1Malaysia Retirement Savings Scheme
Following the announcement from the Prime Minister Datuk Seri Najib Tun Razak in the 2010 Budget tabling, the 1Malaysia Retirement Savings Scheme is introduced as the Government's initiative to ensure that the self-employed and individuals without fixed monthly income have their own savings plan upon reaching the retirement age. This scheme is effective beginning 3 January 2010.
Details of the scheme are as follows:
The 1Malaysia Retirement Savings Scheme is the Government's initiative to ensure that the self-employed and individuals without fixed monthly income (e.g. taxi drivers, petty traders, farmers, housewives and fishermen) have their own savings plan upon reaching the retirement age.
- The 1Malaysia Retirement Savings Scheme is designed to encourage the self-employed and those without fixed monthly income to contribute voluntarily based on what they can afford.
- The rationale for the implementation of the 1Malaysia Retirement Savings Scheme is to:
a) Provide a channel for individuals who are self-employed and individuals without fixed monthly income to have a savings fund for the purpose of retirement.
b) Increase the number of these self-employed individuals to save up with the EPF.
c) Express the Government's sensitivity towards the self-employed group by providing an insentive for this group to save up for their retirement.
d) To reduce the number of elderly who depend on the Social Welfare Department of Malaysia's programme allocation.
B. APPLICATION TO OPT FOR THE 1MALAYSIA RETIREMENT SAVINGS SCHEME
B1. ELIGIBILITY TO APPLY
- Malaysian citizen
- 'Self-employed' refers to any individuals who are working with income and not an employee; AND
- Member of the EPF (If not yet a member, registration at the EPF counter is required by using MyKad or via mail by submitting the Form KWSP 3 and a copy of MyKad).
B2. HOW TO APPLY
- Application submission at the EPF counter or via mail.
C. CONTRIBUTION PAYMENT - 1MALAYSIA RETIREMENT SAVINGS SCHEME
C1. TERMS OF PAYMENT
Has registered to contribute in the 1Malaysia Retirement Savings Scheme;
- Minimum contribution payment amount is RM50; AND
- Maximum limit of RM60,000 yearly effective January 2013.
The accumulated maximum limit for Self Contribution, 1Malaysia Retirement Savings Scheme and Top Up Savings Contribution is RM60,000 yearly.
C2. HOW TO MAKE PAYMENT
- The KWSP 6A(2) Form is to be submitted together with the cash/cheque at the EPF counter/mail at the appointed bank agent counters, i.e. RHB, MBB, PBB and BSN.
C3. GOVERNMENT'S CONTRIBUTION AND CREDITING
Apart from the yearly dividend, the 1Malaysia Retirement Savings Scheme will also receive the Government's contribution of 10% subject to a maximum amount of RM120 per year (New rate effective from 1st January 2014). This contribution by the Government will only be for a period of 4 years from 2014 – 2017.
- Members with fixed employers' contribution (employed and have fixed income) are not eligible to receive the Government's contribution.
- The Government's contribution is limited to members who are below 55 years of age only.
- The EPF will make the claim for the Government's contribution twice a year based on the contribution for the first half of the year and second half of the year every year. The Government's contribution will be credited into the member's account upon receipt of the amount from the Government.
Should you have any enquiries or require further information on the 1Malaysia Retirement Savings Scheme, please contact:
• Any nearby EPF Offices.
• EPF Call Management Centre, Tel: 03-89226000.
Please quote your Identification Card number or EPF membership number when you contact the EPF. E. Frequently Asked Questions (FAQ)
To view the Frequently Asked Questions (FAQ) regarding the 1Malaysia Retirement Savings Scheme, please click here.
Updated: 19 February 2014