{"id":69946,"date":"2026-04-16T11:47:07","date_gmt":"2026-04-16T03:47:07","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=69946"},"modified":"2026-04-16T15:11:09","modified_gmt":"2026-04-16T07:11:09","slug":"private-retirement-scheme-prs-beginners-guide","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/private-retirement-scheme-prs-beginners-guide","title":{"rendered":"Private Retirement Schemes: A Guide For First-Timers"},"content":{"rendered":"

You’ve likely been hearing about EPF your whole working life. But lately someone, maybe a banker, a financial influencer, or that one colleague who reads too many finance articles, mentioned PRS. “You should really look into it,” they said. And here you are. Good. Let’s break it down.<\/span><\/p>\n

<\/span>The Uncomfortable Truth About Retirement In Malaysia<\/b><\/span><\/h2>\n

Most Malaysians are not saving enough for retirement. As of end-2025, <\/span>around 58.8%<\/span><\/a> of formal sector EPF members had not yet reached the minimum savings level needed for a sufficient retirement. And the bar isn’t even that high, according to EPF’s Belanjawanku 2024\/2025 guide, a single elderly person needs approximately <\/span>RM2,690 per month<\/span><\/a> just to maintain a reasonable standard of living in retirement.\u00a0<\/span><\/p>\n

That’s the gap that the Private Retirement Scheme (PRS) was designed to help close.<\/span><\/p>\n

<\/span>So, What Exactly Is PRS?<\/b><\/span><\/h2>\n

PRS is a contribution pension scheme that allows people to voluntarily put their money into an investment vehicle in order to bolster their retirement fund. It was introduced by the government in 2012, and is especially useful for those who want to grow their retirement fund through investment but aren’t particularly savvy in that area.\u00a0<\/span><\/p>\n

Think of EPF as your retirement safety net. Mandatory, stable, and reassuring. PRS is the booster rocket on top of that. It doesn’t replace EPF; it aims to supercharge it.<\/span><\/p>\n

PRS is administered by the <\/span>Private Pension Administrator Malaysia (PPA)<\/span><\/a>, a body approved by the Securities Commission Malaysia, responsible for overseeing this voluntary long-term savings and investment scheme.\u00a0 These savings are legally protected from creditor claims under Section 139ZA of the Capital Markets and Services Act (CMSA)<\/a> 2007.<\/span><\/p>\n

PRS is available to all Malaysians and foreigners residing in Malaysia aged 18 and above, whether employed, self-employed, or even those without EPF coverage. Employers can also contribute to PRS on behalf of their employees as part of a benefits package.<\/span><\/p>\n

<\/span>How Does It Actually Work?<\/b><\/span><\/h2>\n

You choose a PRS provider, open an account (there’s a one-time RM10 fee via the PPA, though this is sometimes waived for new enrolments), pick your preferred fund, and start contributing. The minimum initial investment typically starts at RM100, making it accessible for most Malaysians. There’s no fixed monthly amount, you contribute as much or as little as you like, whenever you want.<\/span><\/p>\n

The two sub-accounts: Your PRS contributions are automatically split 70:30 between two sub-accounts. Sub-Account A (70%) can only be withdrawn at retirement age (55 years old), upon death, or if you permanently leave Malaysia. Sub-Account B (30%) allows one pre-retirement withdrawal per year, but you’ll face an 8% tax penalty unless it’s for housing or healthcare purposes. Once you hit 55, you can withdraw from both accounts freely, penalty-free.<\/span><\/p>\n

<\/span>The Big Draw: Tax Relief<\/b><\/span><\/h2>\n

Let’s be honest. For many people, the tax savings are what makes PRS worth a serious look. You can enjoy up to <\/span>RM3,000 per year in personal tax relief<\/span><\/a> on PRS contributions, on top of the separate RM6,000 per year relief for EPF and life insurance. Depending on your tax bracket, this could mean savings of up to RM840 per year.<\/span><\/p>\n

This tax relief has been extended until the <\/span>year of assessment 2030<\/span><\/a> (announced in Budget 2025), giving contributors plenty of time to take advantage of this incentive.\u00a0<\/span><\/p>\n

To put it simply, every ringgit you put into PRS not only grows for your retirement, it also reduces your tax bill today. That’s a rare double win in personal finance.<\/span><\/p>\n

<\/span>Choosing a PRS Provider<\/b><\/span><\/h2>\n

This is where it gets interesting, unlike EPF, you actually get to choose who manages your money. PRS fund managers are required to be approved by the Securities Commission Malaysia. There are currently <\/span>nine approved PRS providers<\/span><\/a>, including AHAM Asset Management, AIA Pension and Asset Management, and others. You can invest through providers directly at their branches or websites, or through digital platforms like FSMOne or Versa, which let you compare and invest across multiple providers in one place.\u00a0<\/span><\/p>\n

<\/span>List Of Approved PRD Providers<\/b><\/p>\n