Guidelines of Private Retirement Schemes (“PRS Guidelines”). However, withdrawals from the account will be subjected to the oversight and conditions from the Director General of Insolvency (“DGI”).

Contributions (Employer)

If I am an employee of Company X and I am currently contributing to the PRS in my personal capacity. Should Company X also contribute to my PRS?

As PRS is a voluntary scheme, it is not mandatory for any employer, employee or individuals to contribute. Check with your Employer if they have an Employer sponsored program for the PRS. For further details please go to PRS for Employers page.

I am interested to contribute PRS for my employees. Who should I talk to?

You may approach any of the PRS Provider for further information or contact PPA at 1300-131-772. For a full list of the PRS Providers, please go to PRS Providers & Schemes page.

My company is contributing to PRS on behalf of my employee. What amount of tax relief is the company entitled to?

Employers contributing to PRS on behalf of their employees are eligible for a tax deduction on their contributions above the EPF statutory rate, up to 19% of the contribution. Please note that the employer tax relief is only applicable on the company as an entity.

Am I personally entitled to the 19% tax relief?

No, only employers contributing to PRS on behalf of their employees are eligible for the tax deduction.

What happens to the contributions in my PRS account if I am declared a bankrupt after having participated in the scheme?

As an undischarged bankrupt, you or your employer may continue to contribute to PRS. You will still enjoy rights accorded to PRS members including the right to switch funds or request for transfer of any accrued benefits to another PRS Provider. You may also request for withdrawals according to the permitted circumstances as specified in the Guidelines of Private Retirement Schemes (“PRS Guidelines”). However, withdrawals from the account will be subjected to the oversight and conditions from the Director General of Insolvency (“DGI”).

Switching & Transfer

First Year

Can a Member switch funds within the first year?

Switching between funds of the same Provider is allowed within the first year. For further details on Switching, please refer to the Other Important Information page under the Joining PRS section.

Frequency & Fees

How many times can a Member switch in one year? And what are the fees involved?

PRS Members are allowed to switch between funds in the scheme, subject to the terms and conditions as specified in the scheme’s disclosure document. As such, please refer to the Disclosure Document of your respective scheme for the number of switches allowed within a year as well as the fees involved.

Bankruptcy

What happens to the contributions in my PRS account if I am declared a bankrupt after having participated in the scheme? Am I still able to switch funds?

As an undischarged bankrupt, you or your employer may continue to contribute to PRS. You will still enjoy rights accorded to PRS members including the right to switch funds or request for transfer of any accrued benefits to another PRS Provider. You may also request for withdrawals according to the permitted circumstances as specified in the Guidelines of Private Retirement Schemes (“PRS Guidelines”). However, withdrawals from the account will be subjected to the oversight and conditions from the Director General of Insolvency (“DGI”).

First Year

Can a Member transfer Providers in the 1st year of subscribing to PRS?

Transfers can only be instructed between Providers after the first year of subscription to the PRS from the date of first contribution.

Frequency & Fees

How many times can a Member transfer in one year? And what are the fees involved?

A transfer request can only be conducted once per calendar year (there had been no prior transfer with the Transfer or Provider (releasing Provider) in that calendar year). Please refer to the PRS Providers page for the fees involved in relation to transfers.

Transfer Scenarios

Scenario 1

I made a contribution to Provider 1, Fund A on 2 January 2013. On 2 February 2014, I wish to transfer all my contributions from Fund A to Provider 2, Fund C. I did not conduct any transfers this year. Will my transfer request be approved?

Yes, your transfer request will be approved because:

1) You have contributed in Fund A for over one year;
2) This is your first transfer request from Provider 1;
3) You are transferring to a single fund.

Scenario 2

I invested in Provider 1’s Fund A on 2nd January 2013. On 14th February 2014, I would like to transfer all my holdings from Fund A to Provider 2’s Fund C and Provider 3’s Fund D. I have not made any other transfer for the year. Will my transfer be approved?

No, your transfer will not be approved as you are only allowed to transfer to 1 fund. For further details on Transfers, please refer to the Other Important Information page under the Joining PRS section.

Bankruptcy

What happens to the contributions in my PRS account if I am declared a bankrupt after having participated in the scheme? Am I still able to transfer funds between Providers?

As an undischarged bankrupt, you or your employer may continue to contribute to PRS. You will still enjoy rights accorded to PRS members including the right to switch funds or request for transfer of any accrued benefits to another PRS Provider. You may also request for withdrawals according to the permitted circumstances as specified in the Guidelines of Private Retirement Schemes (“PRS Guidelines”). However, withdrawals from the account will be subjected to the oversight and conditions from the Director General of Insolvency (“DGI”).

Withdrawals

First Year

When can I start requesting for a withdrawal?

Request for withdrawals may be made in the following circumstances and as follows:

  • After the day the member reaches the retirement age (or at any other age as the SC may specify from time to time), 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; or
  • Permanent departure of a member from Malaysia, only full withdrawals may be made.

To find out more on Withdrawals, please go to the Other Important Information page under the Joining PRS section.

Frequency & Fees

How many times can a Member withdraw in one year? And what are the fees involved?

Although lump sum withdrawals are permitted, members are encouraged to retain their savings for continuous investment under the respective Schemes. Please go to the PRS Providers page under the PRS Providers & Schemes section for the fees involved in relation to withdrawals.

Withdrawal from Sub-Account B

Which sub-account can I withdraw from?

Pre-retirement withdrawals may only occur from sub-account B.

Documentation

What documents are required for me to make a pre-retirement withdrawal?

Other than withdrawal due to death and permanent departure, no documents and reasons are required to make a pre-retirement withdrawal.

For details on withdrawals in respect of death and permanent departure, please go to the Other Important Information page under the Joining PRS section.

Permanent Departure

What documents are required for me to make a per-retirement withdrawal due to permanent departure?

For permanent departure (surrendering of Malaysian work permit or citizenship), the following documents need to be submitted to Providers:

  • Full Name, NRIC/ identification number and PPA account number; and • Letter of renounciation of Malaysian Citizenship (Form K/ Form Y); or
  • Letter to confirm surrender of identity card from the National Registration Department (NRD); or
  • Letter to confirm surrender of identity card from Malaysian Embassy/ High Commission of Malaysia/ Malaysian Consulate in foreign country

Death

What documents are required for withdrawal due to death?

The following documents are required for withdrawal due to death of Member (Prior authorization by the PPA)

  • A copy of deceased Member’s IC/passport showing clearly full name and identification number/passport number;
  • A copy of relevant document(s) showing PPA account number;
  • Original and a copy of Death Certificate (DC);
  • Original and a copy of Letter of Administration (LA)/ Probate;
  • A copy of executor’s/ administrator’s IC;
  • A copy of the Provider’s Withdrawal Form; and
  • A copy of executor’s/ administrator’s bank account (not the front cover).

A copy of the above listed supporting documents must be sent by the PRS Provider to PPA via post/ e-mailed as soon as reasonably possible for prior authorization by PPA.

Following the death of a PRS Member, where payment to the trustee, executor or administrator of the deceased PRS Member requires the prior authorization of the PPA, a PRS Provider must pay the trustee, executor or administrator of the deceased PRS Member the proceeds of the re-purchase of units within 10 days after the PPA’s authorization is received by the PRS Provider. If the deceased PRS Member has multiple PRS accounts, PPA will:

i. Alert other relevant PRS Providers on the status of the deceased PRS Member to enable PRS Providers to monitor for any unauthorised instructions from a third party to the PRS Providers; and

ii. Inform the executor or administrator of the estate of the deceased Member of other PRS accounts that may be held by the said deceased Member with different PRS Providers.

(Note: In the event of death, the PRS monies will return to the estate of the deceased member to be distributed in accordance to the instruction of the court).

If I do not want to contribute to the PRS anymore, can I withdraw all my money and close my PPA account?

You can stop contributing to the PRS at any time. However, you are only able to withdraw all your money upon retirement age. You can make pre-retirement withdrawal from your sub-account B subjected to 8% tax penalty.

I am a foreigner, and I cease to work in Malaysia before the age of 55? Can I withdraw all my funds?

You are entitled to a complete withdrawal from Sub-account A and B with no 8% tax penalty as this is considered a pre-retirement withdrawal due to permanent departure. For a list of documentation required to be submitted, please refer to the FAQ on Permanent Departure above.

I invested in Provider 1’s Fund A and Provider 2’s Fund B on 2nd January 2013. On 2nd February 2014, I would like to make pre-retirement withdrawal from Fund A and Fund B. I have not made any pre-retirement withdrawal for the year. Will my pre-retirement withdrawal be approved?

Yes, your pre-retirement withdrawal will be approved because:

1) you have invested in Provider 1’s Fund A and Provider 2’s Fund B for more than 1 year;

2) the withdrawals are made on the same day; and

3) you have not made any pre-retirement withdrawal for the year.

First Year

When can I start requesting for a withdrawal?

Request for withdrawals may be made in the following circumstances and as follows:

  • After the day the member reaches the retirement age (or at any other age as the SC may specify from time to time), 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; or
  • Permanent departure of a member from Malaysia, only full withdrawals may be made.

Frequency & Fees

Is there any limit on the number of times I can withdraw upon retirement?

No, there would not be any limit for retirement withdrawals.

If I initially invested in PPA and then stopped contributing, when do I withdraw my funds from PPA?

The funds would be able to be withdrawn upon retirement. Even if there are no repeat contributions, after the initial contribution, the PPA account is deemed active and withdrawals upon retirement can still be conducted.

Although lump sum withdrawals are permitted, members are encouraged to still continue maintaining regular contributions.

Minimum Retirement Age

As a member of a Private Retirement Schemes (PRS), when can I make full withdrawal from PRS?

Currently, members are eligible to make a full withdrawal from the PRS upon reaching the age of 55. However, the SC may specify any other age from time to time. Members would be informed if any changes are made to the current specified age.

Death

What documents are required for withdrawal due to death?

The following documents are required for withdrawal due to death of Member (Prior authorization by the PPA)

  • A copy of deceased Member’s IC/passport showing clearly full name and identification number/passport number;
  • A copy of relevant document(s) showing PPA account number;
  • Original and a copy of Death Certificate (DC);
  • Original and a copy of Letter of Administration (LA)/ Probate;
  • A copy of executor’s/ administrator’s IC;
  • A copy of the Provider’s Withdrawal Form; and
  • A copy of executor’s/ administrator’s bank account (not the front cover).

A copy of the above listed supporting documents must be sent by the PRS Provider to PPA via post/ e-mailed as soon as reasonably possible for prior authorization by PPA.

Following the death of a PRS Member, where payment to the trustee, executor or administrator of the deceased PRS Member requires the prior authorization of the PPA, a PRS Provider must pay the trustee, executor or administrator of the deceased PRS Member the proceeds of the re-purchase of units within 10 days after the PPA’s authorization is received by the PRS Provider.

If the deceased PRS Member has multiple PRS accounts, PPA will:

i. Alert other relevant PRS Providers on the status of the deceased PRS Member to enable PRS Providers to monitor for any unauthorised instructions from a third party to the PRS Providers; and

ii. Inform the executor or administrator of the estate of the deceased Member of other PRS accounts that may be held by the said deceased Member with different PRS Providers.

(Note: In the event of death, the PRS monies will return to the estate of the deceased member to be distributed in accordance to the instruction of the court.).

What happens to the PRS investments upon sudden death?

Beneficiary nomination is not permitted under the law for PRS and in the event of death, the PRS monies will return to the estate of the deceased member to be distributed in accordance to the instruction of the probate court. (To be updated once there is Nomination).

Bankruptcy

What happens to the contributions in my PRS account if I am declared a bankrupt after having participated in the scheme?

Am I still able to withdraw the funds? As an undischarged bankrupt, you or your employer may continue to contribute to PRS. You will still enjoy rights accorded to PRS members including the right to switch funds or request for transfer of any accrued benefits to another PRS Provider. You may also request for withdrawals according to the permitted circumstances as specified in the Guidelines of Private Retirement Schemes (“PRS Guidelines”). However, withdrawals from the account will be subjected to the oversight and conditions from the Director General of Insolvency (“DGI”).

Tax

Penalties Pre-Retirement Withdrawals

Is the 8% tax applied to the full withdrawal amount or the net amount minus fees/ charges?

The tax penalty of 8% imposed on pre-retirement withdrawals would be applied on the full withdrawal amount.

Retirement Withdrawals

I am 55 years old and I wish to withdraw in full from my PRS account. Would I incur the tax penalty? I am an employee above 55 years old, but still under employment and I continue to subscribe to PRS. Do I still incur an 8% tax penalty when I withdraw from my PRS account?

There is no tax penalty for withdrawal upon reaching retirement age of 55 years.

Although lump sum withdrawals are permitted, members are encouraged to still continue maintaining regular contributions.