Malaysia's Kumpulan Wang Simpanan Pekerja (KWSP), commonly known as the Employees' Provident Fund (EPF) has revised the minimum savings at age 55 to RM228,000.
The update, applicable from 1 January 2017, raises the minimum quantum of savings from the current RM196,800, as published by Bernama.
The basic savings refer to the amount considered sufficient to support members’ basic retirement needs for 20 years from age 55 to 75 aligned with the Malaysian life expectancy.
The new amount is benchmarked against the minimum pension for public sector employees, which has been raised from RM820 to RM950 per month from age 55 to 75.
Nurini Kassim, EPF's head of corporate affairs department, told Malay Mail: "The EPF basic savings quantum is revised periodically according to the minimum pension for public sector employees, or every three years, whichever is earlier, with the last revision having taken effect in 2014."
"Accordingly, members will now be required to have higher savings in their EPF accounts in order to be eligible to participate in the EPF Members Investment Scheme (EPF-MIS)," she said.
The increase of close of 16% in members' basic savings has been made in view of the escalating cost of living, longer life expectancy and higher inflation rate in Malaysia.
Under the savings scheme, employees can enhance their retirement savings by placing a part of it in Account 1 to be invested in unit trust funds or via private mandate managed by the appointed Fund Managers Institutions (FMI) under the EPF-MIS.
Nurini added that the basic savings will be used as a guide for members to determine the amount permitted to be transferred for investment under the scheme.
Effective 1 January 2017, the eligible amount members will be allowed to invest under the EPF-MIS has been increased to up to 30% in excess of their basic savings from Account 1, from the current 20%.
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