The Ministry of Finance (MOF) has recently revealed some startling numbers regarding the amount of money being withdrawn from the Employees Provident Fund (EPF) Account 3 (Flexible Account).
The revelation was made during a Parliamentary session yesterday (Dec 2), reported The Edge Malaysia.
Nearly RM11bil withdrawn from EPF Account 3
In a written parliamentary response, the MOF said that a total of RM10.78 billion had been withdrawn from Account 3 as of Sept 30 this year.
The ministry added that the withdrawals were made by 3.86 million EPF members, which accounted for 29.4% of those below the age of 55.
It was responding to a question posed by Tasek Gelugor MP Wan Saiful Wan Jan, who asked for an explanation regarding the effectiveness of Account 3.
How does Account 3 work?
First launched in May, Account 3 was introduced to allow Malaysians withdraw funds from their savings anytime regardless of age and to help them financially sustain themselves before reaching the retirement age.
This is unlike Account 1 and 2, where withdrawals are restricted to retirement and specified needs such as education, healthcare, housing, and early withdrawals at the age 50.
With the introduction of Account 3, Malaysians now will have their monthly contributions split three-ways: 75% into Account 1, 15% into Account 2 and 10% into Account 3.
Back in September, it was reported than more than 40% of Malaysians withdrew from Account 3 to settle debts:
