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Private Retirement Scheme Available Now
   

About The Scheme


  1. What is a Private Retirement Scheme (PRS)?
    PRS is an investment scheme that facilitates the accumulation of retirement savings through voluntary contributions. The PRS is designed to complement the Employees Provident Fund (EPF) and is regulated by Securities Commission Malaysia (SC).


  2. Who are the players of the PRS?
    Administrator       The Private Pension Administrator (PPA) is a body approved by the SC to perform the function of record keeping, administration and customer service for the members and contributors in relation to contributions made in respect to the PRS.
    Trustees The trustee is an independent third party that holds the PRS assets for the benefit of contributors. It also ensures that the PRS is properly accounted for and managed in compliance with its investment mandate.
    Providers As of November 2012, there are eight providers approved by SC. Each Provider manages their respective Private Retirement Scheme, which in turn consists of numerous PRS funds.
    Distributors These are the entities that sell the PRS funds, including sales agents, bank branches, Fundsupermart.com etc.
    Contributors Individuals who contribute to the scheme.


  3. What are the types of Private Retirement Schemes available?
    Broadly speaking, each Provider will provide at least three Core funds. According to the guidelines set by SC, the three Core funds have the following features:
     
    Conservative
    Moderate
    Growth
    Default age group*
    50 years old and above
    40 to below 50 years old
    Below 40 years old
    Investment in Equities
    Up to 20% of NAV
    (No foreign investment is allowed)
    Up to 60% of NAV
    (Foreign investment is allowed)
    Up to 70% of NAV
    (Foreign investment is allowed)
    Investment in Fixed Income Securities
    At least 80% of NAV
    (with at least 20% of NAV
    in money market instruments)
    *Contributions will go to the default PRS fund according to age group if no selection is made by the contributor
    Source: Guidelines on Private Retirement Scheme (Updated: 25 October 2012)
    Non-Core funds may be provided at the discretion of the provider. However, regardless of the type of fund, all PRS funds can only invest in the following:
    1. Transferable securities i.e. equities, warrants and bond/debentures
    2. Cash, deposits and money market instruments
    3. Units/shares in collective investment schemes
    4. Derivatives
    5. Real estate


  4. What are the similarities with EPF?
    Besides sharing the same objective of helping to accumulate retirement savings, contributions to the PRS are also split and maintained in two sub-accounts, i.e. sub-account A which comprises 70% of contributions and sub-account B which comprises 30% of contributions. Full withdrawals from the PRS account can only be made upon the satisfaction of certain criteria* and partial-withdrawals can only be made from sub-account B subject to restrictions and penalties**.

    *Reaching the prevailing retirement age, death or leaving Malaysia permanently.
    **Members may only withdraw the amount in sub-account B once a year. The withdrawal amount is subject to a pre-retirement withdrawal fee of RM25 and also a tax penalty of 8%. The tax penalty will be deducted before the balance is credited to your account. The first pre-retirement withdrawal is allowed only after a year from the date of the first contribution by the PRS contributor. Subsequently, pre-retirement withdrawals will be allowed once in every calendar year.


  5. What are the differences compared to EPF?
    There are two main differences:
    1. Generally, all employees in Malaysia who have reached the age of 16 and employed under a contract of service are required to contribute to the EPF. By contrast, the PRS is a voluntary scheme for individuals who are 18 years old and above. Under the PRS, a contributor can contribute any amount as and when he or she is able to do so, subject to a minimum initial contribution of RM100.


    2. The EPF is a government agency that comes under the purview of the Ministry of Finance and has a legal obligation to maintain a guaranteed return of at least 2.5% annually to its members. On the other hand, the PRS is managed by the private financial institutions (Providers) approved by the SC. The PRS does not provide a guaranteed return.
 

Benefits and Incentives


  1. Do I need to invest in PRS?
    With the increasing life expectancy and rising living costs, the consensus agrees that the average savings that an EPF member has upon retirement age is not sufficient to live on. To this end, the government has recently passed a bill requiring the private sector to raise the retirement age from 60 in order to lighten the financial burden of retirees. So the answer is yes, you do need to invest in PRS, especially if your EPF is projected to be below RM130,000 upon retirement.


  2. What are the incentives of investing in PRS?
    No/Minimal sales charge – PRS funds have no/minimal sales charge to ensure that you enjoy the lowest investment costs on your retirement savings.
    Low entry requirements – Minimum initial contribution is RM100 and minimum subsequent contribution is RM50 per fund.
    Flexibility – contributors can choose funds that best suit their investment needs.
    Convenience – automatic monthly contributions via Regular Savings Plan.
    Transparency – contributors have timely access to fund performance and information.
    Tax relief - up to RM 3,000 per tax payer per year of assessment (Y/A) from Y/A 2012 to 2021.


  3. Below is an example on tax relief.
    Let’s say you are an unmarried individual with a taxable income of RM118,000 for Y/A 2012. Assuming that you have no tax exemptions and after deducting tax reliefs comprising of RM9,000 personal relief and RM6,000 EPF relief, you arrive at your chargeable income of RM103,000. Based on the Inland Revenue Board of Malaysia’s scale rate, your tax payable would be RM15,105.

    If you had contributed to a PRS for the amount of RM3,000 and above during Y/A 2012, your tax payable would be reduced to RM14,325. That’s a tax savings of RM780! See the table below for more examples.
    Annual Chargeable Income Before RM3,000 PRS Relief
    Tax Savings After RM3,000 PRS Relief
    RM2,500
    RM0
    RM5,000
    RM25
    RM10,000
    RM90
    RM20,000
    RM90
    RM30,000
    RM210
    RM40,000
    RM360
    RM50,000
    RM360
    RM60,000
    RM570
    RM70,000
    RM570
    RM80,000
    RM720
    RM90,000
    RM720
    RM100,000
    RM720
    RM103,000 and above
    RM780
    Source: Fundsupermart.com compilations
 

About The Transaction


  1. Who are eligible to buy PRS funds?
    Malaysians and foreigners who are 18 years of age and above are eligible to sign up for the scheme.


  2. What are the steps to invest in a PRS?
    First, you will need to fill up the following documents and mail or pass the documents to us. We require your original forms.
    1. PPA Account Opening Form. For first-time PRS transaction only.
    2. Provider’s account opening form cum transaction form. For each initial subscription only.
    3. A copy of Malaysian NRIC or passport for foreigners. The front and back of the Malaysian NRIC must be on a single page. For each transaction.

    Important notes when providing the documents:
    • Use BLACK pen only.
    • You can cross your NRIC/passport photocopy with the words “For PPA Use Only”. Any other words will not be accepted.
    • PPA Account Opening Form and Provider's PRS Account Opening Form must be printed completely (i.e., both the front and back pages) on one piece of clean A4 paper for each form. When printed correctly, the front page of the form will have the spaces that you need to fill up, while the back page will have the terms and conditions.
    • No holes and/or correction liquid or tape can be used on the forms. Any corrections on the forms are not allowed.
    • Do not print on recycled paper. Only fresh clean paper can be used.

    Our mailing address can be found on the Locate Us page.
    Please include in your payment an additional RM10 for the opening of a PPA account for first-time PRS contributors.

    Secondly, please make the payment by cheque or online payment to our accounts as follow:
    1. Maybank
      Account Name : IFAST CAPITAL SDN BHD – CLIENT TRUST SUBSCRIPTION ACCOUNT
      Account Number : 5140 1100 3668

    2. Standard Chartered Bank
      Account Name : IFAST CAPITAL SDN BHD – CLIENT TRUST ACCOUNT
      Account Number : 3121 5706 4628

    Once again, please do not forget to include in your payment an additional RM10 for the opening of your PPA account if you are a first-time PRS contributor.


  3. But I already have an EPF unit trust account and also a regular unit trust investment account. Do I still need to open a new account?
    Although you will not need to open an additional Fundsupermart.com account, you will still need to open a PPA account and a Provider account. These accounts are kept separate from EPF and regular unit trust investments. Your PRS balance will be shown separately from your EPF and regular unit trust investment balances in your “View Holdings” page.


  4. What is the cut-off time for transactions?
    Your order will only be transacted once we receive your cheque/online payment. The cut-off time for same-day transaction is 3pm on a business day and we do not wait till your cheque is cleared before we transact your order. Payments received after 3pm on a business day or on a non-business day will be transacted on the next business day.


  5. Can I switch my PRS funds?
    Yes, you can switch between the PRS funds of the same Provider. There is no switching fee and also no restriction as to the number of switching transactions that a contributor can perform.


  6. Are there any fees chargeable to my investments?
    The following fees are levied on the PRS fund:
    1. Management fee
    2. Trustee fee
    3. Local and foreign custodian fees
    4. PPA administration fee
    These fees are deducted before arriving at a fund’s net asset value (NAV).

    The following fees/charges are charged to contributors:
    1. Fund sales/redemption charge, if any
    2. PPA account opening fee RM10 (one-off)
    3. PPA annual fee RM8 (not applicable for the first year the account is opened and the year(s) where no contribution is made)
    4. PPA pre-retirement withdrawal fee RM25 per transaction
    5. Pre-retirement withdrawal tax penalty of 8% payable to Inland Revenue Board of Malaysia



  7. How often do I receive a PRS statement?
    The PRS statement will be sent by the Provider directly to you semi-annually. However, you can always check your balance online at Fundsupermart.com at any time.


  8. Can I invest via a Regular Savings Plan?
    Not at this moment but we will be offering this option in 1Q 2013. As for now, only lump sum investments are accepted.


  9. Can I transfer my PRS balance from one Provider to another?
    Yes, but this service is only available from 1Q 2013.
 

HwangIM PRS Funds Available NOW!


    We are now accepting orders for HwangIM PRS funds via offline transaction forms.

    We currently offer PRS funds from Hwang Investment Management Berhad (HwangIM). Pending our online system enhancement for PRS which is expected to be completed in December 2012, we are only taking orders via offline transactions forms for now. HwangIM is a recognised brand in the fund management industry and manages RM17 billion worth of assets as of 30 September 2012 (source: HwangIM) . They offer four PRS funds; three Core funds and one non-Core Shariah-compliant fund.

     
     
    Core Funds
    Non-Core Fund
    Hwang PRS Growth Fund
    Hwang PRS Moderate Fund
    Hwang PRS Conservative Fund
    Hwang AIIMAN PRS Shariah Growth Fund
    Investment Objective To facilitate the accumulation of retirement savings* by Members for their retirement needs, the Fund aims to generate capital growth. The Fund seeks income and capital growth from its investments to facilitate the accumulation of retirement savings* for Members' retirement needs. To provide Members with a Fund that preserves capital* for their retirement needs. To facilitate the accumulation of Shariah-compliant retirement savings* by Members for their retirement needs, the Fund aims to generate capital growth through investments in a collective investment scheme that invests primarily in Shariah-compliant equities.
    Asset Allocation (% of NAV) 0 - 70%: Equities and equity-linked instruments
    30 - 100%: Fixed income instruments
    0 - 60%: Equities and equity-linked instruments
    40 - 100%: Fixed income instruments
    0 - 20%: Equities and equity-linked instruments
    80 - 100%: Fixed income instruments
    95 - 100%: Hwang AIIMAN Growth
    Benchmark 35% FTSE Bursa Malaysia Top 100 Index
    35% MSCI AC Asia ex Japan Index
    30% Maybank 12-Month Fixed Deposit Rate
    30% FTSE Bursa Malaysia Top 100 Index
    30% Dow Jones / Asia Pacific Select Dividend 30 Index
    40% Maybank 12-Month Fixed Deposit Rate
    Maybank 12-Month Fixed Deposit Rate FTSE Bursa Malaysia Shariah Index
    *The Funds are not capital guaranteed or capital protected funds
    Source: HwangIM

    For more information on HwangIM PRS funds, please check out the following reading materials:
    Disclosure Documents
    Core Funds Product Highlights Sheet
    Non-Core Funds Product Highlights Sheet
    Informasi Produk (versi Bahasa Melayu)


    Two easy steps to purchase HwangIM PRS funds offline.

    First, you must fill up the following documents and mail or pass the documents to us. We require your original forms and our mailing address can be found on the Locate Us page.:

    1. PPA Account Opening Form. For first-time PRS transaction only.
    2. Hwang Private Retirement Scheme (PRS) – Account Opening Form. For initial subscription only.
    3. A copy of Malaysian NRIC or passport for foreigners. The front and back of the Malaysian NRIC must be on a single page. For each transaction.

    Next, please make the payment by cheque or Maybank2u third party transfer. Our accounts are as follow:

    1. Maybank - cheque deposit and Maybank2u third party transfer
      Account Name : IFAST CAPITAL SDN BHD – CLIENT TRUST SUBSCRIPTION ACCOUNT
      Account Number : 5140 1100 3668

    2. Standard Chartered Bank - cheque deposit only
      Account Name : IFAST CAPITAL SDN BHD – CLIENT TRUST ACCOUNT
      Account Number : 3121 5706 4628

    Please do not forget to include in your payment an additional RM10 for the opening of your PPA account. Fundsupermart.com will not process your transaction before receiving the PPA account opening fee in the case of first-time PRS contributors. Should you need any assistance, our Client Care can be reached by phone at (03) 2149 0567, by Live Chat (click to launch) or email at clienthelp.my@fundsupermart.com.

 

More PRS Funds to Come...


    We will be carrying more PRS funds from other approved Providers and will make the announcements in due time. At the same time, we are enhancing our website to cater to PRS and are expected to launch this enhancement by December 2012. When this enhancement is launched, Fundsupermart.com account holders will be able to buy PRS funds online and also view PRS fund information on our website in very much the same way as regular unit trusts. Till then, stay tuned!

 

This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund's prospectus and if necessary, consulting with financial or other professional advisers. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer in the website.