The Employees Provident Fund (EPF) has taken a significant step to ensure the financial well-being of its members by restructuring their accounts. Effective from 11 May 2024, this initiative is designed to enhance income security post-retirement while also addressing current life cycle needs. This restructuring will transform the existing two-account system into a more nuanced three-account structure. The new system aims to provide members with greater flexibility and control over their savings.
Overview of the Restructuring
The EPF account restructuring involves the transition from two main accounts, Account 1 and Account 2 to three newly defined accounts: Akaun Persaraan, Akaun Sejahtera, and Akaun Fleksibel. This change is rooted in the need to better address the diverse financial requirements of members throughout their lives, ensuring that both immediate and future needs are met efficiently.
Detailed Breakdown of New Accounts
Akaun Persaraan
Akaun Persaraan is dedicated to accumulating savings that will serve as a source of income during retirement. This account is designed to ensure that members have sufficient funds to sustain themselves financially after they retire, providing a stable and reliable income stream.
Akaun Sejahtera
Akaun Sejahtera focuses on addressing the life cycle needs that contribute to overall well-being during retirement. This account recognizes that retirement is not just about having enough money to live on but also about maintaining a good quality of life. Therefore, it allows for the financing of various needs that arise during the retirement years.
Akaun Fleksibel
Akaun Fleksibel introduces a new level of financial flexibility for EPF members. This account can be accessed for short-term financial needs, allowing members to withdraw savings at any time based on their requirements. It provides an essential safety net for unexpected expenses and financial emergencies.
Mechanics of the EPF Account Restructuring
On the effective date of 11 May 2024, all EPF members under the age of 55 will see their existing accounts restructured into three new accounts. Balances from Account 1 will transfer to Akaun Persaraan, while balances from Account 2 will move to Akaun Sejahtera. Akaun Fleksibel will initially have a zero balance, but members can choose to transfer funds into it.
Contributions Allocation Post-Restructuring
After the restructuring, all new contributions will be distributed among the three accounts in the following manner: 75% to Akaun Persaraan, 15% to Akaun Sejahtera, and 10% to Akaun Fleksibel. This allocation strategy ensures that the bulk of savings continues to be directed towards retirement income, while also providing for current needs and financial flexibility.
One-Time Transfer Option
Between 11 May 2024 and 31 August 2024, members have a one-time option to transfer part of their savings from Akaun Sejahtera to Akaun Fleksibel. This transfer allows members to start their Akaun Fleksibel with an initial amount. If a member does not opt-in for this transfer, the balance will remain in Akaun Sejahtera.
One-Time Transfer Option
Balances of RM3,000 and Above
For members with balances of RM3,000 or more in Akaun Sejahtera, the transfer will be divided as follows:
- Ten out of thirty (10/30) of the balance will move to Akaun Fleksibel.
- Five out of thirty (5/30) will transfer to Akaun Persaraan.
- The remaining fifteen out of thirty (15/30) will stay in Akaun Sejahtera.
Balances Below RM3,000
For balances below RM3,000, the transfer method differs:
- If the balance is RM1,000 or less, the entire amount will move to Akaun Fleksibel.
- For balances between RM1,000 and RM3,000, RM1,000 will be transferred to Akaun Fleksibel, and the remainder will stay in Akaun Sejahtera.
- No funds will be transferred to Akaun Persaraan for balances below RM3,000.
This approach ensures that members with lower balances still have meaningful funds in Akaun Fleksibel.
Withdrawal Procedures for Akaun Fleksibel
Withdrawals from Akaun Fleksibel can be made at any time for any purpose, with a minimum withdrawal amount of RM50. Members can apply for withdrawals online via the KWSP i-Akaun platform or at any EPF branch. Members are encouraged to register with KWSP i-Akaun to facilitate smooth transactions.
Transition to Akaun 55 and Akaun Emas
Upon reaching the age of 55, all savings in Akaun Persaraan, Akaun Sejahtera, and Akaun Fleksibel will merge into Akaun 55. Contributions made after age 55 will go into Akaun Emas. This ensures a seamless transition and continued management of retirement savings.
Access and Additional Information
Members will have full access to the restructured account system starting 12 May 2024. For more information, they can visit any EPF branch or refer to the EPF official website. The KWSP i-Akaun platform also provides comprehensive details and application options for members.
This restructuring initiative reflects EPF’s proactive approach to meeting the evolving financial needs of its members, ensuring they can navigate their retirement years with confidence and security.
