The Employees Provident Fund (EPF) has clarified that the recently proposed mandatory monthly withdrawal will only apply to new members born 2010 onwards, who register with the provident fund after its implementation. Existing members, meanwhile, will continue to be able to make lump-sum withdrawals when they reach their retirement age of 55 and 60.

“The first payout under the mandatory [monthly withdrawal] option is only expected to be made when these new members retire, some decades in the future. This proposal is still being refined, and the EPF assures that any decision regarding the mandatory monthly withdrawal option will only be made with careful consideration and alignment with the EPF’s commitment to the best future interests of its members,” the EPF further said in a statement.

The provident fund also noted that the proposed option will bring Malaysia in line with widespread global practice as many other countries have already switched to a regular payout arrangement. Meanwhile, Malaysia remains one of the very small minority that continues to allow lump sum withdrawals.

For context, current EPF members are also allowed to voluntarily opt in for a monthly withdrawal option if they wish to do so. It was previously highlighted that more than 7,000 members have done so as of 2022.

Meanwhile, the chief executive officer of EPF, Datuk Seri Amir Hamzah Azizan had emphasised before that the adoption of the monthly withdrawal option will help members to manage their retirement funds more effectively, thereby preventing old-age poverty. The option involves converting a portion of members’ EPF savings into monthly income, which will then be disbursed to them on a monthly basis. The remaining portion, meanwhile, can be withdrawn as a lump sum.

(Source: EPF)

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• Employees Provident Fund (EPF)
• EPF
• EPF Monthly Drawdown