Therefore, the Private Retirement Scheme (PRS), a voluntary long term saving scheme designed to help Malaysians to accumulate additional savings for their retirement as well as supplement their mandatory KWSP savings, was introduced in Year 2012. KWSP is a mandatory pension saving scheme while the PRS is a voluntary private pension saving scheme.
In Budget 2014, one-off incentive of RM 500 will be given to youth aged 20 to 30 years old who contribute a minimum RM 1000 to a single PRS fund within a calendar year. It is the government's initiative to inculcate the importance of saving from an early age to ensure sufficient savings after retirement.
To encourage youth to undertake long-term savings for retirement through the PRS, government contribution of RM 500 per qualified person will be used to purchase units of PRS funds in the PRS account of youths. This incentive will be made available for a period of 5 years from 2014 to 2018.