KUALA LUMPUR: The Employee Provident Fund (EPF) today announced the EPF Account Restructuring Initiative, which will take effect on May 11, with the introduction of a Flexible Account for short-term financial needs.
EPF Chief Executive Officer, Encik Ahmad Zulqarnain Onn, in a statement, said the main focus of the initiative is to empower members in making decisions to balance future needs for retirement between short-, medium- and long-term financial needs.
“This initiative will also help increase members’ retirement savings so that they will have sufficient retirement income to sustain their needs after retirement,” he said.
Under the account restructuring initiative, all accounts of members under the age of 55 will be restructured from the previous two accounts, namely Account 1 and Account 2, to three accounts.
The three accounts will be known as Akaun Persaraan (Retirement Account) to accumulate savings that will serve as income during retirement; Akaun Sejahtera (Wellbeing Account) to address life cycle needs that contribute to wellbeing during retirement; and Akaun Fleksibel (Flexible Account), as a new account that provides flexibility for short-term financial needs with savings in the account can be withdrawn at any time according to the member’s needs with a minimum withdrawal of RM50.
Balances in Account 1 and Account 2 will remain in the Akaun Persaraan and Akaun Sejahtera respectively, while the Flexible Account will start with a zero balance.
All contributions after May 11, 2024, will be allocated into the three new accounts according to the following manners; 75 per cent into the Retirement Account, 15 per cent into the Wellbeing Account and 10 per cent into the Flexible Account.
According to EPF, between May 11 and Aug 31, 2024, members will have a one-time option to transfer part of the savings balance in their Akaun Sejahtera as an initial amount to Akaun Fleksibel. 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.
Akaun Fleksibel will start with new contributions that will be credited to the member’s account after the implementation date.
If the member chooses to opt-in for an initial amount, the transfer of the initial amount to Akaun Fleksibel and other accounts (if applicable) is based on the balance in the member’s Akaun Sejahtera on the date the opt-in application is made.
For balance in Akaun Sejahtera of RM3,000 and above, 10 out of 30 (10/30) of the balance will be transferred to Akaun Fleksibel; five out of 30 (5/30) of the balance will be transferred to Akaun Persaraan; and 15 out of 30 (15/30) will be retained in Akaun Sejahtera.
For the balance in Akaun Sejahtera below RM3,000, the transfers will be made as follows:
- Akaun Sejahtera with a balance of RM1,000 and below, all amounts will be transferred to Akaun Fleksibel.
- Akaun Sejahtera with a balance of more than RM1,000 and less than RM3,000, the amount transferred to Akaun Fleksibel is RM1,000, while the remainder is retained in Akaun Sejahtera.
- No distribution will be made to Akaun Persaraan for a savings balance below RM3,000.
The difference in this distribution method is to enable members with low savings balances to also have a meaningful initial amount in their Akaun Fleksibel.
Members can only choose to opt-in for the transfer of the initial amount to Akaun Fleksibel one (1) time starting from the effective date until Aug 31, 2024, after which the opt-in cannot be cancelled. Members who wish to take advantage of this opt-in can submit their application through the KWSP i-Akaun application or the Self-Service Terminals at any EPF branch nationwide.
Members can make withdrawals from Akaun Fleksibel at any time for any purpose, subject to a minimum withdrawal amount of RM50. Applications for withdrawals from Akaun Fleksibel can be made online through KWSP i-Akaun or at any EPF branch nationwide. Members who have yet to register with KWSP i-Akaun are encouraged to do so for withdrawal transactions from Akaun Fleksibel to be made.
Similar to the current practice, all savings in Akaun Persaraan, Akaun Sejahtera, and Akaun Fleksibel of members who have reached age 55 will be merged into Akaun 55. New contributions received by members from the age of 55 will be credited to Akaun Emas.
Members can fully access the system on May 12, 2024. For more information on the EPF Account Restructuring initiative, members can visit any EPF branches nationwide, or refer to the EPF official website at www.kwsp.gov.my or through KWSP i-Akaun. – Bernama
