KUALA LUMPUR – April 20, 2015: The Employees Provident Fund (EPF) is proposing four changes to its existing scheme that includes aligning the full withdrawal age in tandem with the current retirement age of 60 set by the government.
One proposal is to allow members to extend the full withdrawal age from the present 55 years to 60 on a staggered basis over 15 years.
The staggered option is practised in other countries facing a similar situation.
“The other option is to maintain the age of withdrawal for existing savings and offer the new withdrawal age for contributions working past 55,” said EPF chief executive officer Datuk Shahril Ridza Ridzuan
It is giving contributors two weeks to select one of two options starting tomorrow via the EPF website. Only one of the options will be used.
Shahril explained today that the proposals were designed to address issues related to the inadequacy of savings after retirement and to consider the interests of contributors in the long term.
According to EPF statistics, 78 per cent of active members at the age of 54 have not achieved basic savings of RM196,800 and 68 per cent at the age of 54 have savings of less than RM50,000.
Shahril recently spoke about the plan to extend the full withdrawal age to 60 which led to negative reactions from members, unions and politicians.
The other proposal is to adjust the minimum contribution in line with the minimum wage law. This would ease the burden of 30 per cent of members who are paid the minimum wage.
EPF is further suggesting a dividend payment extension for members who choose to keep their money with EPF from the age of 75 to 100 and the introduction of Syariah-compliant retirement savings.