What you need to know about EPF Account 3

Starting May 11, members of the Employees Provident Fund (EPF) under the age of 55 will gain Account 3, expanding their retirement savings options beyond the existing two accounts.

They will restructured into three categories: Akaun Persaraan, Akaun Sejahtera, and Akaun Fleksibel.

After the effective date, Akaun Fleksibel will start with a zero balance, while the allocations for Akaun Persaraan and Akaun Sejahtera will remain unchanged, according to the statement by EPF.

The statement also mentioned that members’ contributions will be allocated in proportions of 75:15:10 across Account 1 (Retirement Account), Account 2 (“Sejahtera” Account), and Account 3 (Flexible Account), respectively.

Akaun 1 is designed to build savings for retirement income, Akaun 2 caters to life cycle needs enhancing retirement well-being, while Account 3 introduces flexibility for short-term financial requirements.

“The main focus of the EPF account restructuring initiative is to empower members in making decisions to balance future needs for retirement between short-, medium- and long-term financial needs,” EPF chief executive officer Ahmad Zulqarnain Onn said.

He also mentioned that this initiative will help increase members’ retirement savings so that they will have sufficient retirement income to sustain their needs after retirement.

“The restructuring exercise is aimed at enhancing members’ retirement income security while at the same time addressing their current life cycle needs,” he said.

“The purpose of members being given the opt-in option for an initial amount transfer to Akaun Fleksibel is to enable them to make withdrawals from Akaun Fleksibel without having to wait for new contributions,” he said.

EPF members now have the choice to transfer part of their savings from Akaun Sejahtera (formerly known as Account 2) as an initial sum to Akaun Fleksibel, according to Ahmad Zulqarnain.

The newly introduced Akaun Fleksibel addresses members’ short-term needs, allowing them to withdraw savings at any time for any purpose, with a minimum withdrawal of RM50, and applications for withdrawal can be made through EPF i-Akaun or at any EPF branch nationwide, with full system access beginning on May 12.

When a member opts in for an initial amount, the transfer method employed is as follows( info taken from the EPF website):

Balance in Akaun Sejahtera of RM3,000 and above

Transfers will be made as follows:

– Ten out of thirty (10/30) of the balance in Akaun Sejahtera will be transferred to Akaun Fleksibel,

– Five out of thirty (5/30) of the balance in Akaun Sejahtera will be transferred to Akaun Persaraan, and

– Fifteen out of thirty (15/30) will be retained in Akaun Sejahtera.

Balance in Akaun Sejahtera below RM3,000

Transfers will be made as follows:

– Akaun Sejahtera with a balance of RM1,000 and below, will have all funds transferred to Akaun Fleksibel,

– Akaun Sejahtera with a balance of more than RM1,000 and less than RM3,000, the amount transferred to Akaun Fleksibel is RM1,000, while the remainder is retained in Akaun Sejahtera,

– No distribution will be made to Akaun Persaraan for savings balances below RM3,000.

A new distribution method has been introduced, allowing members with lower savings balances to start with a substantial amount in their Akaun Fleksibel.

Starting today until August 31, 2024, members can opt-in for this transfer once, with no option to cancel afterwards.

For more information on the EPF account restructuring initiative, members can visit any EPF branch nationwide, cCheck the official EPF website, or access EPF i-Akaun.