RETIREMENT can be a very daunting thought especially when you are working on your own and have no regular income to fund your old age. For that reason, the ‘1Malaysia Retirement Savings Scheme’ was initiated by the government to enable Malaysians without fixed income to save for their post-working years.
Implemented on January 3 2010, the scheme is intended to encourage the self-employed and those without fixed income to contribute voluntarily towards this retirement fund according to their affordability.
Who is eligible to apply for the 1Malaysia Retirement Savings Scheme?
If you are a Malaysian, self-employed and have no fixed income, you are eligible to apply for this scheme.
You also need to register as an EPF member. However, an EPF member who is currently an employee is not eligible for this scheme.
Who are the ‘self-employed’ and ‘individuals without fixed incomes’ this scheme refers to?
They include farmers, taxi drivers, fishermen, hawkers, freelancers, actors, musicians and small business owners.
So how do I participate in this scheme?
If you meet all the conditions set, you can participate in the scheme by filling up the 1Malaysia Retirement Savings Scheme’ application form (KWSP 16G (1M)), which can be obtained at any EPF branches or downloaded from myEPF website (www.kwsp.gov.my), and submitting it directly to any EPF branches. Alternatively, you can mail it to the EPF.
If you are not yet an EPF member, you need to register with the EPF first by completing a KWSP 3 Form and submitting it together with a copy of your myKad at any EPF branches.
How much do I need to pay every month?
Members can contribute as little as RM50 a month and effective 1 January 2011, there is no limit to the maximum amount of contribution.
The nature of my business is erratic and I may not be able to contribute every month. What happens in this case?
As this is a voluntary scheme, you are not required to contribute savings on a monthly basis. However, you are encouraged to regularly contribute a sum of money, however small, to ensure that a tidy sum can be accumulated as savings for your retirement.
Where can I make my contribution payments?
Contribution payments can be made via cash or cheque using KWSP 6A(2) Payment Form at any EPF Payment Counters nationwide.
Will savings under this scheme receive annual EPF dividends?
Yes. Savings under this scheme will receive annual dividends according to the rate declared by the EPF for the year to help you accumulate your retirement savings.
What is the additional contribution from the Government?
Savings under this scheme will receive a 5 per cent contribution from the Government subject to a maximum of RM60 per year till 2014.
Can members’ savings from this scheme be withdrawn?
Yes. The 1Malaysia Retirement Savings Scheme is part of EPF members’ savings and therefore members may withdraw their savings according to present EPF withdrawals procedures and conditions.