PRS vs EPF: A Summary
| Feature Differences | PRS | EPF |
|---|---|---|
| Contribution Type | Voluntary | Mandatory |
| Contribution Amount | No statutory minimum or maximum | Statutory minimum (11% Employee, 12-13% Employer) |
| Contribution Frequency | No statutory interval | Statutory Monthly Contribution |
| Contribution Paid to | Individual PRS Providers | EPF Directly |
| Yearly Personal Tax Relief | RM3,000 | RM6,000 |
| Partial Withdrawal | From Sub-Account B only, and 8% Tax Penalty | Account 2 only, specific reasons no penalty |
| Selection of Fund Investments | Freedom of Selection (among PRS Providers) | Freedom only on Partial Amount (EPF-MIS) |
| Dividend Policy | No statutory minimum (depends on Fund performance) | Minimum 2.5% p.a. |
PRS Providers
The PRS Providers are fund management firms which are approved by the PRS administrators to manage the investment vehicles that contributions get paid into.
The eight PRS Providers approved (as at 5 April 2012) are:
- AmInvestment Management Sdn Bhd;
- American International Assurance Bhd;
- CIMB-Principal Asset Management Bhd;
- Hwang Investment Management Berhad;
- ING Funds Bhd;
- Manulife Unit Trust Bhd;
- Public Mutual Bhd; and
- RHB Investment Management Sdn Bhd.
Measures to incentivise participation in the PRS announced by Najib in the 2012 Budget speech include:-
>> personal tax relief of up to RM3,000 for contributions by individuals to PRS approved by the SC;
>> tax deductions to employers for contributions above the statutory rate up to 19% of employees’ remuneration.
>> tax exemption on income received by funds within the scheme; and
>> proposed tax deduction on employers’ contributions to the scheme for their employees.