Malaysia: EPF for Self Employed

To assist those who are self-employed,The Employees Provident Fund (EPF) will roll out a new retirement scheme for them comes 2010.

The EPF will launch the 1Malaysia Retirement Saving Scheme on Jan 3 next year to help the self-employed cope with income inadequacy during retirement.

It was designed to provide these individuals without a fixed monthly income with a degree of financial security in their old age.

The scheme is open to self-employed individuals such as hawkers, night-market traders, real estate agents, freelancers like disc jockeys and fitness instructors, singers and actors and online business owners.

The Government is sensitive to the fact that adequate retirement savings remains a major concern for all Malaysians and in particular the self-employed, especially those without a fixed monthly salary.

”The 1Malaysia Retirement Saving Scheme offers this select group of contributors tremendous flexibility in determining how much they could afford to save for their retirement.

Unlike the conventional EPF saving scheme, the amount contributed into the 1Malaysia Retirement Saving Scheme is entirely at the contributor’s discretion.

Contributors can opt to set aside a minimum of RM50 or a maximum of RM5,000 per month as their retirement savings. Contribution is voluntary and contributors are also not required to contribute savings on a monthly basis but rather what and when they can afford to.

Contributors would receive annual dividends declared by the EPF, in addition to a 5% contribution from the Government subject to a maximum of RM60 per year over the next five years from 2010-2014.

Those interested to apply for the scheme can fill the KWSP 16G (1M) Form which is available at any EPF branch nationwide or download from the myEPF website at www.kwsp.gov.my from Jan 3 onwards. The forms are to be returned at any EPF branch or by mail.

However, individuals who are not EPF members have to register with the EPF first by completing KWSP 3 Form and submitting it to the EPF before applying for the scheme.

Existing EPF members, who turn self-employed, are also eligible and may opt for this new scheme.

Savings for the scheme can be deposited via cash or cheque using the KWSP 6A(2) Form at any EPF Payment Counter nationwide and withdrawals are governed by the present EPF withdrawal procedures and conditions.

Further information can be obtained by visiting the nearest EPF branch or EPF Call Centre at (03) 8922-6000 or the EPF website.

I think this is great news. I wonder what will be the withdrawal procedures if one is short of cash to buy a house or to pay the tuition fees for one's children's education. Will it be the same as the current on-going scheme?