KWSP Account 3 is a new structure introduced recently and May 11th 2024 is the effective start date of it for member age under age 55. So new contrubtion after May 11th will be distributed to the 3 accounts accordingly. If you login to your KWSP account no, if you will see 3 accounts in your dashboard and of course the Account 3 will be having 0 balance. According to KWSP (EPF), the objective of the restructuring is to enhance the members’ income security after retirement while also at the same time addressing current life cycle needs.
So from 2 accounts stucture to 3 accounts stucture already took effect as of writing. Our monthly EPF money are based on below old strucutre previously and moving forwards will based on the new structure.
Old Strcuture
Account 1 (70%): savings for our retirement income
Account 2 (30%): to address
New Structure – effective May 11th 2024
Akaun Persaraan (75%): to accumulate savings that will serve as income during retirement. It cannot be withdrawn before you reaches age 55.
Akaun Sejahtera (15%): to address pre-retirement life cycle needs that contribute to wellbeing during retirement. As of writing, it can be withdrawn for the purpose such as Housing, Education, Health, Insurance Protection, Hajj or when reach age 50.
Akaun Fleksibel (10%): to provides flexibility for short-term financial needs. Savings in this account can be withdrawn at any time according to members’ needs. KWSP encourage members only withdraw for emergency and for immedieate needs only.
KWSP Account 3’s Initial Amount
Between May 11th to August 31st 2024, members with age under 55 (54 and below) will have a 1 time option to transfer part of the account balance from their Akaun Sejahtera (previously known as Account 2) as starting amount to Akaun Fleksibel. Only if you want to opt in for the initial/starting amount for Akaun Fleksibel, then login to your KWSP i-Akaun or visit the self-service terminal at any EPF office to start the process. Else the Persaraan and Akau Sejantera will remains as it is with the same balance from Account 1 and 2, and Akaun Fleksibel will begin as 0 amount.
If you optin for it, it depends on how much balance you have in your Akaun Sejahtera and it follow the below for the ratio of amount to be transferred to Akaun Fleksibel and/or Akaun Persaraan.
Akaun Sejahtera with balance of below RM 3000
If your Akaun Sejahtera have balance of RM 1000 and below, the whole amount will be transferred to new Akaun Fleksibel. To illustrate, Member A have balance of RM 900 in the Akaun Sejahtera. In this case, the whole RM 900 will be transferred to Akaun Fleksibel.
For balance more than RM 1000 and below RM 3000, then RM 1000 will be transferred to Akaun Fleksibel. To illustrate, Member A have balance of RM 2800 in the Akaun Sejahtera. Then RM 1000 will be transferred to Akaun Fleksibel and balance of RM 1800 will remain in Akaun Sejahtera.
In this category, no amount will be transferred to Akaun Persaraan from your Akaun Sejahtera.
Akaun Sejahtera with balance of RM 3000 and above
For this category, it might sounds a bit confusing but with illustration, it will make it easier to understand.
If you optin for the initial amount in Akaun Fleksibel, then the amount will be transferred to both Akaun Persaraan and Akaun Fleksible follow the below ratio.
- 5/30 or five out of thirty will be transferred to Akaun Persaraan
- 10/30 or ten out of thirty will be transferred to Akaun Fleksibel
- 15/30 or balance of 15 out of thirty will remain in the Akaun Sejahtera
To illustrate, Member A have balance of RM 30,000 in Account Sejahtera. Below will be the amount that will be transferred.
- 5/30 or RM 5,000 will be transferred to Akaun Persaraan
- 10/30 or RM 10,000 will be transferred to Akaun Fleksibel
- 15/30 or RM 15,000 out of thirty will remain in the Akaun Sejahtera
KWSP Account 3 (Akaun Fleksibel) Withdrawal
For withdrawal, the member need to be below age 50, and have at least RM 50 (also is the min. withdrawal amount) in the Akaun Fleksibel. The withdrawal application can be made either via KWSP i-Akaun or at EPF offices.
After the withdrawal application, payment will be made within 7 working days upon approval to your bank active savings/current account. And the account need to be under your name only, not a joint or company account.
For withdrawal below RM 30,000 with previous withdrawal history, then you can initiated the application online via i-Akaun.
For first time withdrawal or if new withdrawal is to another bank account than previously, then you need to do identity verification first depends on below:
- Withdrawal amount more than RM 10,000 go to self-service terminal in any EPF offices to do thumbprint verification
- Withdrawal amount less than RM10,000 can do online verification
Do take note that once you initiated withdrawal application is approved, it cannot be cancelled.
In today news in the TheStar, now KWSP allow hassle-free withdrawals up to RM 250 per day. Withdrawals above RM 250 required member to verify their identity thru e-KYC (e-know-your-customer) on i-Akaun via facial recognition or visit nearest EPF branch for a thumbprint verification.
Zakat for Muslim Members
According to KWSP, withdrawal from Akaun Fleksibel are subject to Zakat except for if the reason of withdrawal is to cover basic living needs for themselves and their dependends.
Balance in the Akaun Fleksible is subject to Zakat.
Muslim members are advised to either consult their respective state zakat authorities on matters related to zakat or contact KWSP for more information on this matter.
Dividend Rates for Akaun Fleksibel
As of writing, according to KWSP there will be no difference between the 3 accounts, which means same dividend rate apply to all accounts.
But do take note that this can be changed in the future.
Last Few Words
In my opinion, unless you really require the excess money for emergency or to cover short term basic living needs, don’t withdraw it. EPF money suppose to be for our retirement income when we are no longer working or for those still continue to work after retire, the income might be lower than before retirement.
And whether to optin for initial amount tranferred to Akaun Fleksibel, my only concern is the dividend rate. Will KWSP eventually give a lower rate for it? Which make sense because of the flexibility of it, as member can withdraw it anytime.
See it as our bank saving account vs fixed deposit account. FD earn higher interest than saving account due to we lock down the money for 1 month to 12 months. And the bank can re-invest our money into different investment vehicle or to borrow out our money to others. For saving account, it is harder for the bank to re-invest our money as we can withdraw it back anytime.
For myself, I have yet to decide whether to apply for the initial amount in my Akaun Fleksibel and the reason is due to the uncertainty of the future dividend rate for it.
And the FAQ is available from KWSP website in both language BM and English.