Longer Wait Time for Next EPF Withdrawal Under Account 2

Employees Provident Fund (EPF) members who have wiped out their Account 2 after the special withdrawals will need to wait a little longer before they can withdraw their savings to use for medical expenses, housing or studies.

This includes members who were forced to withdraw their money from Account 1 to top up what was left in Account 2 to make it RM10,000 or take out the entire amount from the first account.

Account 1 is meant for retirement savings, while members can use money from Account 2 for the purchase of homes, medical expenses and tertiary studies for themselves and their children.

As of now, 70% of the monthly contributions are put in Account 1 and the rest in Account 2. 

Full monthly contributions in Account 1 for special withdrawal applicants

According to EPF, there's a 20% additional contribution to the amount taken that it will place in Account 1 from the members' monthly contributions.

However, members who had applied for the special withdrawal of RM10,000 will have all of their monthly contributions placed in Account 1. It will stop only after the members' have set RM10,000 and the 20%, which will be RM2,000, back into their Account 1. After that, the amount will be split into 70% for Account 1 and 30% for Account 2 again. This information is based on EPF's special withdrawal FAQ page.

If a member's total monthly EPF contribution is RM500, all of it will be placed in Account 1 for two years (with a total of RM12,000) before the 30% is channelled back into Account 2.

As it includes all special withdrawals, members who had also withdrawn in the past using this facility must wait longer because their total withdrawals would have been a lot higher. 

Ensuring EPF members have enough for retirement

EPF stated the cause for this move is to ensure its members have enough when they retire by prioritising and replenishing their Account 1.

It said that the 20% is according to the estimated loss of dividend of an average of 5% per annum, with the replenishment predicted to take about four years. It added that this move will ensure the members' retirement savings are refortified, and they enjoy the dividend payouts like everyone else.

On April 15, EPF declared that it had accepted 5.3 million applications which amounted to RM40.1 billion under the special withdrawal scheme, just two weeks after it opened for applications. 

The special withdrawal payouts started yesterday, and applications for withdrawals under this scheme will end on April 30.

You can read more about the EPF special withdrawal FAQ here.

Source: FMT