‘RM6.98bil withdrawn from EPF Account 3’

A TOTAL of RM6.98bil has been withdrawn from the Employees Provident Fund (EPF) Account 3 by members below 55 years of age, the Dewan Rakyat was told.

The Finance Ministry said this comprises 2.93 million, or 22.6%, EPF members within the age group, involving an average withdrawal of RM2,382.

It also said that as of June 10, a total of RM10.86bil was transferred as an initial amount into Account 3, or the Flexible Account, which involved 3.45 million members.

“Members can opt to have the initial amount by transferring a portion of savings in Account Sejahtera (Account 2) to the Flexible Account from May 12 to Aug 31,” the ministry said in a written response to Sim Tze Tzin (PH-Bayan Baru).

Sim had asked the ministry to state the total percentage of EPF members that have done transfers to Account 3, the total amount of withdrawal and the impact of the withdrawal.

“The restructuring of accounts has not significantly affected the financial position of EPF as the fund has reallocated sufficient cash balance to fulfil the withdrawal demand through the Flexible Account,” the ministry said.

The ministry added that the restructuring of EPF accounts was carried out to ensure more sustainable financial well-being during retirement while balancing the current needs of the members.

“The initiative aims to help increase members’ savings to allow them to have sufficient income to support their retirement lives.

“With this initiative, the government strives to ensure that every EPF member can confidently and resiliently manage their finances in today’s dynamic and challenging (economic) environment,” it said.

For members under 55, a restructuring plan that went into effect on May 11 splits EPF accounts from two to three.

EPF Account 3 provides members under the age of 55 with funds for short-term financial needs.

With the restructuring of EPF accounts, the monthly contributions of members would be divided by 75%, 15% and 10% and channelled to Accounts 1, 2 and 3, respectively.