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The government is studying a proposal to introduce a new Employees Provident Fund (EPF) account structure that would come into effect once members reach the minimum retirement age
According to Bernama, Deputy Finance Minister Lim Hui Ying told the Dewan Rakyat earlier this week that the proposed system aims to better manage retirement funds by dividing members' savings into two parts.
There will be two components under the proposed structure
Under the proposal, EPF savings would be split into:
- Flexible savings, which members can withdraw at any time according to their needs.
- Retirement income savings, which would be distributed periodically or monthly until the balance is fully used up.
"This new structure will only apply to new members who register after the implementation date. Once implemented, existing members who wish to opt in may also be allowed to do so," Lim said during the oral question-and-answer session in the Dewan Rakyat.
She clarified that the current withdrawal rules will not change, meaning members can still access their savings in a lump sum, partially, or through scheduled withdrawals at ages 55 and 60.
The proposal is still under review
Lim said the government has yet to finalise the details and will only decide after consulting stakeholders and considering the long-term interests of contributors.
She was responding to a supplementary question from Pakatan Harapan's Tebrau member of parliament (MP) Jimmy Puah Wee Tse, who asked about the government's plans to re-evaluate existing EPF withdrawal methods.
The deputy finance minister also shared that most Malaysians are still below the basic savings benchmark
Lim said only 23.9% of EPF members aged 18 to 65 have met their age-specific basic savings level, mainly because almost half of all members are inactive contributors.
Among active, formally employed members, 38.8% of those aged 18 to 55 have reached the basic savings target, an improvement from 30.4% at the end of 2022, when pandemic-related withdrawals reduced balances.
As of 31 August 2025, EPF had 16.5 million members with total savings of RM1.31 trillion, a 9.9% increase from RM1.2 trillion in 2024, and 20.8% higher than RM1.01 trillion in 2023.
Of these, nine million members (55%) are active contributors, holding a combined RM1.07 trillion in savings.
