About Private Retirement Scheme (PRS) and its funds performance at end of April 2016

Launched in 2012, the Private Retirement Scheme (PRS) is a voluntary (non-compulsory) retirement scheme in Malaysia for employees and also self employed to have another option of forced saving for their retirement.

In order to encourage savings under PRS, Malaysian government granted personal income tax relief of up to RM3,000 for individuals tax payers from their PRS savings amount deposited during the taxation year. 

Employers are also provided with tax deduction on contributions to the PRS on behalf of their employees above the statutory rate of 19%.

Note that this income tax relief for PRS is available for 10 years only, from tax assessment year 2012 until 2021.

Also note that the sales and admin charges deducted from your PRS contribution is not eligible for tax relief, you can only claim the amount from your net PRS contribution done within the year, up to RM3,000 per year.

Your PRS contributions will be deposited into your Private Pension Administrator (PPA) account, after your PRS fund provider deducted the sales and admin charges.

Your money in your PPA account is split into 2 sub-accounts (a bit similar to your EPF account). Once your money is parked in your PPA account, you can forget about it until you finally retire, because:

• 70% of your fund is parked in Sub-account A, which cannot be withdrawn until you retired.
• 30% of your fund is parked in Sub-account B, which you can only withdrawn once a year, and subject to an 8% tax penalty on the withdrawal amount.

Your money in PPA account is then allocated for investment by your fund manager with your selected fund scheme, which could be of category of growth, moderate or conservative.

There is no guarantee that your PRS fund will give you return. In fact, you can also lose money if your fund is not performing!

How is the performance of the available PRS funds so far?

Morningstar is tracking the PRS funds performance (there are 79 of them as at 30 April 2016) on a day-to-day basis.

As of today (30 April 2016), only 19 or 24% out of the total 79 PRS funds have made a positive year to date return. AmPRS - Asia Pacific REITs is the champion with 4.79% return YTD.

Those 19 PRS funds that have positive return year to date, and their YTD return are as below:

(Screen captured from Morningstar's PRS fund performance tracking website, double click on image to enlarge)

The worst PRS fund performer YTD, CIMB Islamic PRS Plus Asia Pacific Ex Japan Equity fund, has caused a 8.92% lost in 4 months time.

Anyhow, YTD return is for monitoring of latest return performance of the funds. If you see your fund continuously not performance well over a couple of months, you should consider switching over to another fund that is performing well over the same period of time.

Now, let's look at their full year return in 2015. There are a total of 75 PRS funds active in year 2015, and 74 of them had brought positive return, only 1 has lost money.

The champion in 2015 is AmPRS - Islamic Equity Fund with a return of 16.3%. The top 10 PRS funds in 2015 are:

And the bottom 10 PRS funds in 2015 are:

So, does it worth to lock down your money in PRS, and put it in the hand of your PRS fund managers to bring return or lost to you? You decide.

U Mobile attacked competitors again with free video streaming on top of existing data quota

If you have a smartphone or tablet attached with U Mobile postpaid and prepaid service, and you have been using it to watch online videos, here is a good news to you.

U Mobile has just launched their Video-Onz service, providing free additional quota on top of existing data plan for you to watch videos using the apps from the following 12 providers:

• YouTube
• YouTube Gaming
• Youku Tudou
• iflix
• Astro on the Go
• HyppTV Everywhere
• Viu
• Eros Now
• tonton
• Herotalkies
• ONFM
• Pocketimes

This mean that when you are watching videos with these apps, you are given additional quota on top of your existing Internet data quota for the video streaming, for free by U Mobile under the Video-Onz service.

The monthly allocation of the free Video-Onz video streaming quota on top of the existing Internet data quota of various U Mobile postpaid and prepaid plans is as below:

There is no Video-Onz quota imposed for P70, i90 and i130 postpaid plans, meanings you can watch videos or movies with the above 12 video streaming apps as much as you wish, as there is unlimited Video-Onz data for these plans. 

Nowadays U Mobile marketing is really aggressive in capturing the market share by providing competitive package that really can shake and disrupt its competitors, which is a good news for all mobile consumers in Malaysia.

Let's see what will Celcom and Digi offer to counter attack this. Maxis? Maybe their customers need to cry and scream and swear for another time again for them to finally react.

Meanwhile, the P1 (now known as Webe) under TM has been making a lot of hoo-haa recently, but until today the general public is still unclear about what they are going to offer to join this intensified competition.

Earth Day and the story of bottled water

We've just celebrated our Earth Day on 22nd April. This event has once again brought some world attention to the story of bottled water, with a video produced back in 2010.

Here is the video, which has been viewed over 4.7 millions time in YouTube:

So, what's wrong with the bottled water? It is a multi-billion business, sold 290 billion liters in 2014 and expected to continue growing at a CAGR of around 8.5% between 2015 and 2020.

Well, we are told that about half of the bottled water is sourced from tap water, and priced a few hundreds time the price of tap water. It is expensive, sometimes even more expensive than petrol.

Another half is sourced from underground or spring water. What will be the impact to the environment when millions of gallons of water is extracted away 24x7 everyday? Will it change the soil moisture, deplete the wetlands and narrow out the rivers? Will it in turn affect the surrounding ecology, and the aquaculture and agriculture condition?

Anyhow, the main issue is more on the plastic bottle itself than the water contained in it. In order to manufacture the plastic bottle, millions barrels of fossil fuel is consumed, and another millions tonnes of carbon dioxide is generated.

Each year, more than 4 billion pounds of PET plastic bottles end up in landfills or as roadside litter, or worse still, floating in the sea endangering the birds, fishes and other ocean animals. Only less than 20% of plastic the water bottles are actually recycled.
In the United States of America, selling of bottled water is banned in more and more schools and colleges, and even parks.

Therefore, to save our earth and its environment, we should only drink bottled water when necessary, and not to substitute our daily drinking water with it. We should resume our traditional way of drinking filtered or boiled tap water, and use reusable water container to carry some water with us for outdoor drinking.