The Employees’ Provident Fund (EPF) will soon reveal details for Account 3, a new flexible account which allows members to withdraw funds at any time. Ahead of the official announcement, NST reported early details for Account 3 and contributions are expected to begin as early as May onward.
According to the paper, Account 3 will start with a zero balance and comprise 10% of future monthly contributions. With the new restructured system, Account 1 will receive 75% of the monthly contribution while Account 2 will get 15%. At the moment, the monthly EPF contributions are split at 70% to Account 1 and 30% to Account 2.
Unlike Account 1 and Account 2 where withdrawals are permitted for retirement or special purposes such as education, healthcare, housing and partial withdrawal at age 50, Account 3 provides flexibility for members to withdraw at any time like a savings account. According to Finance Minister II Amir Hamzah, the new account will replace the implementation of EPF-targeted withdrawals.
According to NST’s source, funds kept in Account 3 might get a “token” payment which is expected to be lower than the dividend for Account 1 and Account 2. However, it is said that EPF members will be allowed to maximise capital gains by transferring Account 3 funds to Accounts 1 and 2.
Recently, EPF has declared a dividend of 5.5% for members with conventional accounts and 5.4% for Syariah accounts for 2023. In total, EPF has paid out RM57.81 billion to members for 2023. By the end of 2023, there are 8.5 million active EPF members.
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