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Effective 1 January 2017, the Employees Provident Fund EPF will introduce Akaun Emas as a second retirement nest egg for members working beyond the age of 55.
According to a press release by the EPF, 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.
Details on the new scheme:
Akaun 55 (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.
Akaun Emas (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- Accumulated contributions can only be withdrawn at age 60.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 Emas will be combined for withdrawal.
In addition to the above initiatives, the EPF is also extending the dividend payment limit to age 100 from the current age 75 to benefit members who choose to maintain a portion of their savings with the EPF. This will allow them to benefit from the compounding effect of receiving dividend until a full withdrawal is made.
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.”
According to the press release, 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. All these initiatives will take effect on 1 January 2017.
Photo / 123RF
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