Govt should explain need for third EPF account, says Dr Wee

PETALING JAYA: The government needs to explain the need to open a third Employees' Provident Fund (EPF) account, says Datuk Seri Dr Wee Ka Siong.

Among the MCA president's concerns was why should account holders bother if no dividends were paid for savings in the third account.

"I am trying to understand the objective of introducing a third account. In the past, we have discussed putting 70% of savings into the first account. The remaining 30% will be in the second account for investments and other purposes.

"If there is a third account that will not receive dividends as the first and second account, why would the people need to do so?" asked Dr Wee in a video posted on his Facebook account on Sunday (Oct 29).

"If we want to solve the liquidation of cash and to prevent sudden withdrawals of cash as it will impact the share market, then fortunately RM665bil has been invested by EPF in share markets.

"But imagine if suddenly there is a withdrawal, what will happen to EPF? At the same time, if the people do not have surplus savings for retirement then how are they going to open a third account? It will impact EPF contributors," he said.

In July, the EPF was reported to be looking into introducing Account 3, which would allow savings withdrawals to be made at any time.

The account, it said, would function like a savings account, and members could withdraw their savings at any time.

The proposal to introduce the account was also to meet the potential emergency cash needs.

The current EPF savings scheme structure for members under the age of 55 consists of Account 1 and Account 2, with a percentage rate of 70% and 30%, respectively.