A PROPOSAL to implement monthly pension-style withdrawals for Employees Provident Fund (EPF) contributors upon retirement remains under study and has not reached the implementation stage, according to Finance Minister II Datuk Seri Amir Hamzah Azizan.
“The EPF itself has clarified that the proposal is still being reviewed and has not yet moved towards execution,” he said after delivering a keynote address at the 2025 National Tax Conference (NTC) on Tuesday.
“From a policy standpoint, if we are able to transition to a pension-like system, where savings are distributed gradually, it may be better for the country. This would ensure contributors have sufficient savings when they retire,” Amir Hamzah added.
Under the 13th Malaysia Plan (RMK13), the government is exploring a new mechanism to ensure post-retirement income sustainability. This would shift away from the current model, which allows for lump-sum withdrawals, towards monthly disbursements akin to a pension scheme.
According to the RMK13 document, the envisioned mechanism would divide EPF contributions into two components: retirement savings and a retirement pension. This would allow workers to withdraw a portion of their savings while also receiving monthly payments during retirement.
Amir Hamzah noted that one of the current concerns is that contributors granted full access to their savings tend to exhaust them quickly.
“As a result, by the time they reach old age, they no longer have sufficient funds. Therefore, it is crucial we conduct a thorough and comprehensive study. Only after that, and once approvals are secured, can we move forward with this proposal,” he said.
He further emphasised that any future implementation would initially target new EPF contributors.
“As previously stated, this proposal will focus on new contributors. However, existing contributors could be given the option to voluntarily opt into the scheme, should they wish to do so,” he explained. - August 5, 2025
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