Pub-Mut PRS is a seperate entity, it does not count towards the Gold Status. So, no free insurance & free will writing for you.

Xuzen

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Added on December 10, 2012, 4:21 pmWhy so kia-si (scare to die?)

It is only after all RM 3K p.a. and that is 3% exposure in total of your annual income (assuming the income is RM 100K p.a.).

Furthermore, even the aggresive fund is invested in 70% equities and 30% fixed income. 70% equities = RM 2,100.00 into equities = Value at risk of 2.1% in total only. Therefore no need to be so kia-si.

Try seeing the bigger picture and do not be so myopic.

Xuzen



This post has been edited by xuzen: Dec 10 2012, 04:21 PM

It is a shame the PRS doesnt count in mutual gold status... It is similiar to UT EPF investment, they should make it the same to gain mutual gold status. Just my thought..

its a beginning only, who knows in the future, entitle pulak.

The bigger picture would be RM3,000 (min) per annum x say 10 years which adds up to min 30K. Imagine if losses are big and ppl just rush into that just to get a RM 780 per annum 'discount' on tax. We're not just talking about not making a profit or cutting even, but actually losing.

Im not kiasi and neither am i against investments. I have heavy investments in properties, gold and also unit trusts. All im saying is that ppl (especially those who dont have much to spare) shouldnt blindly rush into PRS schemes without considering the risks.

This post has been edited by cybermaster98: Dec 10 2012, 05:32 PM

I think there’s enough explanations in all the previous postings on the role of tax relief in PRS, so I need not elaborate more on the taxes, coz ultimately everyone has their logical thinking behind.

There’s no right/wrong. But for the high tax bracket person who does not agree with your statement above although he has the additional RM3k to spare, I think there could be 3 scenarios:
1. He is a bloodly good investor, and consistently make >26% returns on their investments every year. So PRS is an added risk for them
2. He is very risk averse.
3. He has enough exposure on equities

For me, even if the year is badly hit and the PRS fund manager loses >20%, I don’t think I am that good to use the RM3k to make any profits for myself in any risk investments for that year (besides FD).
And also RM3k/yr is but another diversification in portfolio to me as it will be the first UT that I am buying. 

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Added on December 10, 2012, 5:43 pmThanks for putting things into another perspective for us. Which makes me recollect what my Public mutual fund salesperson says that they (PRS fund providers) r not very keen and it’s the government that mandate certain bank/company to setup this PRS. I am not sure why but maybe fund too small? And it could be WIN-WIN situation more for both rakyat and government? My biggest worry is that the funds are not putting their top notch fund managers to manage this PRS.

Also the fund size may not be big as I think majority of the contributor will be non-bumi, higher tax bracket earners due to lesser avenue for them for bigger tax deduction. And their small RM3k contributions will be spread out in the 8 PRS providers.

This post has been edited by turbopips: Dec 10 2012, 06:00 PM

You're a high income earner == High IQ

The sentences below will deem suffice for you :

HWANG PRS CONSERVATIVE FUND
To provide Members with a Fund that preserves* capital for their retirement needs.

*The Fund is not a capital guaranteed nor a capital protected fund.

If you are already into unit trust why so worried about PRS. Same as unit trust except Account 1 & Account 2 policy only. In fact currently for Hwang & Public Mutual , their PRS are feeder funds to their existing Unit Trusts Funds. Don't know about CIMB or Manulife. Further more you can switch PRS funds if the one you select today is none performing.

Dont the 2 statements actually contradict each other? How could they claim to 'preserve' capital for the retirement needs of investors and then say its not 'capital guaranteed'? We all know the PRS scheme is not capital guaranteed.

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Added on December 11, 2012, 8:29 amWho's worried? Im discussing the merits of the PRS.

If its worth my while, i might consider investing in it. Not just for the RM780 discount but for future growth and to diversify my investments.

This post has been edited by cybermaster98: Dec 11 2012, 08:29 AM

Hi all, anyone actually invested into this PRS? I'm aware of some info on this, and agree with others that one of the reasons for going into this is to reduce the taxable income, and save up to rm780 per year.

I'm considering going for the growth or conservative fund, but for eg public mutual, i can't find further details on how they are going to invest except for the percentage in equity. To those who have invested, which one did you go for? Hwang? Pb? Anyone tried investing in this via fundsupermart?

Also, let's say i invest into conservative fund, and let's assume after first 2 yrs it's losing money say 5% pa, can we 'sell' the fund and just leave the proceeds in ppa/epf account getting the standard epf dividen? ii understand there is a 70/30 distribution where we can't touch the 70% until retirement, so let's say out of rm30k invested, rm21k cannot be touched but can we sell or are we locked in forever into this prs?? Any ideas?

This post has been edited by poolcarpet: Dec 11 2012, 05:04 PM

If I'm not wrong, you can withdraw all the money with 8% penalty.

I think can only withdraw the account 2 portion which is 30% of total investment with 8% penalty

ok just called hwang to check my understanding. here's what i know.

lets say rm3k in per year, for 10 yrs. total is rm30k in. distribution of 70/30 so rm21k can't be touched till retirement withdrawal. the other rm9k can be taken out (either partial or full) but only once a year and subject to 8% tax.

and lets say i want to exit... well, its not possible to exit. can switch to conservative fund and just let it grow till retirement.

so the big con of this is once you put in your money, give it a big hug and say see you in xx years' time

the pro is of course the tax relief / immediate gain. based on hwang prs materials conservative fund is projected around 5% returns i think with growth fund max about 11%. think this is still better than epf returns but obviously there is a risk.

anyone else actually already jumped into this prs?

For Hwang, which feeder fund is it for the PRS growth fund?

im late joining this thread.

the discussion is getting heavier.

i will start my own PRS on january, god's willing.

If tax relief is not yr main reason of buying PRS. I suggest its better for u to continue invest in your unit trust/gold. Why?
1. U dont want yr investment to be tied down till the age of 55 years in PRS as the capital is not guaranteed.
2. Its historical performance is unknown yet unlike the normal unit trust u buy
3. U may want to wait to see the performance of the PRS fund managers against normal UT to see if there's signifcant.

The money is yours... so this is just suggestion.

This post has been edited by turbopips: Dec 11 2012, 09:16 PM

For the Hwang's Growth Fund, its not specifically stated but among the permitted investments are units/shares in collective investment schemes.

hwang's growth funds have increased by about 1.1% since commencement of trading from late november.
annualised already >10% p.a.

1. PRS vs. Unit trusts.
The income distributions (if any) in PRS are tax exempted.

2. PRS vs. EPF.
There are statements that both allow tax deductions on contributions by employer (up to 19%, combining both PRS and EPF, of the employee's salary). But silent on whether the employer's contribution into PRS is considered non-income to the employee, unlike EPF.

It is also best to keep in mind that it is possible to switch between providers as well as between funds within the same provider. There might be some switching or transfer fees, and in the case of Public Mutual zero fees within their PRS funds.

So it is cheaper than the normal unit trusts if we were to switch to better funds, within or out to another provider, and don't have to pay sales charges (if any) again.

Should check out the PPA.my site http://www.ppa.my/index.php/providers-and-...proved-schemes/ for more info...

(I see why PM agents may not be happy, sales charge for their PRS is 3% vs 5.5% for their equity unit trusts.)

I'm planning to go for hwangim growth. Any known issues or negative points?

If it's not doing well, can switch to another prs in the fiture just have to pay some $, i think rm25+25+sales charge for the other. 0% sales charge for hwangim too good to say no to

Yes, no sales charge is a big plus. All these funds are new, so can't say how they will perform compare to the normal unit trust funds, but they have an advantage since their income distributions is tax exempted; especially if the income is from within Malaysia - which most of the approved funds are.

But take note that funds which incomes from bonds are non taxable too. Aggressive funds with higher percentage in equities will have more advantage on this tax exemption on income distributions.

As for the tax relief, it is a plus factor, but I would not consider it a major factor in deciding between PRS and UT, since 3k savings in a year is not a lot when you're in a higher tax bracket and paying more than 10k in income tax.

The zero switching fees within same provider and possible to switch between providers is very attractive. Since this scheme is for retirement, the 'investment' could slowly increase to high figures in 10-15 years... this is when you would want to monitor the fund more closely and do some switching instead of allowing your money to slide down in a bearish downturn. No doubt all the funds will slide downwards, but the more conservative funds will slide lesser.