Choice of Fund Options
You may choose to contribute to one (1) or more PRS Provider. Under each PRS Provider, you can further choose to invest into one (1) or more funds by either contributing based on the default option (age-based selection) or select a fund based on your preferred choice.
Default Option* for Core Funds: Age Based Selection
One of the special features of the PRS is that it makes investing your savings for retirement easy with its default option of core funds. PRS default option for core funds offer a packaged mix of underlying asset classes that provides growth, moderate and conservative risk and returns based on evolving life stages towards retirement.
Each PRS Provider must offer three (3) core funds as a default option in their PRS. If you choose the default option you will be allocated to the following core funds based on your age grouping:
When you select the default option, all contributions made by you, or by your employer on your behalf, will be allocated into the core fund which corresponds with your age group.
Default Option* for Core Funds: Auto Glide Path
Default option funds offer an automatic glide path in managing your funds towards retirement. The auto glide path is a unique feature of the default option funds where the PRS fund manager automatically switches your funds from a higher risk growth asset allocation to a more conservative lower risk asset allocation as capital preservation should take priority as you approach your retirement. This auto glide path makes it easy for you to manage your risk exposures over time based on a defined age grouping within each default option funds.
Switch – In Date
When you are on the auto glide path, your PRS Provider will notify you one month before your savings in PRS is slated to be switched into a moderate or conservative fund. The Switch-In Date is the day a PRS Member turns 45 or 55 years old.
Unless you have instructed otherwise, the switching process will be executed by your PRS Provider over a five-year period, where each year an equal proportion of your total PRS balance, in units form, will be redeemed and used to purchase units in the next core fund.
Redemption of equal proportion over a five-year period is set out in the following scenario:
If a PRS Member currently has 200,000 units in a Growth fund under the default option, the scenario below illustrates the movement of units progressively from the Growth fund to a Moderate fund once the member attains the age of 45.
At the end of the five-year period, the member’s savings will be fully switched to the Moderate fund.
| Year | Number of units in Growth fund | Number of units redeemed by Member before the next anniversary | Number of units redeemed by PRS Provider on the anniversary date to be invested in Moderate fund | Balance number of units left in Growth fund |
|---|---|---|---|---|
| 1st year (Switch-in Date) | 200,000 | None | -40,000 (200,000/5)* | 160,000 |
| 2nd year (1st Anniversary) | 160,000 | None | -40,000 (160,000/4)* | 120,000 |
| 3rd year (2nd Anniversary) | 120,000 | -30,000 | -30,000 (90,000/3)* | 60,000 |
| 4th year (3rd Anniversary) | 60,000 | -20,000 | -20,000 (40,000/2)* | 20,000 |
| 5th year (4th Anniversary) | 20,000 | None | -20,000 (40,000/1)* | 0 |
*Switching of equal proportion based on the balance number of units left in Growth fund and after member’s own redemption, if any.
Default Option* : Principal Asset Management Berhad has embarked on different default option schemes. please refer, here for more information.
Note: The default option was updated by Securities Commission Malaysia on Feb 2020 and PRS Providers will implement these changes within one year. Please check with your respective PRS Providers for how this will affect your PRS account.
Alternatively, if you prefer to choose your own funds (self-selected option), you may choose any of the non-core PRS funds, which will require you to be actively involved in selecting funds based on your risk and return expectations. However, this will often require you to seek advice from a licensed PRS Consultant.