FAQ for Taking Early PRS Pre-Retirement Withdrawals Without Tax Penalty

As outlined in the government’s Economic Stimulus Package, between 30 April 2020 until 31 December 2020 PRS pre-retirement withdrawals of up to RM1,500 (from Sub-Account B) per PRS provider are exempted from the 8% tax penalty. 

We understand the need to support Malaysians during these challenging times. However, we want to caution our investors in using this pre-withdrawal option. As taking money out of your account during periods of market volatility can lead to loss of initial principal, as well as the opportunity for future growth and earnings. 

To help you further understand what this means to you, we’ve prepared answers to commonly asked questions.

- All PRS members below the age of 55 years old are eligible to apply for this withdrawal.
- There are no restrictions for members aged 55 years old and above to make withdrawals of any amount under any circumstances.
Members can submit applications during the exemption period from 30 April 2020 until 31 December 2020.
Members may request for withdrawal from one or more funds under Sub-account B managed by each PRS Provider (e.g. Principal) to a maximum amount of RM1,500 per Provider.
Payment will be made within 10 days after receiving all necessary paperwork.
Members may only withdraw once from each PRS Provider during this special temporary relief exemption period (30th April to 31st Dec 2020). However, for withdrawals above RM1,500 per PRS Provider, the balance amount will be subject to the 8% tax penalty.

- No, there is no requirement for Members to make any disclosure on the reasons for the pre-retirement withdrawal.
- While this temporary exemption from payment of the tax penalty is provided in the short run, members are encouraged in the long run to continue to save for their retirement.

Note: One of the prevailing terms and conditions for pre-retirement withdrawal from sub-account B is still applicable, whereby such withdrawals may only be made from a PRS fund one year after enrolment.

If you have any further enquiries, please contact Principal at prs.service@principal.com.my or call  03-7718 3000. Alternatively, you may contact the Private Pension Administrator Malaysia at askppa@ppa.my or call 1300-131-772.

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