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7B.5 The PRS Framework and the Private Pension Administrator (PPA)

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FIMM Combined Examination FCE

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1 Introduction: The FIMM Combined Examination (FCE)

0.1 FCE Exam Facts, Registration Rules and How to Use This Guide

2 Chapter 1: Understanding Collective Investment Schemes in Malaysia

1.1 What a Collective Investment Scheme Is and How Malaysian CIS Are Classified 1.2 Investment-Linked Funds Are Not UTS; Industry Growth and History 1.3 Participants in the CIS Ecosystem: Unit Holders, Managers, Trustees, Distributors and Regulators

3 Chapter 2: Introduction to UTS and PRS

2.1 UTS and PRS as Investments: Mechanics, Unit Calculations and How They Compare 2.2 Types of Funds: By Asset Class, Fund Structure and Investment Objective 2.3 Methods of Investing and Dollar Cost Averaging 2.4 Benefits and Disadvantages of Investing in UTS and PRS 2.5 Understanding Risk and the Risks of Investing in Schemes 2.6 Shariah-Compliant Schemes, Their Risks and the Role of the Shariah Advisory Council

4 Chapter 3: Regulatory Framework

3.1 The Regulatory Framework: The SC, Other Regulators and FIMM's Dual Role 3.2 Legislation, SC Guidelines and FIMM Rules Governing UTS and PRS 3.3 Regulation of Scheme Providers and Oversight Functions 3.4 The Deed, the Prospectus or Disclosure Document, and the Product Highlights Sheet 3.5 Portfolio Constraints: Permitted Investments, Liquidity, Borrowing and Exposure Limits 3.6 Regulations for Other CIS: Real Estate Investment Trusts and Exchange-Traded Funds 3.7 Regulation and Duties of the Scheme Trustee 3.8 Regulation of Marketing and Distribution: Distributor Categories, Collection Points and Agency Structure 3.9 Registration of Consultants: Eligibility, Fit and Proper, Duration, Variation and Revocation

5 Chapter 4 (Part 1): Marketing and Distribution — Disclosure and Transactions

4.1 Servicing Investors and the Contents of the Prospectus and Disclosure Document 4.2 The Product Highlights Sheet, Advertising Standards and Account Maintenance 4.3 The Purchase Process and Suitability Assessment Before Personal Advice 4.4 Cooling-Off Rights, Repurchase of Units, Suspension and Switching 4.5 Financing the Purchase of UTS: Process, Safeguards and the Risk Disclosure Statement 4.6 EPF Transfers and Withdrawals for Investment in Approved Unit Trust Funds

6 Chapter 4 (Part 2): Marketing and Distribution — Distributions, Reporting and Service

4.7 Distributable Income, Distributions and NAV, "Buying" a Distribution and Taxation 4.8 Reporting to Investors: Confirmations, Statements, and Semi-Annual and Annual Reports 4.9 Marketing Principles, Delivering Quality Service and Handling Complaints 4.10 The Effect of Inflation, Taxation and Investment Costs on Returns 4.11 Investment Alternatives to UTS and PRS

7 Chapter 5: Code of Ethics

5.1 Compliance, Ethics and the Structure of the FIMM Code of Ethics 5.2 Core Principle 1: Honesty and Integrity 5.3 Core Principle 2: Professionalism 5.4 Core Principles 3 to 5 and Non-Compliance: Conflicts, Disclosure, Confidentiality and Misconduct

8 Chapter 6: Personal Financial Planning

6.1 Personal Financial Planning: Definition, Features, Five Areas and the Six Steps 6.2 Financial Planner Credentials, Skills, Remuneration, and How a Planner Differs from a Consultant 6.3 The Consultant's Role in Investment Planning and Advising Clients Through the Life Cycle

9 Chapter 7A: Features and Operations of UTS

7A.1 Structure of a UTS, the Trust Deed, the Parties and Modifying the Deed 7A.2 UTS Fees, Charges and Expenses, and the Management Expense Ratio 7A.3 Dealing in Units, Valuation, NAV Calculation and Unit Prices 7A.4 Forward and Historical Pricing, and the UTMC's Holding of Units 7A.5 Unit Splits, Distributions and Their Effect on NAV 7A.6 Measuring UTS Performance: Returns, Performance Tables, Risk Measures and Qualitative Factors 7A.7 Operational Aspects of Shariah-Compliant UTS and PRS and the Shariah Contracts Between the Parties 7A.8 Borrowing to Invest in UTS and the Risks of Loan Financing

10 Chapter 7B (Part 1): The Pension Landscape and the PRS Framework

7B.1 The Malaysian Pension Landscape and the Adequacy of Retirement Savings 7B.2 The World Bank's Five-Pillar Pension Framework in the Malaysian Context 7B.3 Key Players: EPF, KWAP, LTAT, Employer-Sponsored Schemes and Annuities 7B.4 Why Malaysia Needs PRS: Ageing, Longevity Risk and the Benefits of PRS 7B.5 The PRS Framework and the Private Pension Administrator (PPA) 7B.6 PRS Structure, the Trust and Deed, Advantages over Other Products, Eligibility and Contributions

11 Chapter 7B (Part 2): PRS Operations

7B.7 The PRS Default Option and Tax Incentives for Members and Employers 7B.8 The PRS Account Structure (Sub-Accounts A and B) and Vesting 7B.9 PRS Withdrawals: Pre-Retirement, Retirement, Permanent Departure, Incapacity and Death 7B.10 Switching Between Funds and Transferring Between PRS Providers (Portability) 7B.11 Unclaimed Monies, Death of a Member and PRS Nomination 7B.12 PRS Funds: Number, Core and Non-Core Funds, Objectives, Risk Profiles, Asset Classes, Authorisation and Naming 7B.13 PRS Fees, Charges and Expenses 7B.14 PRS Unit Creation, Forward Pricing, Valuation, Distributions, Performance Measurement and Electronic Communication

7B.5 The PRS Framework and the Private Pension Administrator (PPA)

Key Takeaways Explain This Topic AI

PRS is a capital market product and a voluntary long-term investment scheme, and the SC approves PRS Providers, Scheme Trustees and schemes and licenses PRS distributors where applicable.

The PPA is approved by the SC to keep records, administer and provide customer service for PRS members and contributors, and it issues each member a lifetime PRS account number.

At least one-third of the PPA's board must be public interest directors, and its directors and CEO must be approved by the SC.

Breaching the PPA's duty of secrecy can bring a fine of up to RM3 million, imprisonment of up to five years, or both.

The PPA does not accept contributions; members contribute through PRS Providers, which may also collect PPA fees as the PPA's agents.

Last updated: October 2026

The PRS Framework

The PRS framework came from the SC's recommendations to the Government to accelerate the private pension industry. A robust industry needs a strong regulatory structure , so the SC has the duties, powers and resources to regulate, supervise and enforce. The aim: a well-functioning industry that promotes stability and protects members and beneficiaries .

PRS is a capital market product and a voluntary long-term investment scheme to help individuals save for retirement.

The SC approves PRS Providers, Scheme Trustees and the schemes, and licenses PRS distributors where applicable, to ensure good conduct and reasonable advice.

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The Private Pension Administrator (PPA)

The PPA is central to an efficient PRS industry. It sets up and runs the administrative system for all PRS, facilitates and maintains all PRS transactions by contributors and members, and is a resource centre for PRS data and research.

Duties

The PPA is approved by the SC to perform record keeping, administration and customer service for members and contributors. Specific duties include:

  • receiving and transmitting instructions in the manner the SC specifies;
  • keeping records of all transactions and money paid or received;
  • providing information to PRS Providers and members; and

other duties the SC specifies.

It must also:

  • act in the public interest , particularly to protect members;
  • notify the SC immediately of adverse circumstances likely to affect members;

not impose or vary fees on providers or members without the SC's prior approval , and get SC approval for its terms of reference and operating rules;

promote awareness of PRS, act as a data and research centre, and monitor fees and performance across PRS Providers; and

not delegate or outsource any duty without SC approval.

FIMM's practice question asks which is not a PPA duty: appointing the Scheme Trustee for each scheme is not.

Governance

  • Rule Detail
  • Directors and CEO Must be approved by the SC
  • Board composition At least one-third public interest directors

Security Take reasonable measures to protect members' information against unauthorised access, alteration, disclosure and dissemination

  • Secrecy Must not divulge members' information except as sections 139N and 139O of the CMSA allow
  • Penalty for breaching secrecy Fine of up to RM3 million , imprisonment of up to five years , or both
  • Functions in practice

Receive registration data from PRS Providers and issue a lifetime PRS account number .

Keep databases of all private pension account numbers and transactions.

Transmit members' instructions to update details, transfer between providers and withdraw .

Issue consolidated statements to all members.

Run a website with online account access, details of each provider's schemes and education material.

Operate a call centre and handle complaints.

Produce statistical and compliance reports on the industry.

The PRS Account

Step or feature Detail

Opening Complete the account-opening form, pay a small fee and provide identification (online procedures may differ)

  • Access The PPA sends a unique username and password for online access at www.ppa.my
  • Coverage The PPA account shows all contributions by the member or an employer to all PRS Providers
  • Provider accounts Each PRS Provider also keeps an account for each member of its schemes
  • Statements The PPA sends consolidated statements; each provider sends its own statements
  • Contributions The PPA does not accept money ; contributions go through PRS Providers
  • Fees

PRS Providers charge for investment management, trustee and administrative costs, set out in each disclosure document.

The PPA charges fees for opening, facilitating transactions and maintaining accounts. Its website lists the main fees of each provider for comparison.

PPA fees may be collected by PRS Providers acting as the PPA's agents ; these are not the provider's remuneration.

Keeping Track

Members can check holdings online with the PPA or ask their providers, and receive periodic provider statements and PPA consolidated statements. For consolidated holdings and total sub-account B balances, ask the PPA ; for provider-specific details (such as pre-retirement withdrawal amounts), ask the provider .

Applying It: One Member, Two Providers

Puan Aisyah, 38, has PRS units with Provider X, funded by her employer, and tops up a Shariah-compliant fund with Provider Y herself. Her questions show how work is split between the PPA and the providers:

Her request Who handles it Reason

"What is my total PRS balance across both providers?" PPA Only the PPA account reflects contributions to all PRS Providers, and the PPA issues the consolidated statement

"Can I pay this month's top-up to the PPA?" Provider Y The PPA does not accept contributions

"I want to move my Provider X units to Provider Y." Provider Y receives the PPA's Transfer Form; Provider X redeems and pays The PPA's role is to transmit and record transfer instructions (section 7B.10 covers the steps)

  • "Which provider charges lower fees?" PPA website It lists each provider's main fees for comparison
  • "My online login does not work." PPA The PPA issues the username and password for www.ppa.my

The same split explains a common distractor: the PPA keeps records, transmits instructions and gives consolidated information, but it never accepts contributions and never manages a fund .