Wednesday, July 22, 2015

How to sign up for Private Retirement Scheme (PRS)

How do i come across PRS?
I joined a bank recently and usually banks will payout 3-4% extra as employer contribution towards EPF for their employee, so happen this bank will take the extra 3-4% and put in into PRS instead of EPF employer contribution. Story short, so:

What is Private Retirement Scheme (PRS)?
Private Retirement Scheme (PRS) is a voluntary long-term investment scheme designed to help individuals accumulate savings for retirement. It complement the mandatory contribution:

PRS provides - Investment Banks/House will use your contribution to invest in PRS unit trust and provide returns to you at the end of the day. You get to choose which PRS unit trust you would like to invest.

Private Pension Administrator (PPA) - acts as an administrator for PRS, something like Bursa malaysia who administrate the shares.

Suruhanjaya Sekuriiti/Security Commission (SC) - regulates and supervises all intermediaries in the PRS industry.

What are the Benefits?
1) Tax relief of up to RM3000 max for a period of 10 years
2) Youth incentive - Government will contribute RM500 into your PRS accounts if you have accumulated RM1,000 within a year AND you must age between 20 -30 yrs old. *From year 2014 to 2018

How to open account for Private Retirement Scheme (PRS)?
1) Open an account with Fundsupermart. - Doable online.
2) Open an PPA account here. - Photocopy ID and Reg form.
3) Choose your PRS funds you would like to invest in.
4) For step 2 and step 3, you need to provide original signed copy to fundsupermart. - mail or dropby their office.


Things to note:
1) Withdrawal is allow only when:
    a) Reach the age of 55 - partial/full withdrawal.
    b) Permanent departure from M'sia.
    c) Death
2) EPF monies are not allow to withdraw and contribute to PRS.
3) PRS is the same concept like unit trust, there are sales charges incurred too!