Study guide
7B.8 The PRS Account Structure (Sub-Accounts A and B) and Vesting
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.8 The PRS Account Structure (Sub-Accounts A and B) and Vesting
Key Takeaways Explain This Topic AI
All PRS contributions are split 70% into sub-account A and 30% into sub-account B.
Retirement age under the PRS Guidelines is 55, or another age the SC may specify.
Accrued benefits are a member's beneficial interest in a PRS and, under section 139ZA of the CMSA, cannot be the subject of a charge, lien, pledge or assignment and are protected from judgment debt.
A member holding conditionally vested units cannot transfer them to another PRS Provider or withdraw them until they vest.
When a vesting event occurs, the PRS Provider must either repurchase conditionally vested units and pay the employer within 10 days or vest them in the member or the member's estate.
Last updated: October 2026
The 70:30 Split
Every contribution to any fund in a PRS is divided into two sub-accounts:
Sub-account Share Access
A 70% Cannot be withdrawn before retirement age except in permitted circumstances: death, permanent departure from Malaysia, or permanent total disablement, serious disease or mental disability
B 30% Can be withdrawn once a year before retirement, usually with a tax penalty , which does not apply to permitted withdrawals such as housing and healthcare
Retirement age is 55 , or another age the SC may specify.
Study guide examples
XY Bond Fund (NAV rises):
- Date Contribution A / B allocation NAV Units bought A / B Holding A / B Value A / B
- 1 May 20X3 RM1,000 RM700 / RM300 RM1.00 700 / 300 700 / 300 RM700 / RM300
- 1 Jan 20X4 RM1,000 RM700 / RM300 RM2.00 350 / 150 1,050 / 450 RM2,100 / RM900
YZ Equity Fund (NAV falls):
- Date Contribution A / B allocation NAV Units bought A / B Holding A / B Value A / B
- 1 May 20X3 RM1,000 RM700 / RM300 RM1.00 700 / 300 700 / 300 RM700 / RM300
- 1 Jan 20X4 RM1,000 RM700 / RM300 RM0.50 1,400 / 600 2,100 / 900 RM1,050 / RM450
Notes:
Every new contribution , to any provider and any fund, is split 70:30.
All withdrawals from sub-account B other than at retirement are pre-retirement withdrawals; the tax penalty is collected by the PRS Provider from the amount withdrawn (except for exempt purposes).
Accrued Benefits and Vesting
Accrued benefits are the amount of a member's beneficial interest in a PRS: the amounts in sub-accounts A and B.
Protection Source
Accrued benefits are protected from judgment debt and cannot be the subject of a charge, lien, pledge or assignment Section 139ZA of the CMSA
Income or profits from investing accrued benefits (after losses) also vest in the member as soon as received by the PRS Provider or Scheme Trustee, whichever is earlier Section 139Y(2) of the CMSA
Vested and conditionally vested units
Where contributions follow a vesting schedule , the provider issues vested and conditionally vested units. Both carry equivalent rights as fund members, but conditionally vested units cannot be transferred to another provider or withdrawn . Providers need maintain sub-accounts A and B only for vested units.
Vesting Schedules
Employers may attach a vesting schedule to their contributions to promote loyalty. It is optional and determines how much of the employer's contributions the employee is entitled to, based on length of service. The provider must ensure such benefits are not transferred or withdrawn until unconditionally vested .
Study guide example – graded vesting schedule:
- Years of service % of employer contributions vested
- After 1 year 0%
- After 2 years 25%
- After 3 years 50%
- After 4 years 75%
- After 5 or more years 100%
An employee who leaves after three years keeps only 50% of the employer's contributions; the rest is forfeited. If the employer had contributed RM12,000 (now worth RM13,000), the employee keeps RM6,500 of it. The employee's own contributions are always theirs.
Common Exam Traps on Sub-Accounts and Vesting
The split is 70:30 on every contribution , not on the account balance; fund performance can later change the ringgit values in each sub-account.
Sub-account A is not untouchable: death, permanent departure, and permanent total disablement, serious disease or mental disability all allow withdrawal of A and B.
A graded vesting schedule vests employer money in steps; the member's own contributions vest immediately.
Conditionally vested units carry normal fund rights but cannot be withdrawn or transferred until they vest.
The PRS Provider's Duties on Vesting
The vesting schedule's terms must cover, at least:
- the terms of the employer's contribution and of vesting units;
- the rights attached to vested and conditionally vested units, including limits; and
whether conditionally vested units become unconditionally vested on events such as: cessation of employment; the employer being wound up or dissolved; appointment of a receiver and manager; the employer entering a compromise or scheme of arrangement with creditors; a merger or acquisition of the employer; termination of the vesting schedule; death of the employee; or other circumstances specified by the SC.
When notified of a relevant event, the provider must either:
repurchase the conditionally vested units and pay the proceeds to the employer within 10 days ; or
vest the units in the member or the member's estate as soon as practicable.