Investing your EPF savings

WEALTH CREATION

TO enhance the retirement savings of contributors, the Employees Provident Fund (EPF) permits them to make investment withdrawals.

This essentially allows a contributor to invest part of his EPF savings in Account 1 in products beyond the EPF and through external fund managers appointed by the Finance Ministry.

The EPF Basic Savings concept was introduced as part of EPF's "Beyond Savings" strategic initiative to help members accumulate a minimum savings of RM120,000 upon reaching 55 years of age.

The Basic Savings amount is also used to determine how much you can invest through this withdrawals scheme.

Q: What is Basic Savings?

A: It is an amount of savings to be put aside in Account 1 progressively at various pre-determined age levels so as to enable members to accumulate a minimum savings of RM120,000 upon reaching the age of 55. This is based on members receiving a monthly payment of at least RM500 over a 20-year period until the member is 75 years, the average life expectancy of Malaysians.

Q: Does that mean that the Basic Savings amount for members may differ?

A: Yes. The amount of basic savings each member is required to maintain increases with age. That means an older member always must maintain a higher basic savings amount in Account 1 compared with a younger contributor. Please refer to the table at right.

Q: So how much and how often can I invest?

A: The minimum amount you can invest is RM1,000 while the maximum amount cannot be more than 20 per cent of the amount exceeding the Basic Savings amount in Account 1. Investments can be made once every three months with a minimum sum of RM1,000.

Q: What are the products that I can invest in through this withdrawal scheme?

A: Members are given the option to invest either in unit trust funds or with asset management companies appointed by the EPF Investment Panel.

Q: Where can I get the latest list of appointed external fund managers?

A: You can get the latest list of appointed external fund managers from the nearest EPF office or by logging on to EPF website.

Q: How do I apply for an investment withdrawal?

A: You must check the amount you have in the EPF Account 1 against the eligible amount for investment. You will only need to complete the KWSP 9N (AHL) Form before opening an investment account with the fund manager you have selected.

The following documents must then be submitted to the fund manager:

- completed KWSP 9N (AHL) form;
- your current EPF statement of account;
- identification card / military identification card / MyKad

You only need to fill the column for the amount applied after discussing with your fund manager on the investment amount which is subject to the eligible amount for withdrawal. Once completed, the application will be submitted to the EPF for processing by your fund manager.

Q: Are investments made through this scheme guaranteed of profits?

A: No, no one can guarantee that these investments will always be profitable. It is merely a choice given to members who wish to invest some of their savings outside the EPF.

As an EPF member, you must make informed decisions on how to invest your retirement savings and what kind of risks to accept in order to protect your financial welfare upon retirement. In the event you are unsure about these investments, we recommend that you continue to leave your money in the EPF that will earn you dividends of not less than 2.5 per cent per annum and is, above all, risk-free.

Q: Can I cancel my withdrawal application after approval has been given?

A: No, you cannot cancel your withdrawal application after approval has been given. As such, extra care must be exercised before deciding to make any withdrawal.

For further enquiries on how to make an investment withdrawals, please contact our Call Centre at 03-8922 6000 or log on to www.kwsp.gov.my.