EPF Chief Executive Officer who just took over the position last month newly introduced Account 3, known as Akaun Fleksibel (Flexible Account), is optional for its 16.07 million members and has advised members to be not so enthusiastic.
The account if for short-term financial needs, where savings in this account can be withdrawn at any time according to members’ needs. Effective May 11, members under the age of 55 will have their accounts restructured into three accounts, namely Akaun Persaraan, Akaun Sejahtera and Akaun Fleksibel.
Balances in Account 1 and Account 2 will remain in Akaun Persaraan and Akaun Sejahtera, respectively, while Akaun Fleksibel will start with a zero balance.
Between May 11 and August 31 these members will have a one-time option to transfer part of their savings in their Akaun Sejahtera (previously Account 2) as an initial amount to Akaun Fleksibel.
The EPF said in a statement today that if the member does not choose to opt in, no transfer will be made, and the existing balance will remain in Akaun Sejahtera.
For all those who opt-in, allocation into the new accounts will be as follows: 75 per cent into Akaun Persaraan, 15 per cent into Akaun Sejahtera and 10 per cent into Akaun Fleksibel.
Previously, EPF members’ savings would be credited into Account 1 and Account 2, where 70 per cent of their contributions would go into Account 1, and 30 per cent into Account 2.
We encourage people not to do so (opt-in) because it is important to save for old age, but we understand that flexibility is desired and from time to time you need to access your savings to pay for unexpected expenses,” Ahmad Zulqarnain said during the editors briefing ahead of the announcement today.
The initiative is not just EPF’s response to current needs but also a proactive step to help members cope with the changing job landscape and demographics of the population.
He said if every EPF member decides to opt in, the total fund that would be moved to Account Fleksibel will amount to RM57 billion, of which about RM25 billion is expected to be withdrawn in the first year.
Ahmad Zulqarnain said the setting up of the new account will not impact the provident fund’s portfolio.
For comparison purposes, total withdrawals during the pandemic amounted to RM145 billion.