KUALA LUMPUR (Sept 30): The Employees Provident Fund (EPF) is raising the minimum target savings at age 55 to RM228,000, from RM196,800, effective Jan next year.

It is also raising the maximum amount members can invest under the EPF Members Investment Scheme (EPF-MIS), from the 20% in excess of their basic savings from Account 1 currently, to 30%.

The minimum target savings is the least EPF savings member should have — which is also referred to as the basic savings quantum — when they reach the age of 55, EPF said in a statement today.

"The basic savings refers to the amount that is considered sufficient to support members' basic retirement needs for 20 years, from age 55 to 75, aligned with the Malaysian life expectancy.

"The new quantum (refer to table) is benchmarked against the minimum pension for public sector employees, which has been raised from RM820 to RM950 per month, from age 55 to 75," it said.

The EPF Basic Savings quantum is revised periodically, according to the minimum pension for public sector employees, or every three years, whichever is earlier, with the last revision having taken effect in 2014, said Nurini Kassim, who is EPF's head of Corporate Affairs department.

“In view of the escalating cost of living, longer life expectancy and higher inflation rate, the EPF has made the decision to revise the Basic Savings upwards to RM228,000, from RM196,800,” said Nurini.

As such, members now have to have higher savings in their EPF account, to be eligible to participate in the EPF Members Investment Scheme (EPF-MIS). "The basic savings will be used as a guide for members to determine the amount permitted to be transferred for investment, under the scheme," she added.

"Before participating in the scheme, EPF members should read the prospectus and disclosure documents to fully understand the investment product, and should consult professional financial advisors. Members with i-Akaun can also refer to the EPF-MIS Information Portal for details on unit trust funds offered under the scheme, as well as the FMIs managing these unit trust funds," said Nurini.

Under the scheme, members can choose to enhance their retirement savings by placing a portion of their EPF savings in Account 1, to be invested in unit trust funds or via private mandate managed by the appointed Fund Managers Institutions (FMI), under the EPF-MIS.