Private Retirement Scheme (PRS)

Private Retirement Scheme (PRS) is a voluntary long-term investment scheme designed to help individuals accumulate savings for retirement. PRS seek to enhance choices available for all Malaysians, whether employed or self-employed, to voluntarily supplement their retirement savings under a well-structured and regulated environment.Each PRS offers a choice of retirement funds from which individuals may choose to invest in based on their own retirement needs, goals and risk appetite. The fund options under a PRS are intended to enhance long-term returns for members within a regulated framework. Assets of each PRS are segregated from the PRS Provider and held by independent Scheme Trustee under a trust.

PRS YOUTH INCENTIVE

In the 2014 Budget tabled on 25 October 2013, the Prime Minister had announced youth incentive of RM500 to contributors who participate in the PRS scheme to inculcate the importance of saving from an early age to ensure sufficient savings after retirement. The RM500 is a one-off contribution by the Government to young PRS members to encourage youth to undertake long-term savings for retirement through the PRS.

The Government will contribute RM500 per qualified person to be used to purchase units of PRS funds in the PRS account of youths, whom have accumulated a minimum gross contribution amount of RM1,000 within a year. This incentive will be made available for a period of 5 years from 2014 to 2018.

Individual Tax Relief

The individual tax relief is applicable on gross contribution, i.e. inclusive of upfront charges.

For example, if an individual invested RM3,000 with a Provider and that Provider deducted RM10 for account opening fee, and RM50 for sales charge, the full RM3,000 is eligible for tax relief, and not RM2,940.

Tax relief of up to RM3,000 per annum will be applied on taxable income, for individual contributions made to the PRS for the first 10 years from assessment year 2012. Individuals may claim their individual tax relief for the PRS under Section F-F18 of the BE Form, which can be located at the Lembaga Hasil Dalam Negeri Malaysia (LHDNM) website at www.hasil.gov.my

Contribution statements to support the claim for tax relief may be obtained from the Provider as proof of investment made for the year of assessment.

PRS PROVIDERS

1. Affin Hwang Asset Management Berhad
2. AIA Pension and Asset Management Sdn. Bhd.
3. AmInvestment Services Berhad
4. CIMB-Principal Asset Management Berhad
5. Kenanga Investors Berhad
6. Manulife Asset Management Services Berhad
7. Public Mutual Berhad
8. RHB Asset Management Sdn. Bhd

For more information : http://www.ppa.my/

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About Hannah Tan

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