EPF Account 3: Akaun Fleksibel

Employees’ Provident Fund (EPF) is going to restructure its members’ accounts starting 11 May 2024. It is going to introduce Account 3 which allows flexible withdrawal. Hence, a member’s account will increase from two accounts to three accounts. This exercise involves all EPF members under the age of 55. 

Current account structure

Currently, a member’s account is made of up Account 1 and Account 2, which holds 70% and 30% of the balance respectively .

New account structure

The existing Account 1 will become “Akaun Persaraan” and Account 2 will become “Akaun Sejahtera” with no change in the purpose of both accounts. Akaun Persaraan accumulates savings that will serve as income during retirement. Akaun Sejahtera addresses life cycle needs that contribute to wellbeing during retirement.

The new EPF Account 3 is “Akaun Fleksibel“. Savings in this account can be withdrawn by members, subject to terms and conditions. This account provides flexibility for short-term financial needs.

After the effective date (11 May 2024), new EPF contributions will be credited according to the ratio of 75:15:10. 75% of the contribution will go into Akaun Persaraan, 15% into Akaun Sejahtera, and 10% into Akaun Fleksibel.

EPF account 3: Akaun Fleksibel

Akaun Fleksibel will start with a zero balance. Between 11 May 2024 and 31 August 2024, members will have a one-time irrevocable option to transfer part of the savings balance in their Akaun Sejahtera (previously Account 2) as an initial amount to Akaun Fleksibel. If the member does not choose to opt-in for an initial amount, the existing balance will remain in Akaun Sejahtera. 

If you choose to opt-in for an initial amount, the transfer of the initial amount to Akaun Fleksibel and other accounts (if applicable) is based on the balance in your Akaun Sejahtera on the date the opt-in application is made. You can submit your application through the KWSP i-Akaun application or the Self-Service Terminals at any EPF branches nationwide. The transfer method is according to the breakdown as below:

1. Balance in Akaun Sejahtera is RM3,000 and above: 

1/3 moves to Akaun Fleksibel;

1/6 moves to Akaun Persaraan; and

1/2 stays in Akaun Sejahtera.

2. Balance in Akaun Sejahtera below RM3,000:

No distribution will be made to Akaun Persaraan. There are two scenario:

Scenario 1: RM1,000 and below, all amount moves to Akaun Fleksibel.

Scenario 2: More than RM1,000 but less than RM3,000, the amount transferred to Akaun Fleksibel is RM1,000. The remainder stays in Akaun Sejahtera.

Akaun Fleksibel withdrawal

Members can make withdrawals from Akaun Fleksibel at any time for any purpose. The minimum withdrawal amount is RM50. We can make applications for withdrawals online through KWSP i-Akaun or at any EPF branches nationwide.

Dividend

For the time being, the dividend rate for Akaun Fleksibel will be the same as the other two accounts. However, the dividend rate for this Account 3 might be lower in the future due to the liquidity that it affords.

If you want to learn more about the dividend history of EPF, click here.

Transfer from EPF Account 3

EPF also provides the facility to transfer the members’ savings. Savings transferred cannot be reversed into the original account. Three types of transfer allowed are:

1. Akaun Fleksibel to Akaun Sejahtera.

2. Akaun Fleksibel to Akaun Persaraan.

3. Akaun Sejahtera to Akaun Persaraan.

Members can submit a contribution transfer application at any EPF counter by completing the “Borang Pindahan Simpanan Ke Akaun Persaraan/ Akaun Sejahtera”. This would be useful when the dividend rates differ between the three accounts.

Akaun 55 and Akaun Emas

Similar to the current practice, all savings in Akaun Persaraan, Akaun Sejahtera, and Akaun Fleksibel of members who have reached age 55 will be merged into Akaun 55. New contributions received by members from the age of 55 will go into Akaun Emas.

What I will do

Since the dividend rate for all three accounts will be the same for the time being, I plan to opt in to transfer the balance in my Account 2. Thus, I will have some extra cash at my disposal. I plan to use the money in Akaun Fleksibel for investment only. However, if the dividend rate drops in the future, I will transfer the balance in Akaun Fleksibel back to Akaun Persaraan or Akaun Sejahtera.

Depending on your personal circumstances, it might be better to leave the money in Akaun Sejahtera. There is no right or wrong answer as it all depends on the individual. What will you do with this account restructuring? Will you opt in to transfer your balance in Account 2? Let me know in the comments section below.

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Disclaimer: This post is for informational purpose only. You should use judgment and conduct due diligence before taking any action or implementing any plan suggested or recommended in this article.