Longer wait for next EPF withdrawal under account 2

Published on: Tuesday, April 19, 2022

By: K Parkaran, FMT

Text size:

EPF says it has received 5.3 million applications amounting to RM40.1 billion under the new special withdrawal facility, just two weeks after applications opened.

PETALING JAYA: Members of the Employee Provident Fund (EPF) whose Account 2 has been liquidated following exceptional levies will have to wait much longer before being able to withdraw their savings for housing, treatment or study. This involves those who were forced to withdraw their money from account 1 to top up what was left in the other account to make RM10,000, or take the full amount from the first account. Account 1 is for retirement savings, while money in Account 2 can be used for medical expenses, college education for self and children, and buying a home.

Currently, 70% of the monthly contributions are placed in account 1 and the rest in account 2. According to EPF, there is an “additional contribution of 20%” to the amount withdrawn which will be placed in account 1 from their contributions monthly. “However, for those who had made the special withdrawal of RM10,000, all their monthly contributions will be paid into account 1. “It will only stop after the RM10,000 plus 20%, which will be 2,000 RM, go back to Account 1. Only then will it be split again into 70% and 30%,” he said in his Special Withdrawal FAQ. So, if the total monthly contribution to EPF is RM500, everything will go into account 1 for two years (a total of RM12,000), before the 30% is redirected to account 2.

Since this concerns all special withdrawals, those who had also withdrawn in the past using this facility will have to wait much longer as their total withdrawals would have been much higher. EPF said the rationale for this decision is to ensure they have enough after retirement by replenishing their account 1. “The 20% is based on the estimated dividend loss of an average of 5% per year , the reconstitution should take four years, “he said. This is to ensure that their retirement savings are refortified and that they benefit from the dividend payments like the others. On April 15, EPF has announced that it had received 5.3 million applications amounting to RM40.1 billion under the Special Withdrawal Facility, just two weeks after applications opened.

Payments started yesterday and withdrawal requests under this program will close on April 30.
* Follow us on Instagram and join our Telegram and/or WhatsApp channels for the latest news you don’t want to miss.

* Do you have access to the Daily Express electronic newspaper and exclusive news online? See available subscription plans.

Longer wait for next EPF withdrawal under account 2 | Daily Express Online