Contributors welcome EPF move to revert to 11% rate

PETALING JAYA: The announcement by the Employees Provident Fund (EPF) to revert to the contribution rate of 11% effective next year has been well received.

Several contributors when interviewed said the move would help Malaysians to put aside more money for their retirement.

Zulaikha Shawal said the higher rate would help many young adults like herself to save for the future.

“This will help with our future (savings). We are young and this is when we want to save more,” said the public relations executive.

Zulaikha, 24, who has been working for two years, said the fact that EPF contribution was deducted automatically from one’s salary made savings possible for many young working adults.

“If it is not deducted every month, I think we would spend most of the money,” she said.

In a statement, the statutory contribution will go back to the original 11% for members below age 60, and 5.5% for those aged 60 and above, with effect from January.

The reduction of contribution rate to 8% was announced by the Government in 2016, following the tabling of the revision of Budget 2016 by Prime Minister Datuk Seri Najib Tun Razak.

Another contributor, Yoong Yi Fa, said he was not affected by the move as he did not choose to reduce his EPF contribution rate to 8% last year.

“Even with the contribution of 11%, together with employer’s contribution, we have always been told that our EPF savings may not be enough to support our retirement years.

“That is why I did not opt for the reduction rate last year,” said the finance manager.

Assistant manager HL Ong, 33, described it as a good move, saying it would ensure more money was channelled to one’s retirement fund.

“I will spend more if there is extra money in my pocket, so I have always chosen to maintain the 11% rate,” she said.

Environmental consultant Geetha P. Kumaran said EPF acted as a “forced savings” for the long term, so the higher a person contributes, the amount accumulated too would be bigger.

“I am also happy with the dividend payouts as the EPF has been declaring good returns consistently,” said the 52-year-old.

The statement added that EPF members who wish to contribute more than the statutory rate of 11% or 5.5% could do so by completing the KWSP 17A (AHL) or KWSP 17AA (AHL) forms.

For more information, visit the EPF website at www.kwsp.gov.my or contact the EPF Management Centre at 03-8922 6000, or visit any nearest EPF branch.