No change in lump sum withdrawals for existing members aged 55 and 60: Malaysia's EPF

This clarification follows an earlier announcement on a proposed mandatory monthly withdrawal option for eligible new EPF members born in or after 2010.

The Employees Provident Fund (EPF) has clarified that no change is intended for current lump sum withdrawals at age 55 and 60 for existing members.

Currently, the EPF monthly withdrawal option is only applicable to members who voluntarily opt-in.

In a press release on 10 July 2023 (Monday), the board further elaborated that the proposed mandatory monthly withdrawal option will only apply to new EPF members born in or after 2010, and registered with the EPF after the implementation date. As previously announced on 6 July 2023 (Thursday), EPF has started to work towards ensuring retirement income adequacy by encouraging members to voluntarily shift to adopting more regular monthly payouts rather than lump sum withdrawals. It noted that last year, more than 7,000 members have already voluntarily adopted the monthly payout option.

As of recent news, the first payout under the compulsory option is only expected to be made when these new members retire, some decades in the future. EPF assured that this proposal is still being refined, and that any decision regarding the mandatory monthly withdrawal option will only be made with careful consideration and alignment with the EPF’s commitment to the best future interests of its members.

The board also highlighted that this transition is a necessary measure given that Malaysia’s average life expectancy has increased from 54 years in 1957 to 75 years today, and is projected to further increase over the years, translating into longer years spent in retirement. 

Lead image / Shutterstock