EPF: Applications For Akaun 2 Support Facility To Open On 7 April

Alex Cheong Pui Yin

4th April 2023 - 5 min read

The Employees Provident Fund (EPF) has announced that it will open applications for the Akaun 2 Support Facility starting from 7 April 2023. The provident fund also released key details regarding the implementation mechanism, as well as the terms and conditions to use the facility.

In a statement, the EPF said the Akaun 2 Support Facility will allow struggling EPF members below the age of 55 to use their Akaun 2 balances as support to apply for personal financing of up to RM50,000 from participating banking institutions (currently includes MBSB Bank and Bank Simpanan Nasional). Essentially, they are required to submit an advance notice of Age 50 or Age 55 Withdrawal, specifying that their Akaun 2 savings will be used to help repay the loan taken out when the member reaches the age of between 50 to 55.

Members must have a minimum amount of RM3,000 in their EPF Akaun 2 in order to tap into the facility, and they’re allowed to opt for a repayment tenure of up to 10 years. Meanwhile, the interest or profit rate charged for loans made under this facility will range between 4% to 5% – considerably lower than the market rate of 8% to 15%.

The EPF also noted that the facility will be implemented in two phases, with Phase 1 set to begin first for eligible members aged 40 years and above. Applications will remain open for one year. Meanwhile, the starting date for Phase 2 – for members aged 40 years and below – will be announced at a later date.

The EPF also explained as to how the facility will assist members in repaying their loans taken out under the facility. Specifically, if a member decides to apply for an advance notice for Age 50 Withdrawal, the EPF will disburse the amount in his or her Akaun 2 (principal and accumulated dividend) into the financing account with the bank at any age between 50 and 54, as chosen by the member – thereby repaying the loan. This is subject to the maximum tenure of up to 10 years.

Meanwhile, if the member opt for Age 55 Withdrawal, the EPF will pay the principal and accumulated dividend from Akaun 2 into their financing account with the bank at the age of 55. The amount disbursed will be prioritised to repay any remaining personal financing balance; excess cash will then be returned to members.

However, if a member is able to fully settle their personal financing at an earlier date on their own (without needing to use their Akaun 2 savings to repay the loan taken out), they can then contact the EPF to rescind their advance notice of Age 50 or Age 55 Withdrawal. This way, the amount applied for withdrawal can be utilised for other pre-retirement withdrawals instead.

“This facility is targeted towards EPF members who have savings in Akaun 2 and are supported with a reasonable income to ensure they can afford the financing and repay it without compromising their retirement income adequacy and security. It offers a practical solution for EPF members who are facing temporary liquidity issues by providing cash flow through personal financing, but with minimal impact to their retirement savings,” said the EPF, adding that members will continue to receive annual EPF dividend, and as such, can take advantage of the power of compounding interest to grow their retirement funds.

If you’re eligible for Phase 1 of the Akaun 2 Support Facility and would like to apply for it, these are the few steps that you need to take:

Check your eligibility on this dedicated website (set to go live on 5 April 2023)
Once your eligibility is confirmed, speak to participating banks to apply for the personal financing under the Akaun 2 Support Facility
Submit an advance notice of Age 50 or Age 55 Withdrawal to the EPF via the bank’s portal, based on the amount of personal financing that has been approved by the bank

Note that once your application is submitted and approved, you cannot cancel it. The EPF also encouraged members to register or update their mobile phone numbers via the self-service terminals (SST) at any EPF branch before proceeding with their applications. This is to ensure that they can receive the transaction authorisation codes (TACs) required for verification when conducting transactions.

Members who have enquiries regarding the Akaun 2 Support Facility can call the EPF contact management centre at 03-8922 6000. Alternatively, they can visit the EPF website for more information.

The Akaun 2 Support Facility was proposed by Prime Minister Datuk Seri Anwar Ibrahim in March 2023, as an alternative to yet another EPF withdrawal in a bid to help individuals who are still struggling financially from the impact of Covid-19. Datuk Seri Anwar, who is also the Finance Minister, is adamant that the government should not allow another EPF withdrawal as the retirement savings of certain segments in the society are already significantly depleted from previous pandemic-related withdrawals.

(Source: EPF)

4.2 6 votes

Article Rating

Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

See all articles