PETALING JAYA: The Employees Provident Fund’s (EPF) proposed shift to a monthly pension payout scheme will not impact current EPF members, assured Deputy Finance Minister Lim Hui Ying. This clarification comes amidst public discussion and potential concerns regarding the new initiative.

Addressing queries, Lim clarified that the new payout structure is designed for future EPF members joining the system after the scheme is officially implemented. Existing contributors will retain their current withdrawal options, allowing them to access their savings as they currently do – through lump-sum withdrawals at retirement.

The EPF has been exploring a shift towards a monthly pension system as a means to ensure retirees have a steady income stream throughout their retirement years. This move is driven by concerns about many retirees quickly depleting their lump-sum savings shortly after retirement, leaving them financially vulnerable in their later years. The monthly pension scheme aims to provide a more sustainable and predictable income for retirees.

Lim’s statement highlights a strategic approach. Implementing the monthly pension scheme for new members allows the EPF to test and refine the system without disrupting the financial plans of those who have already built up their savings under the existing framework. It also provides a gradual transition, allowing the EPF to manage the operational and logistical challenges associated with a significant change to its payout system.

For existing EPF members, the current withdrawal options remain unchanged. These include:

• Age 50/55/60 Withdrawals: Members can progressively withdraw a portion of their savings upon reaching these ages.
• Age 60 Full Withdrawal: Upon reaching 60, members can withdraw their entire EPF savings.
• Medical Expenses Withdrawal: Withdrawals can be made for approved medical expenses.
• Bridging Loan: EPF members can apply for a bridging loan against their savings.

The EPF continues to engage with stakeholders and conduct studies to determine the optimal design and implementation strategy for the new monthly pension scheme. This includes evaluating various payout models and ensuring the scheme is financially sustainable. The EPF’s role is crucial in safeguarding the retirement savings of Malaysians and ensuring they have access to adequate income throughout their retirement years.

The government is committed to supporting the EPF in its efforts to enhance retirement security for all Malaysians. Further updates on the proposed monthly pension scheme will be announced in due course, and members are encouraged to stay informed through official EPF channels.