Saving and Retirement Plan

8/19/2019 Saving and Retirement Plan

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Employees Provident Fund

EPFSAVINGS

AND YOURRETIREMENT



Content Are Your Retirement Savings Sufficient?

Wy !s !t !mportant "o Diversify Your Source

#f Retirement !ncome?

Wat Are "e $enefits #f EPF Savings?

Wat !s $asic Savings?

%em&er's !nvestment Sceme

(%alaysia Retirement Savings Sceme

)SP(%*

+

,

-

(.

(/

(0

1



Are Your RetirementSavings Sufficient?Did you 2no3?

A stu! conucte "! t#e $or% &ea%t# Organisation '$&O( in )**+

#as foun t#at Ma%a!sians #ave a #ea%t#! %ife e,-ectanc! of u- to

.. !ears/

$it# an average %ife e,-ectanc! of +0 !ears1 t#e Ma%a!sian

-o-u%ation is e,-ecte to e,-erience #ea%t# -ro"%ems in t#e %ast 2

to 3* !ears of t#eir %ives/

Are !our savings sufficient for !our retirement?

$#et#er !our retirement savings is sufficient or not e-ens on

severa% factors45

• 4ifespan5 retirement age5 lifestyle5 ealt5 family dependents and

cost of living6 and

• 7o3 you plan your finances &efore retirement and o3 tey arespent after retirement8

&o6 muc# o !ou nee for !our retirement?

• !t all depends on your needs and re9uirements5 ealt condition

and lifestyle8

• !f you 3is to spend R%-/. a mont for a period of /. years )00

years : ;0 years*5 you need to ave a total of R%(<,5-.. in your

savings at te age of 008

• !f you 3is to spend R%-/. a mont for a period of (0 years

)assuming tat you retire at age ,.*5 you need to ave R%(+;5,..

in your savings at te age of ,.8

Effective (st

of =uly /.(15

te minimum

retirement age

as increasedto ,.8

"e average life

e>pectancy of

te %alaysian

population is

;0 years8 "is

means tat

you need to

ave ade9uate

savings for (0years to at least

finance your

&asic retirement

needs8

,- of EPF

mem&ers aged

0+ in /.(+ ave

savings &elo3

R%0.5...8

0. of retirees

e>aust teir

EPF savings

3itin 0 years8

+



$#at are EPF7s initiatives to #e%- increase mem"ers7 savings?

Since )**+1 t#e EPF #as introuce t#e fo%%o6ing im-rovements to

t#e EPF sc#eme in orer to increase t#eir mem"ers7 retirement

savings an iscourage mem"ers from e-%eting a%% of t#eir

savings in a s#ort -erio of time45

•

!ncreasing te percentage of retirement savings in Account ( from,. to ;.6

• !ntroduced te Age 00 Years Witdra3al5 a fle>i&le 3itdra3al

facility tat gives mem&ers te option to 3itdra3 teir savings

lump sum or montly5 partially or a com&ination of te options6

and

• E>tended te contri&ution )mandatory* age from 00 to ;0 for

mem&ers 3o are still in employment8

&o6 can !ou increase !our retirement savings?

T#e fo%%o6ing ti-s can #e%- !ou increase !our retirement savings45

• 8iversif!ing t#e source of !our retirement income

!t is important to ave more tan one source of income so tat you

3ill not depend on your EPF savings alone to support you troug

your retirement years6

•

Start saving ear%!"e earlier you start saving5 te more money you accumulate 3en

you retire8 Cultivate te a&it of saving for your retirement as your

3ay of life6

• P%an for !our %ong5term nees

!dentify te main re9uirements for your retirement5 te amount and

source of income needed to support your long@term needs8 Plan

your financial re9uirements and e>penses and save part of your

income for any eventualities6

• &ea%t#care

Perform regular medical e>aminations and lead a ealty lifestyle8

$eing ealty 3ill save you from incurring ig medical costs

3ic tend to consume most of your retirement savings as 3ell as

allo3s you to 3or2 longer so you can increase your savings6 and

• Invest 6ise%!

A 3ise investor is a 2no3ledgea&le investor8 4earn to recognise

investment ris2s and al3ays evaluate your investment activities8 Do

not invest in Bet Ric uic2 Scemes' or 3it any oter

unregistered investment companies8

To ensure !our

retirement savings

is sufficient1 !ous#ou%45

Consider

delaying your

retirement

and continue

3or2ing for as

long as you

can6

Witdra3 yourretirement

savings only

3en it is

a&solutelynecessary6

and

Plan to

use your

retirement

savingsin 3ays

tat

could generate

a lifelong

income8

A""EN"!#N

0



You s#ou% not e-en on !our EPF savings as t#e on%! source ofincome for !our retirement/

$#at is t#e Im-ortance of 8iversif!ing t#e Source of Your

Retirement Income?

Your EPF savings alone may not &e enoug to support your golden

years8 !nsufficient retirement savings can &e due to several reasons5

among tem longer lifespan5 lo3 salary and early retirement8 %ore

often tan not5 te money 3ill &e e>austed in a sort period of time8

Since te esta&lisment of te EPF on te (st of #cto&er (<0(5 te full

3itdra3al age as remained at age 005 3ile te life e>pectancy of

%alaysians as increased to age ;08 "is means tat your EPF savings

needs to last for /. years after you retire8

3/ T#e )*39 EPF statistics for mem"ers age 09 revea%e t#at45

• ,- of mem&ers ave savings R%0.5... and &elo36

• 01 of mem&ers ave savings R%/.5... and &elo36 and

• #nly 1/ of mem&ers still 3or2 at age 0+8

"is amount of savings is not sufficient to support you for /. years

after your retirement8

$#! Is It Im-ortant To

8iversif! Your Source

Of Retirement Income?

,



)/ You must iversif! !our source of retirement income so

t#at45

• You 3ill not fully rely on your EPF savings alone6

• You can receive a continuous flo3 of income6 and

• You can avoid depleting your retirement income 3itin a

sort period of time8

$#at are t#e sources of retirement income avai%a"%e?

You can iversif! !our retirement income t#roug# t#ese sources45

• EPF Savings

All private sector 3or2ers are mandated to contri&ute a certain

percentage of teir salary to teir EPF account8 "is is in addition

to te contri&ution made &y teir employer on teir &ealf8

• :onventiona% Savings an Protection

#ter tan saving your money in &an2s or "a&ung 7ai5 AS$ or ASW5 you are also encouraged to ave oter forms of financial

protection suc as insurance policies tat covers ealt5

education5 accidents5 permanent disa&ility or deat8

• Vo%untar! :ontri"ution

Apart from te EPF mandatory contri&ution5 you can also

contri&ute a certain amount of your income into voluntary

scemes suc as te Private Retirement Sceme )PRS* or te

(%alaysia Retirement Sceme )SP(%*8

• Senior :iti;en Fun<Sc#eme

"is sceme5 or S2im $antuan #rang "uaG5 is introduced &y te

Department of Social Welfare for senior citiHens 3it a ouseold

income of less tan R%(50.. per mont and 3o meet te

re9uired terms8 #ter forms of assistance can also &e o&tained

from $aitulmal5 4em&aga Ia2at5 etc8

• Informa% Su--ort

#ter tan see2ing support and assistance from families andfriends5 tere are oter forms of informal support suc as free

medical services from pu&lic clinics and ospitals5 income from

rental of real estates5 dividends from investments or unit trust5

interests from fi>ed deposits5 or financial assistance under te

Program Pem&angunan Ra2yat "ermis2in )PPR"*G8

$#at are ot#er sources of income avai%a"%e for retirees?

Wor2 part@time or operate a small &usiness from ome or turn your

o&&y into a source of income8 You can also &uy annuities frominsurance companies5 3ic 3ill provide a fi>ed montly income for

te rest of your life8

!t's &est to &e

prepared for yourfuture 7aving

various sources

of income canelp to ensure

a comforta&leand sustaina&le

retirement8

;

A""EN"!#N



-

$#at Are T#e =enefits

Of EPF Savings?EPF savings are for retirement/ It is ivie into t6o ')( accounts 5 Account 3

an Account ) of 6#ic#45

Account 3 @ comprises ;. per cent of mem&ers' savings 3ic can only &e 3itdra3n

3en reacing retirement age6 and

Account ) @ comprises 1. per cent of mem&ers' savings5 3ere mem&ers can ma2e

pre@ retirement 3itdra3als aimed at enancing mem&ers' retirement 3ell@

&eing8

$#en can 6it#ra6a% < transfer of savings in Account 3 > Account ) "e mae?

$#en can mem"ers 6it#ra6 t#e savings in Account 3?"e savings can only &e 3itdra3n 3en a mem&er reaces te age of 008

:an mem"ers invest using t#eir savings in Account 3?

Part of te savings in Account ( can &e used to invest in unit trusts troug EPF@approved

Fund %anagement !nstitutions8

$#en can mem"ers 6it#ra6 t#eir savings in Account )?

"e savings in Account / can &e 3itdra3n for te follo3ing purposesJ@

• &ousing $it#ra6a%"is sceme allo3s mem&ers to o3n a comforta&le ome upon retirement6

• Eucation $it#ra6a%

"is sceme allo3s mem&ers to finance te cost of iger education at diploma level

and a&ove8 A good education can elp improve mem&ers' K mem&ers' cildren's

standards of living as 3ell as increase teir retirement savings6

• Meica% $it#ra6a%

"is sceme allo3s mem&ers to pay for medical e>penses incurred for te treatmentof critical illnesses andKor to &uy medical aid e9uipment as approved &y te EPF

$oard for yourself or your allo3ed family mem&ers6

• Age 0* Years $it#ra6a%

"is sceme allo3s mem&ers to prepare and plan &efore reacing retirement6



• $it#ra6a% Of Savings Of More T#an RM3 Mi%%ion

%em&ers 3it savings of more tan R% ( million can

3itdra3 teir savings in e>cess of te R% ( million5 su&ect

to a minimum amount of R%0.5 ... )3ic means tat

mem&ers must ave savings of at least R%(8.0 million*8 "is

3itdra3al can &e made once every 1 monts6 and

• &a $it#ra6a%

7elps mem&ers to finance te e>penses of performing 7a8"is 3itdra3al only covers te &asic e>penses and not te

entire cost8

$#en can fu%% 6it#ra6a% of t#e EPF savings "e mae?

Fu%% 6it#ra6a% from Account 3 an Account ) can "e mae if t#e

fo%%o6ing criteria are met45

•

Lpon reacing te age of 006• Lpon emigration to anoter country6• "e mem&ers ave &een confirmed incapacitated5 pysically

or mentally5 aving acieved te level of %a>imum %edical

Rea&ilitation )%%!* to 3or26

• Lpon deat 3it payment made to te nominee K ne>t of 2in K

&eneficiaries K administrators6 and• A civil servant under te pension sceme or a civil servant

3o as opted for early retirement are entitled to receive all

of te savings including dividends from te employee's

contri&ution5 3ere&y te employer's )Bovernment*contri&ution is returned to te Retirement Fund !ncorporated

)MWAP*8

$#at ot#er "enefits o I get as an EPF mem"er?

A-art from 8eat# an Inca-acitation $it#ra6a%1 "eneficiaries or

mem"ers t#emse%ves are entit%e to receive an aitiona% -a!ment

'not from mem"er7s saving( from EPF as a gesture of com-assion/

T#e "enefit e%igi"i%ities are as fo%%o6s45

• Deat $enefit of R%/50..5 provided tat 3itdra3al is made

3itin si> ),* monts from te date of passing5 and te

deceased mem&er as not reac te age of 006 and

• Disa&ility $enefit of R%05...5 provided tat te disa&ility

3itdra3al is done 3itin one )(* year from te date te

mem&er loses is or er employment due to is or er

disa&ility &efore reacing te age of 008

Note 4

"ese EPF &enefits are derived from EPF's investment revenues

and not from mem&ers' savings8

Any pre@retirement

3itdra3als

)Account /*

3ill reduce te

total amount

of mem&ers'

retirementsavings8

EPF savings is

for retirement5 not

for present day

consumptionG

<

A""EN"!#N



$#at Is =asic

Savings?Introuce in Fe"ruar! )**21 =asic Savings is t#e minimum

amount of savings mem"ers nee in orer to su--ort t#eir "asic

retirement nees 6#en t#e! reac# age 00/

T#e =asic Savings amount is set accoring to age1 6#ic#

u%timate%! a%%o6s mem"ers to #ave at %east [email protected]** 'RM2)* a

mont# for t#e -erio of )* !ears( in t#eir EPF account "! age 00/

T#e =asic Savings is a%so use to etermine t#e amount fromAccount 3 -ermitte for mem"ers to invest uner t#e Mem"er7s

Investment Sc#eme 'MIS(/

T#e minimum amount for =asic Savings is "ase on t#e fo%%o6ing

assum-tions45

)i*

)ii*

)iii*

A pay i2e of 1 yearly for mem&ers6

"e EPF yearly dividend rate is + a year6 and

"e EPF statutory contri&ution rate is /1 of te montly

3age8uantum for =asic Savings "ase on

age 45

(.

=ASI: SAVINGS S:&E8UBE 'EFFE:TIVE 3ST CANUARY )*39(

Age $asicSavings )R%*



(- (5... 1( 1.5... ++ <05...

(< /5... 1/ 1+5... +0 (./5...

/. +5... 11 1;5... +, (.<5...

/( 05... 1+ +(5... +; ((;5...

// ;5... 10 +,5... +- (/05...

/1 <5... 1, 0.5... +< (1+5...

/+ ((5... 1; 0+5... 0. (+15...

/0 (15... 1- 0<5... 0( (015...

/, (05... 1< ,+5... 0/ (,15...

/; (-5... +. ,<5... 01 (;+5...

/- /(5... +( ;,5... 0+ (-05...

/< /+5... +/ -(5... 00 (<,5-..

1. /;5... +1 --5...



$i%% =asic Savings "e su"ecte to revision?

$asic Savings is revised &ased on minimum pension rate of pu&lic

sectors5 or every tree )1* years5 3icever comes first8

Note 4

"e 9uantum $asic Savings is su&ect to cange from time to time8

((

$asic Savingsis te minimum

amount of

savings needed

at age 008

A""EN"!#N



(/

$#at is Mem"er7s Investment Sc#eme 'MIS(?

T#is sc#eme a%%o6s mem"ers to transfer a -ortion of t#eir savings

from Account 3 for t#e -ur-ose of investment in orer to increase

t#eir retirement savings/

Mem"ers ma! invest not more t#an )*D of t#eir savings in e,cess

of t#e =asic Savings amount from Account 3 t#roug# t#e

a--ointe Fun Management Institutions 'FMIs( a--rove "! t#e

Ministr! of Finance/ T#is is to %imit t#e e,-osure of investment ris

on t#eir retirement savings/

$#o is e%igi"%e to -artici-ate in t#e Mem"er7s Investment

Sc#eme 'MIS(?

(8 %alaysian CitiHen8

/8 Non@%alaysian 3oJ@

• !s an EPF mem&er &efore (st August (<<-6

OR

• #&tained a Permanent Resident status )PR*8

$#at is t#e amount t#at mem"ers must #ave to "e e%igi"%eto invest in t#e Fun Management Institutions 'FMIs(?

%em&ers may invest from teir savings under te follo3ing conditionsJ@

• /. from te mem&ers' savings in e>cess of te $asic

Savings amount in Account (6

• FormulaJ )Account ( : $asic Savings* > /.6

• "e minimum amount for %em&ers !nvestment Sceme )%!S*

is R%(5...6

• !nvestments can &e made once every 1 monts6• !nvestments can &e made to one Fund %anagement !nstitution

)F%!* at a time6• Su&se9uent investments can &e made 3it te same or

oter approved Fund %anagement !nstitutions )F%!s*8

Mem"er7s

Investment Sc#eme



(1:a%cu%ation sam-%e of -ermitte investment4

Moe of a--%ication ?

• Applications must &e su&mitted troug any of te appointedFund %anagement !nstitutions )F%!s* alongside 3it MWSP <N

)A74* form and a copy of %yMad8

• "e F%!s 3ill transmit te application to te EPF for processing8

A--rove Fun Management Institutions

All investments must &e made troug te Fund %anagement

!nstitutions )F%!s* approved &y te %inistry of Finance8 "e updatedlist of Fund %anagement !nstitutions )F%!s* can &e o&tained at any

EPF &rances or via EPF 3e&site at 666/6s-/gov/m!

Returning T#e Investment To EPF

• %em&ers are re9uired to return all amounts to te EPF )including

te gains* once te investment units ave &een sold &efore

reacing te age of 008 "e money 3ill ten &e credited into te

mem&ers' Account (8

• %em&ers are not allo3ed to 3itdra3 any amount )no lea2ages'*

from te money invested troug te Fund %anagement

!nstitutions )F%!s*8

%em&er's Age 1. years

"otal Savings in Account ( R%105...

$asic Savings at 1. years old)Refer to $asic Savings Scedule*

R%/;5...

Savings in Account ( tat e>ceeds $asic Savings R%-5...

Amount eligi&le for investment under te%em&er's !nvestment Sceme )%!S* isJ

/. > R%-5... R%(5,..)%inimum investment R%(5...*

R%(5,..

http://www.kwsp.gov.my/

http://www.kwsp.gov.my/



(+ Annua% EPF 8ivien On Amount Investe

%em&ers 3ill not o&tain any dividends declared &y te EPF on te

amount invested as it is not invested &y te EPF8

Re%ease of :ontro% On T#e Investment

"e EPF 3ill release its control on te invested amount &y te Fund%anagement !nstitutions )F%!s* 3en a mem&er reaces age 00 or as

made full 3itdra3al under 4eaving te Country5 !ncapacitation5

Pensiona&le Employees and Deat Witdra3als8

Claims or resale of te invested units 3ill &e managed &y te mem&erK

ne>t@of@2in directly 3it te Fund %anagement !nstitutions )F%!s*8

Nomination

"e amount transferred to te Fund %anagement !nstitutions )F%!s* isnot su&ect to nomination made &y a mem&er8 "e EPF 3ill discarge

control over te invested amount upon te demise of a mem&er8

Payment to te ne>t@of@2in 3ill &e made &y te Fund %anagement

!nstitutions )F%!s* in accordance 3it relevant legislations8

A""EN"!#N

%em&ers arefully responsi&le

for teir

investments8

"e EPF 3ill not

&e lia&le for

any losses



(0

Se%f5em-%o!e iniviua%s1 #ouse6ives an t#ose 6it#out a fi,e

income o not #ave a forma% retirement -rotection sc#eme %ie t#e

ones eno!e "! t#e -rivate sector 6orers 'EPF( an -u"%ic

sector em-%o!ees '-ension sc#eme(/

$#at oes SP3M aims to o?

• Provides an avenue for self@employed individuals or tose 3itout

a fi>ed income to save for teir retirement8

• "is sceme is designed to encourage tese individuals to

contri&ute voluntarily &ased on teir afforda&ility for teir

retirement8

• Demonstrate te Bovernment's concern for tis group of

individuals &y giving tem incentives to save for teir retirement8

$#o is e%igi"%e to oin SP3M?

• Self@employed individuals or tose 3itout a fi>ed income suc as

ta>i drivers5 a32ers5 farmers5 fisermen5 freelance consultants

etc8

• 7ouse3ives8

• Retired pu&lic sector employees8

$#at is t#e contri"ution rate for SP3M?

"e contri&ution rate for SP(% is &ased on one's afforda&ility and

can &e as little as R%0. 3it a ma>imum amount of R%,.5... a

year8

$#at are t#e "enefits of -artici-ating in SP3M?

• Annual dividend tat is su&ect to a minimum dividend rate of/808

• %em&ers are eligi&le to receive Deat $enefit )R%/50..* and an

!ncapacitation $enefit )R%05...*5 su&ect to terms and conditions8

3Ma%a!sia

RetirementSavings Sc#eme

'SP3M(



(, • Witdra3al of savings from Account / for ousing5 education5

medical purposes and upon reacing age 0. years6 and

• Full or partial 3itdra3al can &e made upon reacing age

008

$#at are t#e Government incentives for SP3M mem"ers?

• "a> e>emption of up to R%,5... per year )3it life insurance* for

self@employed individuals8

• Bovernment contri&ution of (. per year su&ect to a ma>imum

amount of R%(/. per year8 "is contri&ution is only for te period

of four )+* years &eginning from /.(+ : /.(;8 "is contri&ution is

limited to mem&ers &elo3 age 00 and 3ill &e credited into

Account (8

&o6 can I -artici-ate in t#e SP3M sc#eme?

!ndividuals must first &ecome an EPF mem&er &y su&mitting a

completed EPF Form 1 3it teir %yMad8 After approval5 mem&ers

can ten re9uest to participate in SP(% &y completing te SP(%

Selection Form i8e8 te EPF (,B)(%* Form8

&o6 to mae SP3M -a!ment?

• Lsing te (%alaysia Retirement Savings Sceme Payment Form :

MWSP ,A)/* tat can &e o&tained at te EPF counter or EPF3e&site8

• "e MWSP ,A)/* Form is to &e su&mitted togeter 3it te casK

ce9ue troug te follo3ing cannelsJ@

• EPF counter or mail6

• Appointed &an2 agents @ R7$ $an25 %ay&an2 $d5 Pu&lic

$an2 $d and $SN6 and• Appointed online internet &an2ing : %ay&an2 $d and Pu&lic

$an2 $d8

Are t#ere an! ot#er vo%untar! contri"utions avai%a"%e?

• !ndividuals 3o are self@employed or tose 3itout a fi>ed income

can still contri&ute voluntarily to te EPF troug Self Contri&ution8

• %em&ers can opt to increase or top@up te savings in Account (

for teir spouse or for teir parents8

You ave a coice

to save for your

retirement

%a2e te rigt

decision for your

future

A little &it ofsavings every

mont goes a

long 3ay to3ards

a appy and

comforta&le life

A""EN"!#N



(;



!ndividual Assessment of Financial Status You can eva%uate !our financia% status "! using t#e

Mont#%! Income1 Savings an E,-enses Ta"%e

"e%o64

Note4

Tota% E,-enses '8( s#ou% "e %ess t#an Tota% Income '=( Tota% Savings ':( '8 H = :(

MONT&BY IN:OME 'RM( MONT&BY EPENSES 'RM(Net !ncome )A* 7ousing 4oan

Spouse !ncome 7ire Purcase 4oan

7ouse Rent !ncome Oeicle 4oan

$usiness !ncome #ter 4oans

Dividend K $onus Pai =roacasting

E>amplesJ Astro5 !nternet5%o&ile Pone etc8#ter !ncome Maintenance

E>amplesJ @ 7ouse %aintenanceFees5 Property Assessment "a>

etc8

TOTAB IN:OME '=( Food 7ouseold

Oeicle %aintenance

MONT&BY SAVINGS 'RM( Pu&lic "ransport

EPF Contri&ution )(( > Net!ncome )A**

Ltilities

Savings From #ter Forms #f!nvestment )at least ; >

Net !ncome )A**8E>amplesJ@

!nsurance5 Annuity5 Stoc25 Lnit"rust5 AS$5 Savings for 7a etc8

Education E>penses

%edical E>penses

Cildren E>penses

Entertainment

#ter Fi>ed E>penses

TOTAB SAVINGS ':( TOTAB EPENSES '8(

"e recommended savings is 1. of your salary )(( EPF mem&er's contri&ution5 (/

employer's contri&utions and ; of savings from oter forms of investment*8

EPF now provides a Retirement Advisory Service (RAS), which aims to assist members to

enhance members’ awareness and knowledge on the importance of retirement planning.Members may seek RA services thro!gh"

(-

Saving and Retirement Plan

Documents

Transcript of Saving and Retirement Plan