KUALA LUMPUR (April 30): The Employees Provident Fund (EPF) has declared a restructuring of its members’ accounts, which will see the creation of a third account and a revised distribution formula for the monthly contributions.
EPF stated that the goal of the account restructuring for its members is to better secure their retirement income while taking care of their immediate life needs.
The primary goal of the account restructure, according to EPF chief executive officer Ahmad Zulqarnain Onn, is to provide members more decision-making authority to strike a balance between their short-, medium-, and long-term financial needs when it comes to their retirement.
“This initiative will also help increase members’ retirement funds so that they have sufficient retirement income to sustain their needs after retirement,” he stated.
The three accounts are Akaun Fleksibel, a new account that offers flexibility for immediate financial requirements; Akaun Sejahtera, which addresses life cycle needs that contribute to wellbeing throughout retirement; and Akaun Persaraan, which builds savings that will serve as income after retirement.
From May 11, all contributions will be divided into the following new accounts: 75 per cent will go into Akaun Persaraan, 15 per cent will go into Akaun Sejahtera, and 10 per cent will go into Akaun Fleksibel.
Akaun Persaraan and Akaun Sejahtera will continue to have the balances in Accounts 1 and 2, respectively, while Akaun Fleksibel will begin with a balance of zero.
Members will have a one-time opportunity to transfer a portion of their savings balance from their Akaun Sejahtera (formerly Account 2) as an initial amount to Akaun Fleksibel between May 12 and Aug 31, 2024.
If the member does not choose to opt-in for an initial amount, no transfer will be made and the existing balance will remain in Akaun Sejahtera.
New contributions to Akaun Fleksibel will begin on the implementation date and will be credited to the member’s account.
The balance in the member’s Akaun Sejahtera on the day the opt-in application is made determines how the initial amount, if any, is transferred to Akaun Fleksibel and other accounts (if applicable).
The breakdown indicates the transfer method as follows:
Balance of RM3,000 and above in Akaun Sejahtera:
The following transfers will take place:
- 10 out of 30 (10/30) of the balance in Akaun Sejahtera will be transferred to Akaun Flexibel.
- Five out of thirty (5/30) of the balance in Akaun Sejahtera will be transferred to Akaun Persaraan
- 15 out of 30 (15/30) will be kept in Akaun Sejahtera.
Balance of RM3,000 and below in Akaun Sejahtera:
The following transfers will take place:
- All balances under RM 1,000 from Akaun Sejahtera will be transferred to Akaun Fleksibel.
- For Akaun Sejahtera with savings of between RM1,000 and RM3,000, the amount transferred to the Akaun Fleksibel is RM1,000, while the balance will remain in the Akaun Sejahtera.
- No transfers will be made to Akaun Persaraan if the balance in Akaun Sejahtera is less than RM3,000.
With a minimum withdrawal requirement of RM50, savings in Akaun Fleksibel can be withdrawn at any time.
Withdrawal requests from Akaun Fleksibel can be submitted electronically via KWSP i-Akaun or in person at any EPF branch around the country. It is recommended that members register with KWSP i-Akaun as soon as possible in order to facilitate withdrawal transactions from Akaun Fleksibel.
“This initiative is not just EPF’s response to current needs, but is a proactive step to help members facing the changing job landscape and demographics of the population as well as the life cycle needs of EPF members,” said Ahmad Zulqarnain.
With these improvements, the EPF hopes to make sure that every member can handle their money in this dynamic and demanding climate with resilience and confidence.
Get more information on the EPF Account Restructuring Initiative at https://www.kwsp.gov.my/account-restructuring or by downloading the KWSP i-Akaun mobile app.