What a PRS is
The Private Pension Administrator Malaysia (PPA) describes PRS as a voluntary long-term savings and investment scheme designed to help boost retirement savings. It is meant to add to, not replace, mandatory retirement savings.
PRS is regulated by the Securities Commission Malaysia (SC). The Capital Markets and Services (Private Retirement Scheme Industry) Regulations 2012 took effect on 19 March 2012. The SC's PRS Guidelines set requirements for PRS providers, PRS scheme trustees and the investments of PRS funds.
PRS funds are offered by PRS providers approved by the SC. PPA's website currently lists 9 providers. PPA itself is the central administrator for PRS and is approved by the SC.
According to PPA, anyone aged 18 and above can contribute, and the scheme is open to both Malaysians and non-Malaysians.
How the money is split and when it can be withdrawn
PPA says each member's PRS savings are split into two sub-accounts. Sub-Account A holds 70% and Sub-Account B holds 30%.
From the day after a member turns 55, withdrawals can be made in full or in part, with no tax penalty.
Before 55, a member can make a general withdrawal from Sub-Account B only, once per calendar year, starting one year after joining. An 8% tax penalty applies to the amount withdrawn.
PPA also lists withdrawals from Sub-Account B for healthcare and housing purposes without the penalty, subject to conditions. Full withdrawals without the penalty are allowed on permanent departure from Malaysia, and for permanent total disablement, serious disease or mental disability.
If a member dies, the balance goes to the nominees named in the nomination form. If there is no nomination, it goes to the executor or administrator of the estate.
Tax relief
PPA says individuals can claim personal tax relief of up to RM3,000 on their PRS contributions, and that this incentive is available until assessment year 2030.
Tax rules can change, so check the latest position with the Inland Revenue Board of Malaysia (LHDN).
How to check that a PRS provider or seller is licensed
PPA's website at ppa.my lists the approved PRS providers and their funds, and has a page on PRS distributors.
The SC Investment Checker at sc.com.my/investment-checker shows whether a person or company is authorised by the SC to offer, promote or sell capital market products and services. Its results also include anyone on the SC Investor Alert List.
Bank Negara Malaysia's Financial Consumer Alert List at bnm.gov.my names unauthorised entities, individuals and schemes that may be wrongly seen as regulated, with their websites and social media links.
Be careful with any offer that calls itself a retirement scheme but does not appear on PPA's list of PRS providers and funds. You can also contact PPA on 1300-131-772 or AskPPA@ppa.my.
SmartChecker shows register records and reviews for the companies it lists, which can help you start your checks.
Common questions
Is PRS compulsory? No. PPA describes PRS as a voluntary scheme.
Who regulates PRS? The Securities Commission Malaysia. PPA is the central administrator approved by the SC.
Can PRS money be withdrawn before 55? Yes, but only from Sub-Account B, once a year after the first year of membership, with an 8% tax penalty unless a penalty-free purpose such as healthcare or housing applies.
How many PRS providers are there? PPA's website currently lists 9 approved providers.