EPF to announce Account 3 on April 25

PETALING JAYA: The Employees Provident Fund (EPF) is expected to announce the Account 3 or Flexible account on April 25.

The Star reported on April 17 that the restructuring exercise will see the EPF accounts being split from two to three for members aged below 55.

The EPF Account 1 will be renamed as Account Persaraan (Retirement Account), Account 2 as Account Sejahtera and the new Account 3 or the “flexible account” will be formed.

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, 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. Members are given until Aug 31, 2024, to opt in for the initial amount in the flexible account," the source said.

It was added that members can opt for the initial amount from May to August which will be the accumulation phase.

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“Savings from the flexible account can be withdrawn by members at any time, with the minimum withdrawal amount being RM50.”

For those with savings of less than RM3,000 in Account 2, RM1,000 will be transferred to the flexible account.

On the redistribution of existing funds from Account 2, it is understood that one-third of the funds could go into Account 3 while one-sixth will go into Account 1.

The remaining balance will remain in Account 2.

EPF dividends are also likely to remain in the same range despite the formation of Account 3.

The EPF said last year that Account 3 would function like a savings account, and members could withdraw their savings any time.

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