Key Changes Made in EPF (3)

G. CONTRIBUTION

I) EXTENSION OF LIABILITY TO CONTRIBUTE FROM AGE 55 TO 75 YEARS

Objective:

• To encourage members to continue to work after 55 years to enhance their retirement savings.
• Employees are liable to contribute to EPF up to age 75 years.

Before 1 February 2008:

Upon full withdrawal, employees cease liability to contribute but may elect to contribute.


II) TWO TIER CONTRIBUTION RATES

Objective:

• To encourage continued employment for employees after age 55 and avoid burdening employers and employees with high contribution rate.

Employees below age 55 years:

• 11% by employees and 12% by employers.

Employees from age 55 years to 75 years:

• 50% of statutory rate of contribution of employees below age 55 ( 5.5 % by employees and 6% by employers)

Note:

Voluntary contribution: Self-employed and others (Minimum RM50 & Maximum RM5,000).

Contribute in excess of statutory rate: employees or employers or both may choose to contribute in excess of 23% monthly.


III) DIVIDEND PAYMENT UP TO AGE 75 YEARS

Objective:

• To encourage members after 75 years to withdraw their savings.

Savings not withdrawn after age 75 years shall be transferred to the Registrar of Unclaimed Monies after 5 years, that is, at age 80.

Before 1 February 2008:

• Dividend paid on all savings managed by the EPF
• Savings not withdrawn will remain with the EPF.

H. CRITICAL ILLNESS INSURANCE POLICY WITHDRAWAL

Objective:

• To provide some insurance protection for critical illness.

A member can withdraw savings from Account 2 to purchase a Critical Illness Insurance Policy for himself and immediate family members through the Critical Illness Insurance Policy Withdrawals scheme.