What you should know about the Private Retirement Scheme (PRS)

• New way to boost retirement savings
  PRS is a voluntary scheme for all individuals who are 18 years old and above. It is an additional way to boost total retirement savings, whether you are an Employees Provident Fund (EPF) member or not. If you are an EPF member, then PRS can complement your EPF savings.

• Latest incentive announced by Government
  Government proposes in budget 2014 a one-off incentive of RM500 to contributors who participate in the PRS scheme with a minimum cumulative investment of RM1,000 within a year. The incentive, which is available for individuals aged between 20 and 30 years will be implemented from 1st January 2014.

• Enjoy additional tax savings
  Enjoy up to RM3000 per year personal tax relief* on top of the RM6000 per year tax relief for the mandatory retirement savings contribution and life insurance premiums.

* For contributions into the PRS and deferred annuities effective from years of assessment 2012 to 2021

Introduction

• Recognising the need to cultivate a retirement savings culture amongst the younger demographics whilst appreciating the financial constraints faced by this group, the Government will make a one-off contribution to provide a head start for the 4.2 million youths between the ages of 20-30.

• The Government will contribute RM500 per person into the PRS accounts of youths, who have accumulated RM1,000 within a year based on the following eligibility.

Eligibility

• Malaysian with existing PPA account or new member

• Individual between ages of 20 to 30 (based on birthdate)

• Minimum RM1,000 gross contribution in a single PRS fund of a PRS Provider

• Effective period – Between 2014 to 2018 in a single year within a calendar year