KUALA LUMPUR: The Employees Provident Fund (EPF) will announce the highly-anticipated Account 3 tomorrow, offering flexibility to contributors in managing their savings.
It is learnt that a key feature of Account 3 is the freedom to opt in or opt out based on individual financial goals.
It is also understood that EPF members will be given a grace period to decide on the arrangement that will be made available to them, from tomorrow.
Among the three EPF accounts, Account 1 - known as Akaun Persaraan - will be designated for retirement savings, while Account 2, referred to as Akaun Sejahtera, will cater to withdrawals for education, health and housing expenses.
The freshly-minted Account 3, named Akaun Fleksibel, will serve as a reserve for unforeseen emergencies.
Currently, 70 per cent of EPF members' monthly contributions are channelled into Account 1, which cannot be accessed until after retirement.
The other 30 per cent goes into Account 2, which can be accessed to pay for education, healthcare and housing, as well as a partial one-time withdrawal at age 50. However from May, the restructured system will see monthly contributions split three ways: 75 per cent into Account 1, 15 per cent into Account 2 and 10 per cent into Account 3.
Account 3 provides contributors with the flexibility to withdraw funds at any time, similar to a savings account.
Additionally, EPF is considering allowing members aiming to maximise capital gains to transfer funds from Account 3 to Accounts 2.
The introduction of Account 3 comes after four Covid-19 pandemic-related withdrawal programmes drained RM145 billion from the EPF.
As of December 2023, the pension fund's investment assets stood at RM1.13 trillion.
The New Straits Times recently reported that members who opt not to withdraw from Account 3 might receive a significantly lower "token" payout compared to the dividends for Accounts 1 and 2.
The EPF paid out RM57.8 billion in dividend to members for 2023, comprising a 5.5 per cent dividend for members with the conventional account and 5.4 per cent for the Syariah account.
The EPF announced a dividend of 5.35 per cent for conventional accounts and 4.75 per cent for Syariah accounts in 2022.
At the end of 2023, EPF had 8.5 million active members. Of these members, 6.7 million have conventional accounts, while the rest have Syariah accounts.