According to The Star, the Employees Provident Fund (EPF) has revised higher the minimum basic savings target for retirement at age 55 to RM240,000, effective Jan 1, 2019.

The basic savings target, which shows the amount considered adequate to support EPF members' basic needs for 20 years upon retirement, was then set at RM228,000 in 2017. 

According to a statement, the EPF said the new quantum is benchmarked against the minimum pension for public sector employees, which was raised from RM950 to RM1,000 per month.

“The EPF Basic Savings quantum is revised periodically according to the minimum pension for public sector employees, or every three years, whichever earlier, with the last revision having taken effect in 2017," said Balqais Yusoff, EPF head of strategy management department.

In 2016, the minimum basic savings target was RM196,800, which is about RM820 per month.

Accordingly, members will now be required to have higher savings in their EPF account to be eligible to participate in the EPF Members Investment Scheme.  

The scheme provides members with an option to have a portion of their EPF savings in Account 1 invested in unit trust funds or via private mandates managed by the appointed Fund Managers Institutions (FMI).

EPF new basic savings schedule according to age

Established in 1951, The EPF is intended to help employees from the private sector save a fraction of their salary in a lifetime banking scheme, to be used primarily as a retirement fund but also in the event that the employee is temporarily or no longer fit to work. The EPF also provides a framework for employers to meet legal and moral obligations to their employees.

As a retirement plan, money accumulated in an EPF savings can only be withdrawn when members reach 50 years old, during which they may withdraw only 30% of their EPF; members who are 55 years old or older may withdraw all of their EPF.

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