A new pension-style withdrawal system under the Employees Provident Fund (EPF) will only apply to new members who register after the mechanism is implemented, according to Deputy Finance Minister Lim Hui Ying.

Speaking during a question-and-answer session in Parliament, Lim confirmed that existing EPF contributors will not be automatically enrolled in the new system. However, current members will have the option to opt in voluntarily if they wish to receive monthly retirement payouts under the revised scheme.

Revised Accounts to Support Monthly Retirement Income

The restructuring plan will introduce a mechanism that allocates part of a member’s savings to provide regular income during retirement. This structure is intended to improve long-term financial planning and strengthen income security for retirees.

Under the proposed system, a member’s savings will be divided into two portions when they reach the statutory retirement age. One portion will be available for flexible withdrawals, while the second portion will be disbursed as monthly or periodic income until fully utilised.

According to Lim, the revised structure aligns with the government’s goal to ensure retirement savings last longer, especially given the rising life expectancy in Malaysia. The initiative was first outlined in the 13th Malaysia Plan as part of broader policy commitments to improve social protection.

Current Members Will Not Be Affected Unless They Opt In

The monthly payout structure will not impact the existing withdrawal rights of current EPF members. Lim stressed that participation in the new scheme will be entirely optional for existing contributors.

Members who choose to retain the current lump-sum withdrawal model may continue to do so. The revised structure will only be automatically applied to individuals who become EPF members after the new framework comes into force.

Further details, including the official launch date and operational procedures, are expected to be released once the restructuring plan is finalised.

EPF Reports Lower Investment Returns in First Quarter 2025

Lim also addressed concerns raised in Parliament regarding EPF’s investment performance. For the first quarter ended 31 March 2025, the fund recorded a 13% decline in returns compared to the same period in 2024.

She attributed the drop to a range of external factors and stated that a recovery is expected in the second quarter. However, she did not provide further details on the specific causes behind the decline.

According to EPF data, equities contributed RM10.81 billion during Q1 2025, representing a 23% decrease from RM14.02 billion in Q1 2024. This was mainly due to weaker performance across global equity markets and a more challenging investment environment.

Despite the downturn, equities remained the largest source of income, contributing 59% of total investment earnings. Fixed income investments provided RM5.99 billion, or 33% of total returns, and continued to play a stabilising role in preserving capital.

Ensuring Long-Term Financial Stability for Members

Although investment returns dipped in early 2025, Lim reaffirmed the government’s commitment to protecting members’ long-term savings. She noted that the EPF maintains a diversified portfolio and prudent investment strategy aimed at weathering market fluctuations.

The introduction of a structured monthly income model, alongside consistent portfolio management, is part of a broader strategy to ensure that members can rely on the EPF for sustainable financial support throughout their retirement years.

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• TAGS:
• Employees Provident Fund
• EPF
• EPF Contributors
• EPF Investment
• Lim Hui Ying
• Restructuring