7B.9 PRS Withdrawals: Pre-Retirement, Retirement, Permanent Departure, Incapacity and Death

FIMM Combined Examination FCE

Track your progress as you read

Finished sections get a check mark.

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.9 PRS Withdrawals: Pre-Retirement, Retirement, Permanent Departure, Incapacity and Death

Key Takeaways Explain This Topic AI

Pre-retirement withdrawals from sub-account B can be made once every calendar year from each PRS Provider, only after the member has been a member for at least one year.

The PRS Provider deducts a flat 8% tax penalty from pre-retirement withdrawals before paying the member, on behalf of the Inland Revenue Board.

The 8% penalty does not apply to withdrawals on death, permanent departure from Malaysia, permanent total disablement, serious disease or mental disability, or for healthcare or housing purposes.

Withdrawals on permanent departure from Malaysia, or for permanent total disablement, serious disease or mental disability, must be of the full amount in both sub-accounts.

After a member's death, the PRS Provider must obtain the PPA's prior authorisation and then pay the proceeds within seven business days.

Last updated: October 2026

The Withdrawal Map

Circumstance Sub-account Extent 8% tax penalty?

On reaching retirement age A and B Partial or full No
Pre-retirement withdrawal for any reason B only Partial or full Yes
Death of the member A and B Partial or full No
Permanent departure from Malaysia A and B Full only No
Permanent total disablement, serious disease or mental disability A and B Full only No

Healthcare (member or immediate family; illnesses listed in Schedule J of the PRS Guidelines) B only Partial or full No

Housing B only Partial or full No

Source: PRS Guidelines (R7-2024), paragraphs 11.37 to 11.39A, which match the study guide's list.

Pre-Retirement Withdrawals

Members may withdraw from sub-account B (30% of contributions) for any reason .

They may withdraw a lump sum or any amount, from one or several funds of a provider, once every calendar year from each PRS Provider . The housing and healthcare withdrawals count within this once-a-year allowance.

The first withdrawal can only be made one year after the initial contribution (by the member or an employer).

The member fills in the provider's form; the provider verifies it (for example, that it is the first withdrawal that year).

The provider does not need the PPA's prior authorisation; it instructs the Scheme Trustee to cancel units.

The provider collects the tax penalty on behalf of the Inland Revenue Board , deducting a flat 8% from the amount withdrawn before paying the member.

Worked example (study guide)

Jon started contributing to PRS Alpha on 1 January 20X3. By 31 December 20X4 he has RM7,000 in sub-account A and RM3,000 in sub-account B , with no withdrawals.

Scenario on 1 January 20X5 Withdrawal Penalty Jon receives
Pre-retirement withdrawal of the whole of sub-account B RM3,000 8% = RM240 RM2,760
Partial withdrawal of RM1,000 from sub-account B RM1,000 RM80 RM920
Emigrates permanently to Australia Must withdraw all RM10,000 (A and B); partial not allowed None RM10,000

Information on consolidated holdings or total sub-account B balances comes from the PPA ; details of pre-retirement withdrawals at a particular provider come from that provider .

Post-Retirement Withdrawals

From retirement age (55) a member can withdraw from both sub-accounts without penalty , as a lump sum or periodically , or simply stay invested . The request goes directly to the PRS Provider ; PPA prior authorisation is not needed, but the provider must notify the PPA of the withdrawal.

Permanent Departure from Malaysia

Malaysians may withdraw if they emigrate permanently .

Foreigners may withdraw on cancellation of their work permit or permanent residency .

The withdrawal must be of the full amount in both sub-accounts. The PPA's website lists the documents required.

Death of a Member

A nominee (section 7B.11) or the member's personal representative (executor or administrator) applies to the PRS Provider, whether or not a nomination exists.

Supporting documents (for example the death certificate, probate, letters of administration or Sijil Faraid ) are sent to the provider, which submits them to the PPA.

The provider must obtain the PPA's prior authorisation before instructing the Trustee to cancel units, then pay the proceeds within 7 business days of receiving it.

Advising on Withdrawals: Three Cases

Member's situation Sensible guidance

Encik Daud is 54 years and 10 months old and wants his whole PRS balance for a car Before 55 only sub-account B is available, and an 8% penalty applies. Waiting two months until retirement age lets him withdraw both sub-accounts with no penalty

Puan Ros, 40, needs money for her mother's treatment for an illness listed in the PRS Guidelines A healthcare withdrawal from sub-account B for an immediate family member is penalty-free , but it uses her once-a-year withdrawal allowance with that provider

Mr Ong, 35, already made a pre-retirement withdrawal from Provider P this year and now wants a housing withdrawal from P He has used P's allowance for this calendar year; he must wait until next year (or use sub-account B with a different provider he has been a member of for at least a year)

The Consultant should also remind members that withdrawing early reduces the money compounding for retirement, which is the purpose of PRS.

Who Authorises What

Withdrawal PPA prior authorisation?

Pre-retirement (including housing and healthcare) No
Post-retirement No (provider notifies the PPA afterwards)
After death Yes
Cooling-off refund Yes (PRS Guidelines paragraph 11.09)