EPF to create ‘Account 3’ for [email protected]

The incentive will offset the statutory contributions by employers and employees. Any excess will go into Account 3

by DASHVEENJIT KAUR/ pic by MUHD AMIN NAHARUL

A SPECIAL Employees Provident Fund (EPF) account will be created under the [email protected] initiative which allows flexible withdrawal at any amount, whenever needed.

Finance Minister Lim Guan Eng said this allows participants to save for their retirement, while the higher disposable income will enable them to support their daily needs.

“This programme will commence in stages beginning the second quarter of 2020. However, [email protected] is not an EPF-only initiative. Rather, it can only succeed through collaborative efforts between employers and policymakers,” he said at the EPF’s International Social Well-Being Conference (ISWC) 2019 in Kuala Lumpur yesterday.

EPF CEO Tunku Alizakri Raja Muhammad Alias (picture) said there are interested employers, so now that this is formally launched, the EPF can start engaging with stakeholders.

On how incentives will be channelled to the eligible individuals, he said it will be used to offset the statutory contributions by employers and employees. Any excess amount of the wage incentive will go into Account 3.

“Suppose your statutory contribution from your salary alone is RM250, that amount will be deducted from the government’s incentive, leaving your salary untouched.

“If there’s balance after the deduction, that amount would be deposited into the Account 3,” he said, adding that the eligible individuals’ take-home salary would then be higher.

The four components are [email protected], [email protected], [email protected] and [email protected]

[email protected] is for graduates who, having been unemployed for over 12 months, manage to secure work. They will receive a wage incentive of RM500 per month, while their employers will receive a hiring incentive of up to RM300 per month for each new hire for two years.

[email protected] is to encourage youth to enter the Technical and Vocational Education and Training courses. Trainees on apprenticeship will receive an additional RM100 per month on top of the existing allowance.

[email protected] will provide 33,000 jobs per year for women between 30 and 50 years old, who have stopped working for a year or longer.

Women who return to the workforce will receive a wage incentive of RM500 per month, while their employers will receive a hiring incentive of up to RM300 per month for two years.

The current income tax exemption for women returning to work after a career break will be extended to 2023.

Under [email protected], Malaysians who are hired to replace foreign workers will receive either RM350 or RM500 per month, while their employers will receive a hiring incentive of up to RM250 per month for two years.

Meanwhile, the EPF and the National Pension Service (NPS) of the Republic of Korea inked a memorandum of understanding (MoU) to gain insights into developing social securities safety nets.

This is a part of its effort to acquire the best practices in the area of social protection and encourage knowledge-sharing on pension system management.

“We are delighted to establish this collaboration with the NPS which presents us an opportunity to tap into a reservoir of global experts and seek solutions from different perspectives,” Tunku Alizakri said.

He represented the EPF, while chairman and CEO Sung Joo Kim signed on behalf NPS, witnessed by Lim and EPF chairman Tan Sri Samsudin Osman.

The MoU formalises cooperation in training-related pension policy and initiatives, research projects and best practices information sharing.

NPS offers four benefits for its members, namely old-age pensions, disability pensions, survivor pensions, and lump-sum benefits in the form of a one-time payment.

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