Your Guide To PRS Malaysia And PRS Withdrawal For Homes

You can withdraw from your PRS Malaysia account once per calendar year for one of three reasons: Withdrawal for purchase of house, building a house, or to reduce/redeem housing loan.

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Everybody looks forward to retiring one day, which is why smart retirement planning should start as soon as possible. Malaysia’s Private Retirement Scheme (PRS) is an important part of that planning for many. 

So what exactly is PRS? PRS is a voluntary long-term savings and investment scheme, operated by the Private Pension Administrator Malaysia (PPA).

It's designed to provide an accessible retirement scheme which helps individuals save towards their own retirement needs.

That dream of retiring to a beautiful seaside condo and fishing your way through the long golden days of retirement is in your hands!

The PPA provides oversight and central administration for these schemes, ensuring a structured and secure savings environment for your lifelong savings.

The schemes are regulated by the Securities Commission Malaysia. That means you’re handing over your money to trusted and regulated funds, and not some shady company that runs off to spend your hard-earned cash.

There are a range of PRS funds in Malaysia, delivered by eight accredited PRS providers, offering retirement opportunities for both employed and self-employed workers.

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The different funds present a range of options for savers, taking into account your particular saving needs, goals, and risk profiles. Individuals can contribute to one or more PRS providers.

PRS also comes with an incentive in the form of PRS tax relief of up to RM3,000 per year.


What You Need To Know About PRS Withdrawal

PRS is designed to provide funds to see you through retirement, but there are a number of other circumstances in which a PRS withdrawal can be made:

  • After the day the member reaches his/her retirement age (or at any other age as the Securities Commission may specify from time to time), withdrawals may be made in part or in full.
  • Following the death of a member, only full withdrawals may be made.
  • Prior to the member reaching the retirement age, withdrawals from sub-account B may be made in part or in full.
  • Permanent departure of a member from Malaysia, only full withdrawals may be made.
  • For healthcare purposes.
  • For housing purposes.
  • Special circumstances (see Covid-19 update below).

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It’s important to understand that PRS funds maintain savings across two separate accounts: sub-account A, and sub-account B.

Sub-account A

70% of funds

At retirement age


Sub-account B

30% of funds

Once per year

8% (under normal circumstances)

Pre-retirement withdrawals can only be made from sub-account B as part of your Private Retirement Scheme. Fees and charges may vary depending on your specific PRS provider, but come in three categories:

  • Sales charge to pay for marketing and servicing
  • Annual management fee to fund investment management services
  • Transaction fees such as withdrawal fee, account switching fee, and redemption charge

Withdrawals prior to the designated retirement age of 55 may come with tax implications, and you should always check with a financial professional if you're unsure how this might impact you.

Withdrawals over the age of 55 are considered as withdrawals at retirement age, regardless of your current working circumstances, and come with no tax penalty.

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How To Withdraw From PRS For Housing Purposes

Any individual with more than RM500 saved in their sub-account B is eligible for a withdrawal related to housing.

These withdrawals are exempted from the usual 8% tax penalty for PRS withdrawal. A housing withdrawal can be made once per calendar year for one of three reasons:

  1. Withdrawal for purchase of house
  2. Withdrawal for building a house
  3. Withdrawal to reduce/redeem housing loan

An application to withdraw funds for housing purposes can be made with the PRS provider, using the following documents:

  1. PRS Housing Withdrawal Form – Buy or Build House 
  2. PRS Housing Withdrawal Form – Reduce or Redeem Housing Loan 
  3. Supported by the Guide to Complete Form for Housing Withdrawal 

Funds withdrawn for a housing loan should be credited into the noted bank account within 10 working days.

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Additional Documentation Required For Withdrawal

  • Proof of purchase
  • Proof of financing
  • Proof of payment (for self-financing)
  • Proof of financing
  • Proof of ownership
  • Proof of construction
  • Proof of payment (for self-financing)
  • Proof of approval showing that it is under municipal council’s jurisdiction
  • Housing loan balance statement

You don't need to be the sole purchaser or signatory for a housing purchase/loan in order to be eligible for a PRS withdrawal for home loan. A co-borrower/co-purchaser is also eligible for tax-free withdrawal of funds.


The Case Of Covid-19 And PRS

In response to the economic challenges of the Covid-19 pandemic, the Malaysian Government released its Prihatin Rakyat Economic Stimulus Package.

As part of this economic package, the Government will allow individuals with a PRS scheme to withdraw a maximum of RM1,500 from sub-account B with no tax penalty, for the 9 months following April 2020.

Members can withdraw RM1,500 from one or more funds, to a maximum of RM1,500 per provider. Any withdrawal over RM1,500 will be subject to the standard 8% tax penalty.

There's no requirement to state the reason for your pre-retirement withdrawal under this temporary relief measure.

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Withdrawal For Healthcare Purposes

The government’s Covid-19 announcement also reflects a recognition of rising healthcare costs, and the potential need to support citizens and their families during this difficult time. 

Withdrawal for healthcare purposes is an established part of the PRS scheme, and covers the needs of both the individual, and immediate family members.

It allows withdrawal for circumstances related to 91 types of illness, as well as the cost of medical equipment and medication for approved illnesses. 

You can apply for a healthcare withdrawal using the PRS Withdrawal Form for Healthcare and the Guide to Complete Form for Healthcare Withdrawal.

Withdrawal for healthcare reasons may be undertaken once per calendar year, and is also exempt from the 8% tax penalty.



1) How much should I save in my pension?

The PPA suggests that you set aside one-third of your monthly salary towards retirement.

Most private employees in Malaysia will be enrolled in the mandatory Employee’s Provident Fund (EPF), where individuals save 11% of their monthly salary, and employers top up with an additional 12%.

That leaves a potential minimum of approximately 10% that you should consider investing in a PRS fund.

2) Is there any way to work out how much I should save?

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If you’re not sure how much to save given your personal circumstances, you can try out the pension calculator from PPA.

Retirement saving is an important consideration, so speak to a financial professional if you’re not sure what’s best for you.

3) Is my money protected from creditors?

Yes, your PRS is protected as an asset from creditors, in cases of bankruptcy.

You may still continue to contribute to your PRS if you have been declared bankrupt, but any withdrawals you make may be subject to conditions from the Director General of Insolvency (DGI).

4) How do I know if my application for home loan withdrawal is approved?

You may contact your respective PRS provider(s). Alternatively, you can also call PPA on 1300-131-772 to discuss.

5) How long does it take to receive funds?

Funds should be made available within 10 days of a successful application being submitted. 

6) Can I withdraw from more than one PRS fund in any given year?

Yes, you may withdraw from all PRS providers and funds which you have an account with. You may only undertake one pre-retirement withdrawal per provider, per year. 

7) Do I have to be over 18 to apply for a PRS?

Yes, you can only apply for the Private Retirement Scheme once you have reached 18 years of age.

8) Is there a minimum contribution to a PRS fund?

Yes, although this amount varies by provider. There is no fixed maximum amount, or prescribed frequency for your payments.

9) Where can I find out more about PRS?

Discover more at the PPA website, or explore these in-depth PRS FAQs.


Want to find out more about property and finances? It’s time to check out our range of Home Financing Guides!

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