Good decision by EPF in giving flexibility to members regarding Account 3 – experts

KUALA LUMPUR — The Employees Provident Fund’s (EPF) decision to allow its members the option to move their contribution in Account 3 to Account 1 or 2 or both is welcomed, said financial experts.

Hijrah Wealth Management Sdn Bhd founder and principal consultant Rohani Mohd Shahir said a reform to meet the request of some members might not be suitable for everyone, especially in the context of Account 3.

“If a member decides not to utilise Account 3, they will not have an option of withdrawing retirement savings from that account in the event of an emergency.

“Those who choose this option should have alternative emergency funds or already be practising monthly savings apart from EPF savings,” she told Bernama today.

Rohani said Account 3 is advantageous for contributors to withdraw funds for emergencies without resorting to other avenues such as loan sharks or burdensome loans.

However, she said members must have the discipline not to misuse this facility for other purposes other than emergencies as that would be detrimental to their future retirement needs.

On Friday (May 17), EPF’s Strategy and Policy Deparment head head Balqais Yusoff said in an interview with a news portal that the fund would allow members who feel that they do not need Account 3 to transfer the 10 per cent contribution into Account 1 or 2.

She acknowledged that this request must currently be made in an EPF branch, but the ability to make the request online will be available in June or July.

Meanwhile, Dr Azizul Azli Ahmad, the author of “Wang Ada Di Mana”, said that individuals who are earning low wages are among those that will benefit from Account 3 by being able to immediately access their savings.

Azizul, who is also a senior lecturer at the Faculty of Architecture, Planning & Surveying, Universiti Teknologi Mara (UiTM) Seri Iskandar, said parents who need to finance their children’s education, people adversely impacted by post-Covid-19 or people who have lost their jobs can make use of the savings in Account 3.

“We can withdraw our savings from Account 1 only when we reach age 55, while Account 2 has stringent conditions, such as for housing or health needs.

“Therefore, Account 3 allows members access to their savings for emergencies, personal use and so on,” he added. — BERNAMA