EPF members who would like to maintain their monthly contribution at 11% from January 2021 can most likely do so by simply filling up a form to their employers.
According to The Star, these EPF members must inform the EPF of their intent through their employers, who will be required to submit a list of employees who wish to opt out from the reduced contribution exercise. It is also understood that the provident fund is currently working out a timeline with employers to submit this list.
This latest proposal to reduce the employees’ EPF statutory contribution rate to 9% – which is set to begin in January 2021 – was made with the intention to increase the take-home pay of EPF members. With this, it could alleviate some of the financial burdens faced by the public, as well as potentially increase consumer spending.
This 9% reduction is also not the first time that the government had lowered the contribution rate this year. Prior to this, the rate was reduced from 11% to 7% between 1 April to 31 December as part of the first economic stimulus package announced in February 2020. Members were also allowed to opt out from the 7% EPF contribution rate back then, if they wished to.
(Source: The Star)