Saturday October 20, 2012
EPF’s new move a big boon
By SOO EWE JIN and LOSHANA K. SHAGAR
PETALING JAYA: EPF members who have reached the age of 50 but do not want to withdraw all their entitled sum under Account 2 can just take out what they need, anytime they want to, in a one-off withdrawal.
It is a simple process where the member just need to present his identity card and a valid bank passbook at any of the EPF offices.
Normally, members take out the full amount under Account 2, which represents 30% of the their total savings, when they hit 50.
In recent years, however, there have been requests by members to make partial withdrawals to settle bills and also to go on holidays.
F.L. Lim said when she reached 50, she had about RM100,000 under Account 2.
“I wanted to keep most of the money there so that the dividend can be based on a higher amount,” she said. “But I wanted to take out a portion to settle my car loan and go on a holiday to New Zealand.
“I am glad that what I could not do two years ago, I can do so now.”
Public relations general manager Nik Affendi Jaafar said the option was made available recently following feedback from members who wanted to keep the bulk of their savings with EPF so as to enjoy the annual dividends that are above banks' fixed deposit rates.
He stressed, however, that members should be mindful that this was a one-off option. “Therefore, they must weigh all their options carefully before withdrawing,” he added.
Under Account 1, the savings are meant for retirement and cannot be fully withdrawn before the age of 55, become incapacitated, leave the country or die (payment will be made out to the nominee / heir).
Under Account 2, the savings are for early preparations for a comfortable retirement. Full/partial withdrawals are allowed prior to the age of 55 for the purposes of owning a house (the downpayment for the first house); settling the balance of housing loan for the first house; financing education for the member and that of the children; and medical expenses.
With this new option, members above 50 could also finance their child's education without having to file all the paperwork needed under the education withdrawal scheme.
Former factory worker A. Ramayee, 52, was delighted that she could now pay for her daughter's college education. “At least now I can consider taking out a certain amount while leaving the rest to grow in the fund.”
Marketing manager C.S. Liew, 50, said the move would benefit many in the 50 to 60 year age bracket as they would have more control over how much money they could retrieve at a certain age.
“Now that we can choose to take a partial amount instead of 30%, I can splurge on a holiday and still keep my remaining savings until I withdraw it after my retirement.”