For those who may not know, a member’s Employees Provident Fund (EPF) consists of two accounts; Account 1 and Account 2. The first account holds 70% of your monthly contribution, while the second holds the remaining 30%. Withdrawals are restricted for Account 1 until the individual reaches the age of 50 whereas Account 2 allows withdrawals within reasons permitted by EPF.
What if there was a third account? What purpose would it serve? Back in October, Malaysian Prime Minister Anwar Ibrahim announced that a third “Flexible” EPF account was included for Budget 2024 adding that it could be accessed by members at any time. It appears that more details about this new account have been shared earlier today (Monday, 20th November).
According to Free Malaysia Today, Deputy Finance Minister Ahmad Maslan announced that a third “flexible” account will be implemented in the EPF system starting in April of next year in 2024. As for the details of how the new account will work, the politician shared that both EPF and the Ministry of Finance will announce more information later in February.
“The relevant organisations can give their views on this flexible account by writing to the finance ministry and EPF,” he told local news outlets. While the full details are yet to be released, the minister did reveal that EPF members can withdraw money from the third account to be used in the event of an emergency. Details on what would qualify as an emergency were not yet specified.
Unfortunately, not much was shared about the third “Flexible” account other than it would introduce a new formula to help those in need. Other than that, it was revealed that a total of RM145 billion was withdrawn from EPF members during the Covid-19 lockdowns in order for them to survive.
Guess we’ll have to wait for February for more details to be shared about this latest implementation.