KUALA LUMPUR (Oct 13): The government will introduce a flexible account for Employees Provident Fund (EPF) contributors which they can access at any time, said Prime Minister Datuk Seri Anwar Ibrahim.

The new account is being introduced as part of efforts to restructure EPF accounts to empower retirement savings, said Anwar when tabling Budget 2024 in the Dewan Rakyat on Friday.

The EPF currently has two accounts, namely Account 1 which cannot be accessed until retirement, and Account 2, where funds can be withdrawn for purposes such as education or payment for housing.

Mandatory contribution from employee and employer is split 70:30 between Accounts 1 and 2.

It was reported in July that the EPF is mulling the setting up of a third account that is accessible anytime, with the roll-out expected in the next two years. Plans for an Account 3 have been mooted as far back as 2019, but it did not materialise as per its scheduled timeline of 2Q2020.

EPF, a retirement fund for private sector employees, is among the government-linked investment institutions offering higher dividends, with a 2022 payout of 5.35% (conventional) and 4.75% (shariah).

Other such government-linked funds include Permodalan Nasional Bhd (PNB), which operates Amanah Saham Bumiputera (ASB) and Amanah Saham Nasional (ASN), as well as pilgrim fund Lembaga Tabung Haji.

Meanwhile, Anwar said wives will also be allowed to transfer a 2% share of employees' contribution to their husbands' accounts under the i-Sayang initiative.

The EPF introduced i-Sayang six months ago to enable husbands to voluntarily transfer 2% of their EPF monthly contributions to their wives' accounts for their welfare.

Announcing a slew of social protection measures, Anwar said matching contributions from the government will also be adjusted to RM500 annually under the i-Saraan programme, and RM300 annually under i-Suri, with lifetime caps of RM5,000 and RM3,000 respectively.

Prior to this, i-Saraan annual matching contribution amounted to RM250 in 2018-2022, and RM300 in 2023.

As for i-Suri, the initial matching contribution was RM200 in 2018, before being raised to RM480 in the subsequent years.

For gig workers, Anwar said the government support for the self-employed social protection scheme (SKSPS) is raised to 90% of the contribution sum, from 80% previously, through an allocation of RM100 million.

“I urge companies to take on the balance 10% contribution for gig workers. I am sure platform operators care for the wellbeing of their employees,” the prime minister said.

Other new measures under the social protection agenda include an increase in the monthly wage ceiling for Social Security Organisation (Perkeso) to RM6,000 from RM5,000, which will result in cash benefits of 20.2% for the 1.45 million employees under coverage.

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