The Employees Provident Fund (EPF) is undergoing a significant transformation, and with it comes a natural wave of questions. The recently announced account restructuring initiative, while undeniably impactful, might seem a tad complex at first glance.
Fret not, young professionals! Let’s break down this update in a clear and concise manner.
Akaun Persaraan (Account 1)
This remains the cornerstone of retirement planning. It encompasses 75% of your savings, aimed at steadily building and improving retirement funds for a comfortable post-retirement life.
Funds in this account cannot be withdrawn until members reach the age of 55. However, eligible members have the option to invest a portion of their retirement account savings in investments managed by approved fund management institutions.
Akaun Sejahtera (Account 2)
Comprising 15% of your savings, this account aims to fulfill pre-retirement life cycle needs that contribute to well-being during retirement. Savings in the this account can be withdrawn for allowed pre-retirement expenses (subject to EPF terms and conditions) such as:
i. Housing
ii. Education
iii. Health
iv. Insurance protection
v. Hajj pilgrimage
vi. Withdrawals at age 50
Akaun Fleksibel (Account 3)
This exciting addition injects a dose of flexibility. 10% of your savings will go to this account. During the transition period from May 11, 2024, to August 31, 2024, you will have the opportunity for a one-time transfer of a portion of their Akaun Sejahtera balance to Akaun Fleksibel. Essentially, this becomes your readily accessible savings for unforeseen circumstances or even short-term goals. However, EPF encourages withdrawals to be used only in emergencies and for urgent needs.
This restructuring demonstrates the EPF’s commitment to providing a comprehensive and adaptable retirement saving system. By designating specific accounts with clear purposes, you gain greater control over your financial future. Akaun Fleksibel, in particular, empowers you to address unexpected needs without compromising your long-term security.
To ensure that members with low savings (balance in Akaun Sejahtera below RM3,000) can establish a significant initial amount in their Akaun Fleksibel, the transfer method will follow the breakdown outlined below:
• Akaun Sejahtera with balance of RM1,000 and below, all amount will be transferred to Akaun Fleksibel.
• Akaun Sejahtera with balance of more than RM1,000 and less than RM3,000, the amount transferred to Akaun Fleksibel is RM1,000, while the remainder is retained in Akaun Sejahtera.
• No distribution will be made to Akaun Persaraan for savings balance below RM3,000.
Withdrawals from Akaun Fleksibel are permissible at any time, subject to a minimum withdrawal threshold of RM50. Application for withdrawals can be facilitated online through the KWSP i-Akaun platform or in person at EPF branches nationwide.
In line with existing procedures, all savings in Akaun Persaraan, Akaun Sejahtera, and Akaun Fleksibel of members who have reached age 55 will be merged into Akaun 55. Contributions made by members aged 55 and above will be deposited into Akaun Emas.
Source here.
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