No Change To Age 55 Withdrawal And Introducing Akaun Emas For Age 60 Withdrawal
KUALA LUMPUR, 3 November 2016: The Employees Provident Fund (EPF) today announced that effective 1 January 2017, Akaun Emas will be introduced as a second retirement nest egg for members working beyond age 55. There is no change to the current Age 55 Withdrawal.
The Akaun Emas is one of the initiatives under the enhancement to the EPF schemes as set out under the EPF Act 1991 where all new contributions received after age 55 will be automatically parked under Akaun Emas and can only be withdrawn when members reach age 60. This is to ensure the sufficiency of members’ retirement savings upon reaching age 60.
EPF Chief Executive Officer Datuk Shahril Ridza Ridzuan said, “During the Members Consultation Exercise held in April last year, we proposed several enhancement initiatives to the current schemes, and chief among them was the introduction of the Akaun Emas.
“Considering the reality that the average Malaysian today is working beyond the age of 55 and the minimum retirement age of 60, the EPF decided to provide a second retirement nest egg via the Akaun Emas to secure members’ savings from age 55 to 60. The extra savings accumulated during this five-year period will go a long way in serving members’ needs when they retire.”
The EPF assures members that the current Age 55 Withdrawal will remain. All existing balances for members above age 55 will remain available for withdrawal. The Akaun Emas will not affect the existing scheme, where members have the option to make full or partial withdrawals upon reaching age 55. Members will also continue to earn dividends for their savings in both Akaun Emas and the balance of their savings in Akaun 55.
In addition to the Akaun Emas and Akaun 55 initiatives, the EPF is also extending the dividend payment limit to age 100 from the current age 75. This will benefit members who choose to maintain a portion of their savings with the EPF, allowing them to benefit from the compounding effect of receiving dividend until a full withdrawal is made.
Following the Members Consultation Exercise last year, a total of 94 per cent of respondents overwhelmingly agreed for the EPF to maintain the Age 55 Withdrawal, with new contributions from age 55 to 60 to be locked in until age 60, hence the introduction of Akaun Emas. The exercise also saw 61 per cent of respondents agreed that the dividend payments to be extended from the current age 75 to 100.
Several other enhancement initiatives were also introduced to the EPF schemes and policies such as changes to the nomination policies, increase in the Basic Savings quantum, pre-retirement withdrawals for non-Malaysian members, and enhancements of policy administration (please see Attachment 1). All these initiatives will take effect on 1 January 2017.
For more information on the enhancement initiatives, members can also refer to the Enhancement of EPF Scheme and Policy microsite via the EPF website at new.epf.gov.my or call the EPF Contact Management Centre at 03-89226000.
About the Employees Provident Fund (EPF)
The Employees Provident Fund (EPF) is Malaysia’s premier retirement savings fund to help its members achieve adequate savings for a comfortable retirement. This is in line with EPF’s vision to help members achieve a better future and the mission to safeguard members’ savings and deliver excellent services. The EPF has evolved significantly from transaction-centric to a professional fund management organisation with a strong focus on retirement security. The EPF is guided by a robust and professional governance framework when making investment decisions. It continues to play a catalytic role in the nation’s economic growth and seeks to cultivate a savings and investment culture among its members to improve the country’s financial literacy level.
SUMMARY OF ENHANCEMENT INITIATIVES TO EPF SCHEMES AND POLICIES
(Age 55 Withdrawal)
Contributions from Account 1 and 2 will be transferred to Akaun 55 for members who have reached age 55 and above starting 1 January 2017.
After the transfer to Akaun 55, any withdrawals can be made subject to current eligibility and procedures.
(Age 60 Withdrawal)
Any contributions received after age 55 starting 1 January 2017 will be parked under the new Akaun Emas.
No pre-retirement withdrawals from Akaun Emas.
Accumulated contributions can only be withdrawn at age 60.
Upon reaching age 60, balances in Akaun 55 and Akaun Emaswill be combined for withdrawal.
Dividend Payment and Unclaimed Savings
Dividends will continue to be credited into members’ account until the savings are transferred to the Registrar of Unclaimed Monies after 100 years
Members will continue to enjoy annual dividend up to age 100.
Initial payment of Death Withdrawal has been increased from RM20,000 to 25,000 depending on balance of savings in the deceased members’ account.
Witness no longer required for nominations.
For Muslim members:
o Clarifying the role of executor/administrator in nomination form
o Nomination will be revoked if withdrawal application is not made within one (1) year after member’s death
o Under-aged nominee can execute the responsibility of executor/administrator upon reaching 18 years old.
New Basic Savings Quantum
The Basic Savings quantum will increase from current RM196,800 to RM228,000 to align with the revised minimum pension for public sector employees (RM820 to RM950 monthly)
Eligibility to participate in the EPF Member Investment Scheme (EPF-MIS) has been increased from 20 per cent to 30 per cent of savings in excess of the Basic Savings quantum by age in Account 1.
Additional Withdrawal Options for Non-Malaysian Members
The enhancement initiative enables non-Malaysian members to make additional withdrawals, subject to terms and conditions, as below:
o PRE-RETIREMENT WITHDRAWALS
- Age 50 Withdrawal
- Housing Withdrawal – Only for property purchased in Malaysia
- Education Withdrawal
- Health Withdrawal
o FULL WITHDRAWAL
- Age 55 – Lump Sum
- Leaving Country
Order of Forfeiture
Savings will not be protected under Section 51 in the event that a forfeiture order is issued by the court under the Anti-Money Laundering Act, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613) where members’ savings can be surrendered and transferred to the relevant government authorities.