The Employees’ Provident
Fund is especially important to Malaysians as it will help take care of them in retirement.
Whether it's simply to live our remaining years or to take long-awaited vacations; our retirement is mostly funded through our EPF.
However, lately, there has been concerns that the pot may not be enough for most people's retirement. In light of this, EPF has come up with new rules that will be implemented in the year 2014.
Minimum EPF savings raised
The new EPF rules, effective January 2014, will raise the minimum savings for its contributors from RM120,000 to RM196,800 by the age of 55. The revised rules, according to EPF general manager, Nik Affendi Jaafar, are to ensure enough savings to finance members’ retirement needs.
The new rule is definitely good for retirement as it helps ensure one will have enough to survive on later on. However, the raise in minimum savings will affect the unit trust industry as well as EPF members who wish to invest in unit trusts.
The revised rule
will result in members needing to have more in their Account 1 to be eligible
for the EPF Members Investment Scheme where savings are invested in unit
trusts. As such, EPF members who are eligible to invest in unit trusts might
not be so come January 2014.
Further reaching effects are at the moment unknown but it will be interesting to see what creative solutions the unit trust industry will device to counter possible shortfalls in investing.
*Picture courtesy of Borneoinsider.com.