COMPANIES should take advantage of the tax exemptions provided by the Government under the private retirement scheme (PRS).
Private Pension Administration Malaysia (PPA) chief executive officer Husaini Hussin said by providing staff benefits in the form of PRS, companies could save on paying taxes.
“As we know, companies are entitled to claim up to 19% of their employees’ remuneration out of which 12% goes to the Employees Provident Fund (EPF).
“So there is still an additional 7% that companies can enjoy to reduce their tax payables.
“We are encouraging companies to offer additional savings through employee contributions, much like EPF but this is a voluntary scheme,” he said.
Husaini was speaking at a special presentation to Malaysia Retail Chain Association (MRCA) members during the association’s monthly meeting at Menara Star, Petaling Jaya.
“Employees can also opt to contribute to PRS through salary deduction,” he said.
He added that the PRS Youth Incentive, introduced by the Government in 2014 for Malaysians aged between 20 and 30, saw 70,000 youths benefitting from the scheme with a payout of RM45mil.
Under the incentive, contributors will receive a RM500 boost from the Government if they save a minimum of RM1,000.
Since Budget 2017, the Government has increased the incentive to RM1,000 for a minimum saving of RM1,000.
Husaini later updated members on the recently launched nomination process.
The process, which was rolled out on Aug 1, enables PRS members to name their nominees to facilitate and expedite the withdrawal of their PRS balance in the event of their demise.
“The nomination document will supersede all wills, and the withdrawal process would take a matter of days if all the supporting documents are in order,” said Husaini.
Previously, the executor or administrator of the deceased’s estate would have to initiate the death withdrawal process, which included presenting a grant of probate or letter of administration before their savings are released.
Members can list a maximum of six nominees, and submit their completed forms to their respective PRS providers or reach out to their consultants.
The eight providers are – Affin Hwang Asset Management Bhd, AIA Pension and Asset Management Sdn Bhd, AmFunds Management Bhd, CIMB-Principal Asset Management Bhd, Kenanga Investors Bhd, Manulife Asset Management Services Bhd, Public Mutual Bhd and RHB Asset Management Sdn Bhd.
To make it convenient for members who hold accounts with multiple PRS providers, they only need to submit their forms to one of their respective providers as the PPA database is centralised.
PRS members will be able to submit their forms personally at PPA roadshows.
Since it was rolled out in 2012, there are 270,000 PRS members with assets under management of almost RM2bil.
The PPA, launched together with the establishment of PRS in 2012, is a body approved by the Securities Commission to protect PRS members’ interests and educate the public on PRS.