A Guide to the Private Retirement Scheme (PRS)

The PRS was introduced as an additional retirement investment scheme over and above EPF to help Malaysians better prepare for retirement. But is it really the thing for you? Here's a quick guide to help you decide.

Much concern has been raised about insufficient retirement funds. As reported by The Sunday Times just last week (the same issue was highlighted last year), the majority of EPF savers had less than RM50,000 in their retirement fund leaving them with only RM208 per month spending for retirement. This forces many to delay retirement or find alternate means of income well into old age.

The Private Retirement Scheme (PRS) was introduced in 2012, and sought to encourage people to build their retirement income in another way beyond EPF. If you've been thinking of contributing; allow us to give you a quick guide to the PRS.

What is the Private Retirement Scheme (PRS)?

The PRS is a defined contribution pension scheme which allows people to voluntarily contribute into an investment vehicle for the purposes of building up their retirement fund. This is especially useful for those who wish to grow their retirement fund and invest but aren't savvy in the area of investment.

However, don't mistake this as a substitution for the EPF scheme. The PRS works as an add-on rather than relying on EPF alone.

Having a voluntary scheme in addition to the EPF allows private company employees and self-employed persons to voluntarily diversify their contributions towards their retirement.

PRS Providers

If you're wondering who actually manages the funds and investments behind the PRS; take heart in knowing that they are actually real investment companies well-versed in the area of building retirement pots. They are collectively called PRS Providers but are made up of a few different entities. Approved by the PRS administrators, these fund management firms manage the funds received while also managing the investments.

To know who manages your funds, here are eight approved PRS Providers:

  • AmInvestment Management Sdn Bhd;
  • AIA Pension and Asset Management Sdn. Bhd
  • CIMB-Principal Asset Management Berhad
  • Affin Hwang Asset Management Berhad
  • Manulife Asset Management Services Berhad
  • Public Mutual Berhad
  • RHB Asset Management Berhad
  • Kenanga Investors Berhad


Unlike the EPF system, you're free to invest any amount, whenever you please. That means there's no pressure to allocate a part of your salary each month at a fixed rate. It largely depends on how much you are willing to invest. If you're unsure of how much to contribute, PPA site illustrates the amount of contribution you can make to reach particular goals.

Investment Choices

There is no such thing as risk-free investment. However, the PRS enables you to customise your investments choices based on your risk appetite but be aware that this will affect your expected return.

If you're interested in investing in more than one PRS Provider, you will have the freedom to choose more than one fund as offered by the different PRS Providers.

Alternatively, a default option is made available for members who select their PRS Provider but do not specify a fund option. By default, investment funds assigned to you are based on different age groups. For instance, aggressive funds for younger investors and conservative funds for older investors.

You are also allowed to switch funds within the PRS system at any time, or change to another PRS Provider once a year, subject to terms imposed by the PRS Provider. Do bare in mind that the first transfer is permitted a year after your first contribution.


Unlike the EPF's statutory minimum dividend rate of 2.5% p.a., the PRS does not have any minimum dividend. In fact, the returns depend on market performance which mean it can go up or down. In the event of non-performing investments, you risk receiving no pay-out or worse, investment values may plunge.

To fully reap the benefits of PRS, it appears that some amount of market know-how will be beneficial as you will be able to actively decide which fund to contribute to and when. You will also be in a better position to know when to pull out of non-performing investments.


Besides being an additional retirement pot; the PRS is also on the list of tax reliefs, meaning your contribution will count to saving you money on your taxes each year. You will be able to deduct up to RM3,000 from your taxable income, which will count towards your final tax payable. Earnings generated by the PRS funds will also be exempted from tax charges.


Similar to the EPF system, contributions are divided into two sub-accounts, which are divided 70/30 in Sub-Account A and Sub-Account B respectively. Upon reaching retirement age (currently 55 years); or in the case of death or emigration, the PRS fund can be withdrawn. If you wish to make partial withdrawal for pre-retirement (before the age of 55), withdrawals can be made from Sub-Account B once a year. But you'll be penalised with an 8% tax from the withdrawal amount.

How do I become a member of a PRS?

To get started, you will need to set up a PPA account by filling up an application form can be obtained from any PRS Provider or from the website of the PPA. Once you have a fund selection in mind, you'll have to inform a PRS Provider.

Can employers make voluntary PRS contributions for their Employees?

Sure they can. In fact it works well for both employers and employees. Employers can invest in a PRS fund as a private pension for their employees together with recruitment benefit like Medical Insurance - a great way to attract loyal employees. On top of that, employers will also receive tax exemption for contributions for up to 19% of an employee's base salary.

Does this sound like the kind of scheme you'd want? Let us know on the comment section below.


Agree or disagree with this post? Questions? You also have your word!

  • Amirah Afiqah

    Thank you for the great information! Now i know what is the differences between EPF and PRS. Hehehe. Thanks! :)

    • Asyraf

      Sound great

      • Tommy

        Been contributing to PRS for 4yrs+ and I must tell you, still making losses... if it's not because of the tax relief, i wouldn't have put it there. They shouldn't name it private retirement scheme because it looks like i'll be getting less money than you put at the end.

        • SY

          Hi Tommy, which provider that you have invested with?

          • Joe

            Try switching fund if the fund is not performing. Do some homework to determine fund performance. Diversify the portfolio to several good performing funds. So far I'm making a decent profit. I have some fund in XXXXXC XXXXXL which making lost thus switching funds to other providers.

            • RinggitPlus

              Hi Tommy,

              You're right, investment schemes are definitely risky. We're sorry you're going through a slump right now but hopefully things will look up for you in future!

            • lin

              Did you suggest for youth to join PRS?

            • Nur syahadah Fauzi

              Is it still working..? I just consider to make PRS but still thinking is it a better choice or not.

              • RinggitPlus

                Hi Nur Syahadah,

                Yes, the scheme is still open and you can apply if you're eligible.
                If you're interested in diversifying your investment, this is a good start.
                Thanks for your question, we hope this helps!

              • Tyara

                Oh no! I just joined PRS scheme. I haven't reached 30. I just want to know will I get the amount that I invested by the age of 55 regardless the market fluctuations? Let say I invested RM100 (plus RM1000 incentive) every month for 25 years. By age of 55 I should be getting RM 31,000 (without profit). Or is it possible that I get lesser than that? thank you and Sorry I'm such a newbie. :)

                • RinggitPlus

                  Hi Tyara,

                  Just with any investment, there are risks that you might not make as much as you project. We recommend you contacting your PRS agent if you want more information about your investment funds.
                  With investing in general, it's best to diversify and place your cash in as many growing pots as possible.
                  Thanks for your question, we hope this helps!

                • Zavier

                  My PRS in CIMB outperformed my EPF. Just go to PPA website, you will get all the information on which is the best performing fund.

                  • Fad

                    If i'm working as a government servant, is it still worth it for me to inest in PRS scheme?

                    • Fad

                      If i am working with government, is it still worth it for me to invest in PRS scheme?

                      • RinggitPlus

                        Hi, Fad.

                        As far as we know, you can invest in PRS as one of the main purposes of PRS is to build up your retirement fund. However, you need to note that PRS functions like any investment in the sense that the return of investment depends on the market performance. As PRS is a voluntary pension scheme, it also depends on the amount you want to contribute to the scheme and your risk appetite.

                        For clarity, we recommend contacting PPA.

                        Thank you for the question and we hope this helps.

                      • Henrie

                        Is every PRS providers different charge? by zero knowledge about investment

                      • leen

                        Will PRS scheme be stopped in the future?

                        • RinggitPlus

                          Hi, leen

                          At this juncture, it is hard for us to comment whether PRS will continue as it is up to the new government's discretion. As of now, PRS continues as usual until the new government issue any new directives.

                          Thanks for the question and we hope this helps.

                        • tia

                          Hi, just wondering, once you've picked one provider when opening the PRS account at PPA online, how to add other providers via PPA? or do we need to personally go to the bank to add the provider?

                          • RinggitPlus

                            Hi, tia.

                            It is in your best interest to contact the provider regarding adding another provider as some providers may not allow the addition.

                            Thanks for the question and we hope this helps.

                          • Tan

                            Hi, can you stop contributing to the PRS scheme you have chosen after a certain period of time(lets say 5 years), and wait until it matures when you reach age of 55 when you start receiving payment?

                            • RinggitPlus

                              Hi, Tan

                              Well, you to ask the PRS provider that you has signed up with. The reason for this is that different providers may have different schedules or procedures when it comes to getting payment.

                              Thanks for the question and we hope this helps.