KUALA LUMPUR, April 25 — The Employees’ Provident Fund (EPF) announced today a restructuring of contributors’ accounts that would allow them to withdraw some portions of their fund starting May 11, in a much-anticipated move that has been both welcomed and criticised.

Under the restructuring, all contributors will have three accounts but withdrawal from the third account which is named “Fleksibel” will be optional.

All contributions after 11 May 2024 will be allocated into the new accounts as follows: 75 per cent into Akaun Persaraan, 15 per cent into Akaun Sejahtera and 10 per cent into Akaun Fleksibel.

Balances in Account 1 and Account 2 will remain in Akaun Persaraan and Akaun Sejahtera respectively, while Akaun Fleksibel will start with a zero balance.


Contributors can opt in to front-load into the flexible account. Those opting in will get a third of savings from account 2 or Sejahtera credited into the third account. Withdrawal allowed starting May 11.

No limit will be imposed for withdrawal, but it cannot be less than RM50 at a time. Contributors can choose to withdraw partially or all at once. Monthly contributions that go into the flexible account can also be withdrawn.

Contributors have until August 31 to choose whether they wish to front-load.


“The main focus of the EPF Account Restructuring initiative is to empower members in making decisions to balance future needs for retirement between short-, medium- and long-term financial needs,” EPF chief executive officer Ahmad Zulqarnain Onn said in a statement.

“This initiative will also help increase members’ retirement savings so that they will have sufficient retirement income to sustain their needs after retirement.”

For those with savings of less than RM3,000 in the second or sejahtera account, just RM1,000 will be credited into the flexible account. The same will be done for those with less than RM1,000 savings in the second account.

EPF said the difference in this distribution method is to enable members with a low savings balance to also have a meaningful initial amount in their flexible account.

Economist Zouhair Rosli said the move may not be ideal but necessary to assist the financially vulnerable.

“In an idealistic world, Account 3 should not be introduced. But in reality, it does help those vulnerable who need cash although the downside is that his or her total savings will reduce if there is regular withdrawal from Account 3,” he told Malay Mail.

“The positive thing is that the members will have to increase their retirement savings by 5 per cent from 70 per cent. This will help to boost the retirement savings in the long-run, especially from the younger members.”

Social security analysts have long raised the alarm about the size of EPF contributors that still have inadequate savings, and warn that the country could be staring into a severe retirement crisis if no intervention is made.

The fund revealed last year that up to 60 per cent of active contributors have less RM10,000 in their accounts, and under a fifth have adequate savings to meet basic retirement expenses, which EPF suggested would be around RM1,200 a month based on a very conservative estimate.

The projections did not account for inflation.

Zouhair suggested EPF's contribution restructuring exercise underscored the structural defect of an economy long bogged down by low wages.

"This arrangement in my view is optimal. First, we must remember that EPF is not a welfare body. EPF collects savings and generates dividends from our savings," he said.

"The most important things that need to be done now are not EPF withdrawals, but a higher and wider government assistance, and higher wages. These are the policy reforms that are needed at the moment." the economist added.

"The amount that we have in our EPF account is solely depending on the salary we receive every month. As long as the wages remain low, our retirement savings will also be low."