The proposed monthly pension payout scheme under the Employees Provident Fund (EPF) will apply only to new members once implemented, said Deputy Finance Minister Lim Hui Ying.
Lim clarified that existing members’ withdrawal rights will remain unchanged, although they may voluntarily opt into the new structure if they wish.
Under the proposal, future EPF contributions would be divided into two separate components:
- Flexible savings, which can be withdrawn at any time; and
- Income savings, which would be disbursed in monthly instalments after retirement until fully utilised.
“This is merely an initial proposal. The Madani government is committed to listening to public feedback and engaging extensively with all stakeholders before making any decisions,” she wrote in a Facebook post.
Lim added that the objective of the reform is to help Malaysians manage their retirement funds in a more structured, equitable, and sustainable manner.
According to the 13th Malaysia Plan tabled last Thursday, the current system allows members to withdraw their full EPF savings upon reaching the age of 55. The government is now exploring a hybrid approach, combining a monthly payout with a lump-sum withdrawal, to provide retirees with a more stable post-retirement income stream.
EPF confirmed that the plan is still under review and assessment, and any decision will be made after comprehensive consultations with stakeholders to safeguard members’ long-term interests.
Currently, EPF savings are distributed across three accounts:
- Account 1 for retirement;
- Account 2 for specific pre-retirement needs; and
- Account 3 for flexible, short-term withdrawals.
The EPF has consistently delivered one of the highest dividend returns among government-linked investment entities, declaring a 6.3% payout for both conventional and Shariah-compliant accounts in 2024.
