KUCHING: The proposed monthly pension scheme under the Employees Provident Fund (EPF) will only apply to new members should it be implemented.
Deputy Finance Minister Lim Hui Ying clarified that the new structure will not affect the current withdrawal rights of existing members and any transition to the new structure would be voluntary.
“EPF has announced a proposed restructuring of account arrangements for the retirement savings withdrawal phase. This is a significant step towards ensuring that contributors have a stable and sustainable income stream after retirement,” she said in a Facebook post on Saturday.
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“The EPF contributions would be divided into two parts with Flexible Savings, where members can be withdraw at any time, and Retirement Income Savings, to be paid out periodically until fully depleted.
“This is merely an initial proposal, and the Madani government remains committed to listening to the people’s views and conducting thorough engagement before any implementation takes place.”
She added that the objective is clear which is to ensure the public can manage their retirement savings in a more structured, equitable and sustainable manner.
At the moment, EPF members can withdraw their full balance at age 55, but the government is studying a monthly payout option to provide a more stable post-retirement income alongside the lump-sum withdrawal, according to the 13th Malaysia Plan tabled on July 31.
However, EPF later said the proposal is currently being studied and any decision would only be made after thorough engagements with key stakeholders and careful consideration of members’ long-term interests, and that existing rules and withdrawal mechanisms remain unchanged.
Currently, EPF savings are split into three accounts: Account 1 for retirement, Account 2 for selected pre-retirement needs, and Account 3 for flexible, short-term use.
