All EPF contributions to go into Account 1 to increase savings
Published on: Wednesday, November 24, 2021
By: FMT
All Employees Provident Fund (EPF) contributions will, for now, go into Account 1 to replenish the savings of members, especially of those who have withdrawn funds to cushion the impact of Covid-19.
Deputy finance minister Mohd Shahar Abdullah said RM101 billion had been withdrawn from EPF by members under i-Lestari, i-Sinar and i-Citra, part of the government’s stimulus packages.
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He said all new contributions would be credited to Account 1 until the amount that was withdrawn had been replaced.
“After that, we will go back to the previous system of saving 70% in Account 1 and 30% in Account 2,” he said in the Dewan Rakyat.
Money in Account 1 can only be withdrawn upon retirement whereas money in Account 2 can be withdrawn, subject to conditions, for housing, education and medical expenses.
Shahar was replying to an additional question from Che Abdullah Mat Nawi (PAS-Tumpat) who, noting the billions “wiped out” from the EPF, asked what measures the government was taking to increase savings in Account 1.
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Earlier, Shahar told the House that various measures were being carried out to ensure retirement savings were increased.
The measures include allowing members to make monthly withdrawals so that they can enjoy dividends on their savings, and employers being required to contribute 4% of the monthly salary of those above 60.
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There were also voluntary contribution and insurance schemes to protect members and their families from critical illness and death, he added.
To a question from Hassan Karim (PH-Pasir Gudang) as to whether the large sum withdrawn in total would affect investments and dividends for this year, Shahar said it would not have an impact on investments.
Regarding dividends for EPF members, he said dividends for this year would be announced next year.
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