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 Private Retirement Scheme Started?

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kochin
post Dec 6 2012, 08:25 PM

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Lyners, pls help urgently.
I intend to invest in this prs scheme.
So far i think only ing, cimb, hwang and public have launched prs scheme.
Am doing a comparison and so far these are what i manage to find out.
Public;
3% entry cost. If taking growth fund, there is a 1.6% management and admin fees yearly.
Transfer fee to other prs operators at rm25
Hwang;
No entry cost. Exit cost unknown. Management and admin fees unknown but someone told me it is 2.5% yearly. Transfer fee to other prs operator at rm50.

Ppa charges is the same for all funds. Rm8 for every year if there is deposit. Exempted for entry year and year where account is not active.

Not sure about ing and cimb.
Pls advise as i intend to buy asap.
Thanks.
kochin
post Dec 6 2012, 08:47 PM

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QUOTE(echoesian @ Dec 6 2012, 08:40 PM)
I just opened a PRS account with Hwang yesterday with a pretty nice young lady CRM. For HwangIM, there is no sales charge, trustee fee is 0.04%, management fee is up to 1.8%, switching is 0%. Those charges by PPA is same for all the providers.
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Pretty nice young lady crm???
Trustee fee for public is the same at 0.04%.
Is hwang's 1.8% for the growth fund or moderate or conservative. Public have different rates for different fund. Their most expensive is growth at 1.5%.
Are you sure hwang does not have exit fees?
kochin
post Dec 6 2012, 10:22 PM

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ok, i got the breakdown liao.
taking growth fund as an example.

hwang is charging 0 entry fees, 0 exit fees, management fees of 1.8% + trustee fees of 0.4%; PPA is taking another 0.4% as management fees; transfer fees at rm50 per transaction to other providers

PB is charging 3% upfront fees (entry fees), 0 exit fees, management fees of 1.5%, trustee fees of 0.6%; PPA is taking another 0.4% as management fees; transfer fees at rm25 per transaction to other providers

so basically it boils down to fund performance as the difference is quite minor.
any advice on which of these perform better historically?

fyi, cimb is at management fees of 1.4% + trustee fees of 0.4%. transfer at rm75.

cheers!
kochin
post Dec 7 2012, 12:06 AM

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QUOTE(felixwang @ Dec 6 2012, 11:10 PM)
Happy Investing!
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but i got it from public mutual website wor:
http://www.publicmutual.com.my/LinkClick.a...os%3d&tabid=496

pls advise. thanks.
kochin
post Dec 8 2012, 09:40 PM

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QUOTE(xuzen @ Dec 8 2012, 01:21 PM)
Funny enough, the people who are very interested in this PRS scheme tend to be people who are at the highest tax bracket.

Those at the say 3% tax bracket tend not to be so interested in this PRS thingy.

I have an epiphany:

Since some PRS provider are giving zero upfront charges and all else being equal, guess my money will go into PRS vis-a-vis traditional cash investment into UT.

Bye bye Pub-Mut; hello HwangDBS.

I am happy this PRS happened, maybe it will kick-start the beginning of zero upfront era for the industry.

Yeah, Pub-Mut the lumbering and slumbering giant will probably awaken by this and start to give better return to its investors. Zero upfront fee would be a good start.

Xuzen
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boss, even though i agree hwang in all essence is the cheaper entry and seems to be the best among all prs fund currently in terms of entry cost, i think i would still go for pb.
reasons:
1. performance of the fund is more important. the differences is very minimal. although i hate that pb charges 3% entry cost. just hope that pb is gonna recoup this charges over the years. let's not forget their yearly maintenance fees is lower than hwangs. and hwangs have a huge disclaimer that they reserve right to change their fees structure. imagine they impose exit cost later, you would be paying exit fees and future values. and those who invest in prs is definitely going for long term.
2. there's cumulative benefits with pb. hopefully this constitute as part of their calculation towards qualifying for gold status. smile.gif free insurances, free will writing, lower cost for fund management/switching

and btw yes, this prs biggest attraction is for the tax relief. 26% for the highest income bracket. even if the fund does not give positive return, we would have gotten the gain upfront equivalent to our tax relief lor.

so any syt agent wanna service me? kekeke.
kochin
post Dec 10 2012, 11:26 AM

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QUOTE(netcrawler @ Dec 10 2012, 10:24 AM)
The income tax relief for PRS start from this year or next year? I ask my unit trust agents and all of them haven't got a license to sell PRS. It's difficult to find one as at now.
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just call them and i'm sure they will send someone to service you lor.

but can we request for specific requirements of the agents? kekeke. wub.gif
kochin
post Dec 10 2012, 01:29 PM

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QUOTE(cybermaster98 @ Dec 10 2012, 12:50 PM)
If the fund doesnt give you a positive return, you will be facing big losses overall la. That income tax relief is only worth max RM780 per year for the highest tax bracket. Whats so great about RM780 per year? Thats equivalent to a tax saving of RM 65 per month. How many ppl are in that tax bracket anyway? U gotta be earning more than RM8,300 per month to 'qualify'.

So in short, if your fund loses money then dont dream about having that small tax relief cover your losses. Dont forget that the main purpose of the PRS scheme is for ppl to pump money into our country's financial system. Thats the only way to stay afloat in times of crisis. So basically, the rakyat is helping with a bailout of our financial system. Although not at critical level yet but if both Europe and US remain in recession for 2013, then the domino effect will hit Malaysia.

So dont just blindly invest in any PRS fund. Learn about the fund and its potential before committing. And dont ever be satisfied with a RM65 monthly savings.
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boss, a bit far fetch, no?

let's break it down to simple layman approach, shall we?
The myth
1. IF the fund breaks even or increase, then no problem
2. IF the fund losses overall, what are the chances of it loses more than 20+% every freaking year?

although i know where you are coming from but for me personally, my views are:
The fact
1. IF we don't invest in this scheme, the gomen CONFIRM taxing me at the scheduled %
2. IF i invest in this scheme, i would have CONFIRM save my scheduled % tax rates

so in total:
1. i have a fact that i would 'safe' certain percentage;
2. a possible scenario of gaining further or losing more than my investment.

we are talking the best use of my rm3k to make my $$ work harder for me mah. i do agree i might have better use for my money overall but specifically for 3k, i am 'hoping' i might gain from this lor. no right or wrong, it is a matter of choice nia.

btw, if i assume a salaried worker at RM7150 per month + 2 months bonus, he/she would be in the 26% tax bracket too (without tax relief).
another scenario; the person earns rm6300 per month + 2 months bonus + he is getting rm1k per month from his rental of property (or other side income equivalent), also hit RM100k per annum.
let's not forget;
for taxable income >50k, already 19%
>70k, already 24%

that seems like an awful lot to me leh even at 19%.
kochin
post Dec 11 2012, 11:58 PM

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hwang's growth funds have increased by about 1.1% since commencement of trading from late november.
annualised already >10% p.a.
kochin
post Dec 19 2012, 02:59 PM

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have yet to get an agent from PM. cry.gif
a buddy of mine whom i have interest to buy from have not obtained his 'license' to sell PRS yet.

when is the last date for submission to qualify for the tax relief?

any sweet young and smoking hot female agent that can assist poor old me? brows.gif
kochin
post Dec 19 2012, 03:30 PM

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QUOTE(poolcarpet @ Dec 19 2012, 03:18 PM)
smoking hot female agent will shakehead.gif when you tell her you want to invest only RM3000...
*
will invest rm3k in prs, and invest other sum in other funds.
smile.gif

Added on December 19, 2012, 3:42 pm
QUOTE(xuzen @ Dec 19 2012, 03:15 PM)
Yoda says, "Emo is bad for investment.

Make bad decision one will, when smoking hot female agent assist, yes?"

Xuzen
*
yoda gives excellent advise. smile.gif rclxms.gif


This post has been edited by kochin: Dec 19 2012, 03:42 PM
kochin
post Dec 20 2012, 01:45 PM

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turbopips and poolcarpet boss,
assuming all else being equal, please review my spreadsheet as attached.
This is based on the following assumption:
1. Yearly investment of RM3k for 10 years (align with current tax relief break as announced recently).
2. Assume no change in fees imposed by PM and Hwang (Initial cost for PM at 3%, management fees of PM - 1.6% and Hwang - 1.88%)
3. Assume same growth for both funds at 5% yearly

From my spreadsheet you would be able to see the breakeven for all things being equal, Hwang holds the advantage for the first 15 years wherelse PM holds the advantage for longer term.
Please also note that from Year 9 onwards, Hwang's management fees would be higher than PM's initial cost price of RM90 per annum.
Again the differences is quite marginal and all boils back down to performance of the fund ultimately.

Please feel free to correct if there is any flaws in my analysis.

Thank you. notworthy.gif

This post has been edited by kochin: Dec 20 2012, 01:48 PM


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kochin
post Dec 20 2012, 01:51 PM

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QUOTE(turbopips @ Dec 20 2012, 01:43 PM)
PM:
Yr 1 sales charge - RM90
Annual management/trustee/ppa fee (1.60% of RM2910 cause RM90 reduced under sales charge) - RM46.56
Total management/trustee/ppa fee over 15 yrs - RM698.40
Total sales charge over 15 years = RM90 *15 = RM1350
Hwang:
Yr 1 sales charge - RM0
Annual management/trustee/ppa fee (1.88%) - RM56.40
Total management/trustee/ppa fee over 15 yrs - RM846
Total sales charge over 15 years = RM0 *15 = RM0
U for forgot about sales charge RM90 to be paid every year assuming u invest RM3k every yr.
*
note: i charge the 1.6% at the end of the year AFTER the growth factor. logically the providers should only charge these after 1 year's worth of management, right? and again logically they should charge at year end rather than beginning of the year. hence my figure of RM48.89 rather than your RM46.56.
kochin
post Dec 20 2012, 02:06 PM

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QUOTE(turbopips @ Dec 20 2012, 01:56 PM)
Thanks Ko Chin for the sharing.. Very expert in Excel ah...  I agree that it boild down to performance of fund ultimately.
Just curious to know, in the event the government decide to extend the tax relief up to 15 or 20 years (ie the RM3k investment continues) will PM still have a lower cost? Thanks
*
i did my spreadsheet immediately after reading your post but i did not saved the file. doh.gif
can redo quite easily. cool2.gif

and i did plunked in the figure for extended years beyond the initial 10 years.
PM still come out tops in the long run. but again marginal.

so it still boils down to the fund as even 0.5%-1% of the fund growth differences would ultimately be the game changer here.
kochin
post Dec 20 2012, 02:28 PM

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sob.... lyn does not have syt smoking hot female PRS agents.....
no one contacted me??? kekeke.
kochin
post Dec 20 2012, 03:44 PM

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let's just all agree on the following, shall we?
1. if all things being equal, hwang beats PM in the short term while PM wins in the long term
2. everything else doesn't matter as spreadsheet have proven that the differences is MARGINAL and ultimately it is the fund performances that matter.

good discussion you all. met some new friends here. cheers!

Added on December 20, 2012, 3:47 pm
QUOTE(bkwu @ Dec 20 2012, 02:51 PM)
I just did a comparison based on the sales charge & annual management fees, assuming contribution of RM3000 per annum, annual return = 8% for all providers.

Abang kochin, Im not hot chick but can offer you PRS for hwang, cimb & manulife if you want.
*
1stly, you are not a syt
2ndly, you do not offer PM which i'm keen to take

so sorry abang bkwu, both product and wow factor also does not fulfill. my $$ cannot go to you. cry.gif

This post has been edited by kochin: Dec 20 2012, 03:47 PM
kochin
post Dec 20 2012, 04:50 PM

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i just thought of an idea.
why not split our investment?
half to PM, half to Hwang.
that way, there's no mistake on which fund would ultimately performs better. kekeke.
kochin
post Dec 21 2012, 02:41 PM

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QUOTE(wbk @ Dec 21 2012, 02:30 PM)
I am waiting for the CIMB agent to clarify before i give my money to her.
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