EPF Account 3 expected to be launched soon

The Employees Provident Fund’s (EPF) Account 3 is expected to be announced by the end of April.

The Star has learnt that while a date has not been confirmed, the launch of Account 3 or the flexible account is expected by month’s end.

Meanwhile, sources say the restructuring exercise will see the EPF Account 1 being renamed as Account Persaraan (Retirement Account), Account 2 as Account Sejahtera and the formation of the new Account 3 or the “flexible account”.

The accounts of members aged below 55 will be restructured from two accounts into three starting May 11.

Currently, for members aged below 55, 70% of their contributions goes into Account 1 while 30% goes into Account 2.

Existing balances in these two accounts will remain.

But after Account 3 goes live, the new contributions will be split where 75% will be put into Account 1, 15% into Account 2 and 10% into Account 3.

“Members may choose to transfer funds from Account Sejahtera to the flexible account via an opt in mechanism,” the source said.

“Members are given until Aug 31, 2024, to opt in for initial amount in the flexible account.”

Members can opt for the initial amount from May to August which will be the accumulation phase.

As for members who choose not to opt in for an initial amount in their Account 3, their balance will start from zero until new contributions are credited.

“Savings from the flexible account can be withdrawn by members at any time, with the minimum withdrawal amount being RM50.”

For those with savings of less than RM3,000 in Account 2, RM1,000 will be transferred to the flexible account.

On the redistribution of existing funds from Account 2, it is understood that one-third of the funds could go into the Account 3 while one-sixth will go into Account 1. The remaining balance will remain in Account 2.

EPF dividends are also likely to remain in the same range despite the formation of Account 3.

The EPF said last year that Account 3 would function like a savings account, and members could withdraw their savings any time.

The proposal to introduce the account was also to meet the potential emergency cash needs.