KUALA LUMPUR: All Employees Provident Fund (EPF) members under the age of 55 will have their accounts restructured from two previously into three accounts effective from May 11.
The three accounts are Akaun Persaraan to accumulate savings that will serve as income during retirement, Akaun Sejahtera to address life cycle needs that contribute to wellbeing during retirement and Akaun Fleksibel as a new account that provides flexibility for short-term financial needs.
Savings in Akaun Fleksibel can be withdrawn at any time with a minimum withdrawal amount of RM50.
All contributions after May 11 will be allocated into the new accounts in the following manners: 75 per cent into Akaun Persaraan, 15 per cent into Akaun Sejahtera and 10 per cent into Akaun Fleksibel.
Balances in Account 1 and Account 2 will remain in Akaun Persaraan and Akaun Sejahtera respectively, while Akaun Fleksibel will start with a zero balance.
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 (previously Account 2) 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.
EPF, in a statement today, said the restructuring of its members' accounts is aimed at enhancing their income security after retirement while addressing members' current life cycle needs.
EPF chief executive officer Ahmad Zulqarnain Onn said the main focus of the account restructuring 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 added.
Akaun Fleksibel will start with new contributions that will be credited into 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.
The transfer method is according to the breakdown as below:
Balance in Akaun Sejahtera of RM3,000 and above:
Transfers will be made as follows:
· Ten out of thirty (10/30) of the balance in Akaun Sejahtera will be transferred to Akaun Fleksibel;
· Five out of thirty (5/30) of the balance in Akaun Sejahtera will be transferred to Akaun Persaraan; and
· Fifteen out of thirty (15/30) will be retained in Akaun Sejahtera.
Balance in Akaun Sejahtera below RM3,000:
Transfers will be made as follows:
· Akaun Sejahtera with balance of RM1,000 and below, all amount will be transferred to Akaun Fleksibel.
· Akaun Sejahtera with 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 savings balance below RM3,000.
The difference in this distribution method is to enable members with a low savings balance 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 time 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 branches nationwide.
Ahmad Zulqarnain said the initiative is not just thevEPF'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 members.
"With these enhancements, the EPF strives to ensure that every EPF member can manage their finances with confidence and resilience in this dynamic and challenging environment," he added.