KUALA LUMPUR (Oct 7): The government has raised the cap for voluntary retirement contribution for Employees Provident Fund (EPF) contributors to RM100,000, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.
The proposal comes as EPF also reported its very first negative net contribution in two decades last year at RM58.2 billion, as members tapped into the retirement fund to offset the financial strain caused by the Covid-19 pandemic.
The current limit of voluntary contribution is RM60,000.
It is estimated that contributors cashed out some RM145 billion in 2020, 2021 and 2022 through various Covid-19 special withdrawal programmes, namely i-Lestari, i-Sinar, i-Citra, as well as the special one-off withdrawal of RM10,000. The fund also saw RM10 billion savings losses incurred by employees that had opted to have their monthly contributions rate reduced from 11%.
These emergency measures resulted in 6.1 million EPF members having less than RM10,000 left in their accounts and 2.6 million members having less than RM1,000 left in their retirement savings.
EPF made a total 2021 dividend payout of RM56.72 billion — 6.1% for conventional portfolio with a payout of RM50.45 billion and 5.65% for shariah portfolio with a payout of RM6.27 billion.
The government will also expand the tax relief for life insurance premiums or life-takaful contributions to include EPF voluntary contributors by up to RM3,000, Zafrul said when tabling Budget 2023 in the Dewan Rakyat.
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