Are you a member of the EPF? If you are, you’re in luck!
With the new year fast approaching, the more than 13.7 million Employees Provident Fund (EPF) members have several pieces of good news to look forward to.
As part of its continuing efforts to improve and meet the high expectations of its members, the EPF has introduced four enhancements to its schemes and policies that will take effect from Jan 1, 2018.Read more ↓
Chief executive officer Datuk Shahril Ridza Ridzuan says with the dramatic demographic shift affecting Malaysia and the rest of the world as populations age, a majority of EPF members will face increasing challenges in preparing for their retirement.
“It is going to be another challenging year, coupled with the advent of the next industrial revolution,” says Shahril.
“In fact, we anticipated this situation and will be putting in place several improvements to existing schemes and policies.
“All this is to assist our members in facing trying times together, and to keep pace with changes in their needs and expectations,” he said during a recent media briefing.
Among one of the key initiatives is to provide an option for members to appoint Amanah Raya Berhad as nominee or administrator trustee to their EPF savings.
This measure will enable faster and equitable distribution of total savings belonging to EPF members to next of kin, upon their demise.
All EPF members, especially those with children below 18 years, will stand to benefit considerably from this latest move.
Shahril points out that this new option is an addition to members’ existing rights to appoint any individual as a nominee.
The second improvement set to take effect from early next year involves withdrawal payment options for members at the ages of 55 and 60.
At present, the policy is to allow only withdrawals of RM2,000 only over a period of 30 days.
But from Jan 1 onwards, this scheme will be upgraded and simplified.
Members can choose to make partial withdrawals of any amount, at any time. For example, one could even take out as little as RM100 per month, as opposed to RM250 under the current policy.
Shahril says EPF members can also seek advice from its Retirement Advisory Services, provided for free at its 18 branches nationwide.
“Our staff will be glad to help members plan for their long-term retirement needs and decide on the optimum withdrawal amount and frequency,” he says.
The third reform is related to age extension over the flexible withdrawal policy.
All members can opt to withdraw any amount, at any time, until the age of 100. And we can choose to make it a combination of monthly and partial withdrawals. The current age is capped at 75 years old.
This measure was mooted in tandem with the extension of dividend payout to all members from the ages of 75 to 100.
The final adjustment introduced for the benefit of EPF members is prolonging the death benefit due to a longer lifespan.
With this, the current death benefit of RM2,500, claimable if a member dies before he or she reaches 55, will be extended until the age of 60.
This is in line with the national retirement age of 60 years old.
Shahril says all four new measures, to be implemented from next year, were decided upon based on numerous feedback from members.
“Our members have asked for more flexibility in terms of withdrawals, so we need to look into and address their pressing needs,” he says.
With these improvements in place, EPF aims to open up more choices for members in managing their savings prudently upon retirement.
“We want to encourage members to plan their retirement savings through flexible withdrawals and not be tempted to withdraw all in a lump sum, which may lead to exhausting the entire sum within a short period of time.
“All these improvements are part of our continuous engagement with members in looking after their long-term interests,” he stresses.
In a related matter, EPF will also be embarking on a reclassification exercise to distinguish between accounts with savings and those with zero savings (dormant accounts).
Data on employers, meanwhile, is reclassified as those with “employer” status, as stipulated in the EPF Act 1991, and self-employed status.
The EPF’s database system will automatically update any changes to the members’ or employers’ account status.
However, the reclassification of data does not affect contribution amount or withdrawal statistics.
For this exercise, Shahril says it deals with a vast amount of data as the number of EPF members and employers have grown significantly over the past 66 years.
“This is necessary to provide greater transparency and clarity to the status of accounts and to ensure our statistics conform to the current provisions in the EPF Act.
“All dormant accounts will remain open for members below 75 years old, in order to provide them with an opportunity to re-contribute to their accounts for their retirement well-being,” he says.
As Malaysia’s premier retirement savings fund, EPF’s vision is to help members achieve a more secure future and 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.
It is guided by a robust and professional governance framework when making investment decisions and will continue to play a catalytic role in the nation’s economic growth.
For more information on the new enhancements to EPF policies and schemes, visit the EPF website at kwsp.gov.my or conact the EPF management centre at 03-8922 6000.