EPF mulls introducing Account 3 for immediate withdrawals

KUALA LUMPUR: The Employees Provident Fund (EPF) is looking to introduce Account 3 which allows savings withdrawals to be made at any time.

EPF chief strategy officer Nurhisham Hussein said this was expected to be implemented for new contributors within two years.

According to Nurhisham, the proposed Account 3 will function like a savings account and members can withdraw their savings at any time.

He said the proposal to introduce the account was also to meet the potential emergency cash needs of members.

He added that the proposed Account 3 also aims to attract the interest of those in the informal sector to make contributions to the EPF.

"Account 3 will function like a savings account.

"With this, we hope to meet the potential emergency cash needs of members," he said during the EPF special media briefing virtually today.

On the savings rate allocated for Account 3, Nurhisham said it may involve between five per cent and 10 per cent.

He said with the flexible Account 3, the contribution percentage for Account 1 will also be increased and members will also have the option to transfer savings funds from Account 3 to Account 1 and Account 2.

Nurhisham also noted that the dividend for Account 3 is expected to be lower since the account functions like a savings account.

The current EPF savings scheme structure for members under the age of 55 consists of Account 1 and Account 2 with a percentage rate of 70 percent and 30 percent.

Previously, former finance minister Lim Guan Eng had proposed the establishment of a special EPF account, also known as Account 3, as part of the Malaysia@Work initiative to allow for flexible withdrawal.

The account was supposed to be rolled out in phases starting in the second quarter of 2020, but did not proceed as planned.

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