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Thursday April 26, 2007

More flexible EPF withdrawals


KUALA LUMPUR: Employees Provident Fund (EPF) contributors can withdraw their savings in any amount and at any time after reaching 55 years of age once the Employees Provident Fund (Amendment) Act 2007 is approved. 

Under the amendments, those aged 55 can opt to either withdraw in a lump sum, in monthly instalments or any amount at any time or a combination of both. 

Friendly visit Prime Minister Datuk Seri Abdullah Ahmad Badawi greeting Commonwealth secretarygeneral Don McKinnon who called on him at his office in Putrajaya yesterday. McKinnon, who arrived yesterday, is on a three-day visit to Malaysia. – Bernama
Currently, members are only allowed to withdraw a lump sum or choose monthly or dividend payments. 

“About 1% of contributors who withdraw their savings in a lump sum, end up finishing it within three years,” said Rusma Ibrahim, the deputy chief executive officer for EPF’s organisational development body, while briefing MPs at Parliament here yesterday. 

Also present at the briefing was Finance Ministry’s parliamentary secretary Datuk Dr Hilmy Yahya. 

Rusma said that more perks were also in store for the 11 million contributors including having a basic savings “safety net”, allowing them to use part of their money for investment and topping up their spouses or parents’ account.  

EPF is also cutting the red tape on administration matters to make it easier for members, said Rusma. 

Once the Bill is approved, employers must contribute a mandatory 6% of salaries of workers aged 55 and above while these workers will contribute 5.5%. 

Presently, workers those below 55 contribute 11% while their employers pay 12%.  

Rusma said under the existing rules, it was not compulsory for employers to contribute 12% of salaries drawn by staff aged 55 although many employers did so at their own discretion. 

On the RM5 optional employer’s contribution for foreign workers, Rusma said it was not new and had been implemented before in 1998.  

Related View:
EPF must have a reason
 

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