Petaling Jaya: With the increase in the annual voluntary contribution limit of the Employee Provident Fund (EPF) from RM60,000 to RM100,000, the EPF will receive savings from social security institutions that help workers save for retirement. and transformed into an investment institution. Dr. Barjoyai Bardai, an economist at Tun Abdul Razak University.
He said that since the establishment of the EPF in 1951, employees have been required to contribute 11% of their earnings to the pension fund, whereas employers have required employees to contribute 13% to savings below RM5,000, or RM5 We paid 12% for over 1,000 employees.
“Now the role of the institution has changed. An increase in the voluntary contribution limit will allow employees or informal workers to earn more savings, with a dividend of about 5% of conventional and Shariah savings. It can be enjoyed annually, as is the investment bank Permodalan Nasional Berhad (PNB) and Tabung Haji.
“However, unlike existing savings and investment institutions, employees and temporary workers can only withdraw 30% of their deposits from Account 2, whereas Account 1 limits withdrawals until the account holder reaches the age of 50. It has been.
“Last year the dividend rate for conventional savings was 5.35% and for Shariah savings was 4.75%, which is higher than Tabun Haj (2.75% to 3.1% forecast) and PNB (4.6%), making EPF savings a reliable investment institution. became,’ he said. Sun.
Mr Barjoyai said the increase in the voluntary contribution limit would also benefit the EPF, which has more money to invest.
He proposed expanding the scope of the EPF to include citizens of all ages.
“Under Rahmah’s Malaysian tick concept, the EPF should introduce a public contribution scheme for health where account holders can contribute a certain amount to the endowment fund.
“Account holders, regardless of whether they have contributed to the fund, can withdraw certain sums to cover life-threatening hospital bills, treatments and surgeries under certain conditions set by the EPF. I should,” he said.
In authorizing an increase in the annual cap on the EPF’s voluntary contributions, Prime Minister Datuk Seri Anwar Ibrahim stressed the changing employment landscape, which saw an increase in informal jobs and jobs that could generate large but inconsistent incomes. said to be in line with
“The effective date for implementation of this improvement will be (announced) by the EPF in the near future,” he said in a written reply to Datuk Seri Mohd Shafie Apdal in parliament.
According to Anwar, the government is offering an additional contribution of RM500 to about 2 million members of the target group, i.e. members between the ages of 40 and 55 and those with savings of RM10,000 or less in Account 1. increase. Members with lower savings accelerate their retirement savings accumulation.
To facilitate and encourage members’ voluntary donations, the EPF has introduced a new feature to the app to seamlessly pay members’ voluntary donations to i-Akaun from July 2022, Anwar said. said.
“With the addition to the app, EPF has been well received, with over 315,702 members using the feature as of January 31, with a total donation of RM527,700,000.”
“Self-employed persons under the age of 60 who do not have a regular income or are outside the scope of the labor force, such as housewives, can always choose to contribute voluntarily according to their abilities under the i-Saraan program.
“As an incentive to encourage this group to save under the i-Saraan, the Government will provide a contribution of 15% of total contributions, subject to annual incentive caps, Budget 2023.
“Last year, a total of 291,743 members made voluntary donations under the i-Saraan program and a total of RM33,210,000 of government incentives were credited to Akaun 1 of the members.
“Apart from that, members can add to the retirement savings of their spouse, parents or children who are EPF members at any time. At the same time, third parties such as approved individuals and institutions can also contribute to EPF members. .”
