Malaysia is considering reforms to the Employees Provident Fund (EPF) payout structure to provide retirees with more sustainable income after retirement, Deputy Finance Minister Lim Hui Ying told the Dewan Rakyat on Wednesday.
According to The Edge Malaysia, while the current policy remains unchanged — allowing members to withdraw their savings in full, partially, or via scheduled payments — the government is studying a new system that would split members’ accounts into flexible savings and retirement income savings.
Would apply to new members and existing members could opt in
Flexible savings would allow members to withdraw money anytime based on personal needs, while retirement income savings would be paid out in periodic or monthly instalments until depleted.
The proposal would apply to new members once implemented, though existing members could opt in voluntarily.
Lim said the reform is necessary as Malaysians face structural challenges such as low wages, inconsistent contribution patterns, early withdrawal eligibility at 55 that does not align with life expectancy, and limited financial literacy.
Fewer than one in four EPF members have accumulated enough savings to meet the fund’s basic threshold for retirement adequacy. Meanwhile, more than 42% of senior citizens currently live in relative poverty,” she said.
