This is a press statement released by the Employees Provident Fund (EPF) yesterday. I shall comment on parts of this statement later when more details are available:
About 11.4 million Employees Provident Fund’s (EPF) members are expected to benefit from a comprehensive plan which will promote savings and enable members to have more funds to cover their basic retirement needs.
The ‘Beyond Savings’ initiative, which is essentially a new benefit structure provided by the amendment of EPF Act 1991 to enhance retirement savings of all members, involves new provisions for the EPF’s contribution and withdrawal benefits. The initiative will be introduced in stages from November 2007 till June 2008. Through these changes, members will also be given more choices and greater flexibility to manage their EPF savings.
The changes include the introduction of more flexible withdrawal options for members after age 55, to extend the liability to contribute to the EPF beyond 55 years up to 75 years; and the introduction of basic savings in members’ Account 1 to give members an opportunity to invest at an earlier age.
The ‘Beyond Savings’ initiative is prompted by the EPF’s desire to enhance financial security in retirement in the light of inflation, a weakening extended family system, longer life expectancy and escalating medicals costs.
“The EPF’s main concern is the adequacy of savings for members during their retirement years as the average retirement savings for EPF members currently is inadequate. With Malaysians having a longer life span as well as inflation and escalating medical costs, many members may find themselves with insufficient funds if the issue of adequacy of savings is not addressed now,” said Datuk Azlan Zainol, Chief Executive Officer of EPF
“It is against this background that the EPF has taken the lead to introduce ‘Beyond Savings’. As a progressive and member-focused organisation, the EPF is constantly reviewing its benefits and schemes to ensure that the organisation remains relevant to the needs of its members,” he said.
Datuk Azlan added that these changes to the contribution and withdrawal will ensure a healthier level of savings for EPF members. He also added that these changes are a continuation of initiatives begun in 2000 to enhance customer service and delivery for its members.
Underpinning all these changes is EPF’s commitment to a faster and more efficient service delivery. The changes will also help to realign the EPF with its objective as a national social security organisation and to be more relevant to the changing demands of its members.
About the Employees Provident Fund (EPF)
The Employees Provident Fund (EPF) is a national savings scheme, providing basic financial security for retirement. The Fund is committed to preserving and growing the savings of its members in accordance with best practices in investment and corporate governance. It will always be guided by prudence in its investment decisions.
As a customer-focused organisation, the EPF delivers efficient and reliable services for the convenience of its members and registered employers.
The EPF continues to play a catalytic role in the nation’s socio-economic growth, consistent with its position as a leading savings institution in Malaysia.
Date: 22 October 2007