As part of the 13th Malaysia Plan tabled last week, the government proposed a monthly pension payout of the Employees Provident Fund (EPF / KWSP). The Finance Ministry has since clarified that existing members will not be forced to switch to the new system. Those who prefer said system can switch to it voluntarily.
The Edge cites Deputy Finance Minister Lim Hui Ying as telling Parliament “the proposal will only apply to new EPF members who register after the policy is implemented”. Of course, it’s a big if, as the proposal is still being considered.
Should it go through, not the entirety of members’ retirement fund will be paid out monthly. Instead, the EPF contributions will be split into two, retaining a portion that can be accessed at any time. This portion will still allow for lump sum withdrawals.
When it was tabled last week, the proposal was made to improve financial security after retirement. At the same time, the government also considered raising the mandatory retirement age. The report notes that this is part of measures being taken to prepare for the country’s transition into an aged nation. This is predicted to happen by 2043, when over 7% of the population is aged 65 or older.
(Source: The Edge)
