How much is the contribution rate?
A contribution constitutes the amount of money credited to members’ individual accounts in the EPF. The amount is calculated based on the monthly wages of an employee. The current rate of contribution is 23% of the employee’s wages of which 11% is from the employee’s monthly wage while 12% is contributed by the employer.
Effective 1 January 2007, the Account is divided into two parts, namely Account I and Account II. Contributions received on your behalf from your employer will be credited into the two accounts according to the following percentages:
1) Account I – 70% of monthly contribution
2) Account II – 30% of monthly contribution
What are the types of withdrawals available?
1) For Account I
Savings in this account is meant to be used for your retirement, and it cannot be fully withdrawn before you reach the age of 55, become incapacitated, leave the country or deceased (payment will be made out to your nominee / heir).
You are allowed to invest part of this savings to allow you to add the value of your savings.
2) For Account II
Savings in this Account is meant to help you to make early preparations for a comfortable retirement. Withdrawals are allowed for the purposes of:
(i) Attaining the age of 50 years;
(ii) Owning a house – the downpayment for your first house;
(iii) Settling the balance of your housing loan – first house;
(iv) Financing education for you and that of your children’s;
(iv) Medical expenses for you and that of your children’s
Where are they invested?
Your monthly contributions are invested in a number of approved financial instruments to generate income. They include Malaysian Government Securities, Money Market Instruments, Loans & Bonds, Equity and Property.
Source: www.kwsp.gov.my
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