PETALING JAYA – The government has agreed to increase the Employees Provident Fund (EPF) voluntary contribution limit from RM60,000 to RM100,000 per annum, said Prime Minister Datuk Seri Anwar Ibrahim.
He said the date for implementation will be announced in the near future.
Anwar, who is also finance minister, said those working under employers could opt to make additional contributions to complement the statutory 11% employee contribution and ensure they have sufficient savings for their retirement.
He said the government will also expand the scope of tax relief amounting to RM3,000 annually for life insurance premiums or life takaful contributions to cover the voluntary contributions to EPF, starting from the 2023 assessment year.
Meanwhile, those who are self-employed, without fixed income, or outside the labour force and under 60 years old can also choose to contribute according to their capacities through the i-Saraan programme.
“As an incentive to motivate this group to have more savings, the government will provide 15% of the contributions’ amount, subject to the annual incentive limit – which has been increased from RM250 to RM300 per contributor, through Budget 2023,” Anwar said in a parliamentary written reply.
“291,743 members made voluntary contributions under the programme last year, with RM33.21 million in government incentives having been credited to the members’ Account 1,” he added.
Anwar was responding to a question by Warisan president Datuk Seri Mohd Shafie Apdal, who asked about EPF’s plans to ensure contributors’ savings reach a range between RM500,000 to RM600,000 to comfortably retire in major cities, and areas outside the Klang Valley.
Anwar explained that EPF members must have savings amounting to RM240,000 at 55 years old to ensure they have at least RM1,000 a month to finance their retirement needs for at least 20 years.
Nonetheless, he added the amount is insufficient, as the minimum spending for an elder in Lembah Klang is RM2,520, according to studies by the Social Wellbeing Research Centre.
Anwar also reiterated the government’s additional contribution of RM500 to almost two million members who have below RM10,000 in their savings, which is aimed at helping members accelerate the accumulation of their savings.
In an effort to make payments more convenient, Anwar said EPF introduced a new feature through its i-Akaun app for voluntary contribution payments.
The feature has been used by over 315,000 members, who deposited savings totalling RM527.70 million as of January 31.
To raise awareness, he also mentioned EPF’s free Retirement Advisory Service, which is open to EPF members and non-members. – The Vibes, April 9, 2023
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