EPF revamp: Members below 55 will have three accounts

  • Nation
  • Wednesday, 17 Apr 2024

PETALING JAYA: A restructuring exercise by the Employees' Provident Fund (EPF) will see the EPF Account 1 being renamed as Account Persaraan (Retirement Account), Account 2 as Account Sejahtera and the formation of the new Account 3 or the flexible account, say sources.

The EPF Account 3 is expected to be announced by the end of April.

The Star has learnt that while a date has not been confirmed, the launch of Account 3 or the flexible account is expected by month end.

The accounts of members aged below 55 will be restructured from two accounts into three starting May 11.

ALSO READ: Lack of retirement savings an ongoing concern

Currently, for members aged below 55, 70% of their contributions go into Account 1 while 30% goes into Account 2.

But after Account 3 goes live, the new contributions will be split in a way where 75% will be put into Account 1, 15% into Account 2 and 10% into Account 3.

“Members may choose to transfer funds from Account Sejahtera to the Flexible Account via an opt-in mechanism,” the source said.

“Members are given until Aug 31, 2024, to opt in for initial amount in Flexible Account,” added the source.

ALSO READ: No change in mandatory EPF contribution rates expected with new Account 3, says CEO

Between May to August, members can opt in for the initial amount, they call it the accumulation phase,” the source said.

As for members who choose not to opt in for an initial amount in their Account 3, their balance will start from zero until new contributions are credited.

“Savings from the flexible account can be withdrawn by members at any time, with the minimum withdrawal amount being RM50.”

The source said EPF dividends are likely to remain the same.

The EPF said last year that the Account 3, 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.

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