KUALA LUMPUR, April 25 — The Employees Provident Fund (EPF) much-talked-about Account 3, known as Akaun Fleksibel was announced today and EPF’s 16.07 million members are free to decide if they want to move the funds there, said EPF chief executive officer, Ahmad Zulqarnain Onn.

Akaun Fleksibel is a new account that provides flexibility for short-term financial needs, where savings in this account can be withdrawn at any time according to members’ needs.

The EPF said starting May 11, 2024, all EPF members under the age of 55 will have their accounts restructured into three accounts, namely Akaun Persaraan, Akaun Sejahtera and Akaun Fleksibel.

Balances in Account 1 and Account 2 will remain in Akaun Persaraan and Akaun Sejahtera, respectively, while Akaun Fleksibel will start with a zero balance.

Between May 11 and August 31, 2024, members aged 55 years and below will have a one-time option to transfer part of their savings in their Akaun Sejahtera (previously Account 2) as an initial amount to Akaun Fleksibel.

If the member does not choose to opt-in, no transfer will be made and the existing balance will remain in Akaun Sejahtera, the EPF said in a statement today.

For all those who opt in, allocation into the new accounts will be as follows: 75 per cent into Akaun Persaraan, 15 per cent into Akaun Sejahtera and 10 per cent into Akaun Fleksibel.

Previously, EPF members’ savings would be credited into Account 1 and Account 2, where 70 per cent of their contributions would go into Account 1, and 30 per cent into Account 2.

"We encourage people not to do so (opt-in) because it is important to save for old age, but we understand that flexibility is desired and from time to time you need to access your savings to pay for unexpected expenses,” Ahmad Zulqarnain said during the editors briefing ahead of the announcement today.

The initiative is not just EPF’s response to current needs but is also a proactive step to help members in facing the changing job landscape and demographics of the population.

He said if every EPF member decides to opt in, the total fund that would be moved to Account Fleksibel will amount to RM57 billion, of which about RM25 billion is expected to be withdrawn in the first year.

No impact on the EPF’s portfolio, dividend for Account Fleksibel could differ in future

The setting up of the new account will not have an impact on the provident fund’s portfolio, he said.

For comparison purposes, total withdrawals during the pandemic amounted to RM145 billion.

"The current scenario is much different from during the pandemic and our portfolio is now much bigger. Hence, the impact of withdrawals through the new account is expected to be muted,” he said.

Going forward, it is estimated that withdrawals from Akaun Fleksibel will amount to between RM4 billion and RM5 billion yearly, said Ahmad Zulqarnain.

Dividends will remain the same across all three accounts. However, this could change in the future as liquid assets — by default — do not attract higher interest rates or dividends, he explained.

Akaun Fleksibel withdrawal

Members can make withdrawals from Akaun Fleksibel at any time for any purpose, subject to a minimum withdrawal amount of RM50.

Applications for withdrawals from Akaun Fleksibel can be made online through KWSP i-Akaun or at any EPF branches nationwide, he said.

Members who have yet to register with KWSP i-Akaun are encouraged to do so in order for them to withdraw from their Akaun Fleksibel.

As for Akaun 55 and Akaun Emas, similar to the current practice, all savings in Akaun Persaraan, Akaun Sejahtera, and Akaun Fleksibel of members who have reached age 55 will be merged into Akaun 55.

New contributions received by members from the age of 55 will be credited to Akaun Emas. — Bernama