Private Pension Administration Malaysia (PPA) chief executive officer Husaini Hussin, urges more employers to provide staff benefits in the form of private retirement scheme (PRS) in order to save on paying taxes, The Star reported.
Speaking at a special presentation to Malaysia Retail Chain Association (MRCA) members during the association’s monthly meeting, Husaini said that companies should take advantage of the tax exemptions provided by the government under the PRS.
“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,” he explained.
“We are encouraging companies to offer additional savings through employee contributions, much like EPF but this is a voluntary scheme. Employees can also opt to contribute to PRS through salary deduction,” Husaini 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.
On the recently launched nomination process, Husaini said: “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.”
The new process enables PRS members to name their nominees to facilitate and expedite the withdrawal of their PRS balance in the event of their passing. 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.
A maximum of six nominees can be listed and members should submit their completed nomination forms to their respective PRS providers or reach out to their consultants.
The eight providers are – Affin Hwang Asset Management, AIA Pension and Asset Management, AmFunds Management, CIMB-Principal Asset Management, Kenanga Investors, Manulife Asset Management Services, Public Mutual and RHB Asset Management.
To ease the process for members holding accounts with multiple PRS providers, the PPA database has been centralised, meaning the forms only need to be submitted to one of the respective providers. PRS members will also 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 RM2billion.
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.
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