KUALA LUMPUR: The Employees Provident Fund (EPF) has guided that if every member opts for a one-off transfer from Account 2 into Account 3, the amount will stand at RM57 billion, according to CIMB Research.
The pension fund also estimated that RM25 billion might flow out from Account 3 in the first year, based on patterns from pandemic-related withdrawal schemes, before moderating to RM4.0 billion-RM5.0 billion per annum thereafter.
CIMB Research said the EPF expects no impact to its portfolio, although caveating that holding liquid assets have a trade-off against returns.
The firm added that the outflow from Account 3 may overlap with the regular run rate of conditional Account 2 withdrawals, thereby moderating gross withdrawals.
"Withdrawals for emergency needs tend to be more urgent for B40 and M40 members, which hold RM11 billion and RM180 billion in total savings respectively.
"However, EPF previously estimated in 2021 that 60 per cent of members had exhausted Account 2 balances due to Covid-19 schemes, suggesting that potential outflows could be moderated if the T20 segment are motivated to keep savings by the retention of a uniform dividend rate across all accounts for the time being," CIMB Research noted.
The EPF will revamp the structure of Accounts 1 and 2 for members aged below 55 into three accounts effective from May 11.
The three accounts are Akaun Persaraan for retirement (Account 1), Akaun Sejahtera for pre-retirement lifecycle needs such as housing, education and medical (Account 2) and Akaun Fleksibel for short-term financial needs (Account 3).
New mandatory and voluntary contributions will be apportioned at a ratio of 75:15:10 for Account 1, Account 2 and Account 3 respectively.
Members may also opt to move funds from Account 3 into the more restrictive accounts or from Account 2 to Account 1, but not the other way round.
Meanwhile, CIMB Research said the outflow from Account 3 will affect the demand for Malaysia Government Securities (MGS) /Government Investment Issue (GII) in the near term.
This, however, will be mitigated by strong net contributions, ample onshore liquidity and repatriation by government-linked companies and government-linked investment companies.
The firm said persistently strong net contributions and asset under management growth amid robust labour markets and wage growth will cushion the impact to MGS/GII.
"It is also supported by upside to EPF contributions arising from the shift of new civil servants into a defined contribution retirement plan, strong onshore liquidity as seen in auction over-subscriptions and GLC/GLIC/corporate repatriation and conversion of foreign investment income or export proceeds," it added.