EPF Proposes Introduction Of Akaun 3 That Allows Flexible, Unconditional Withdrawals

Alex Cheong Pui Yin

12th July 2023 - 2 min read

The Employees Provident Fund (EPF) has said that it is considering the introduction of a new Akaun 3, which will function similarly to a savings account. Members will have the flexibility to withdraw any amounts at any time from this proposed account, thereby addressing possible cash flow concerns in the future, especially during times of emergencies.

Chief strategy officer of EPF, Nurhisham Hussein explained that the proposed Akaun 3 is primarily targeted at informal sector and own-account workers, and will be implemented for new contributors within two years if approved. However, existing members are also allowed to opt-in once the account is created, if they wish to.

In terms of contribution percentage, Nurhisham explained that about 5% to 10% of a member’s monthly EPF contribution will be allocated for Akaun 3 if they opt in – slightly lower than the other accounts as it is supposed to serve as an emergency fund. There is also a possibility that the EPF may increase the contribution percentage for Akaun 1, and give members the option to transfer their funds from Akaun 3 to Akaun 1 and 2 if they wish. Similarly, those who sign up for Akaun 3 may also be able to transfer their savings from Akaun 1 and 2 to Akaun 3, after which they can make withdrawals without any conditions.

To note, the current EPF contribution structure requires members’ monthly contribution to be split between Akaun 1 and 2 with a ratio of 70% and 30%, respectively.

Additionally, this is not the first time that the introduction of a special Akaun 3 has been mooted. Back in 2019, former finance minister Lim Guan Eng had also suggested the launch of a special EPF account (Akaun 3) as part of the Malaysia@Work initiative, which allowed flexible withdrawals as well. It was originally slated to be rolled out in stages during the second quarter of 2020, but unfortunately did not come to realisation.

(Sources: New Straits Times, The Edge Markets)

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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.

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