CJMY
The Employees Provident Fund (EPF) has announced the implementation of the EPF Account 2 Support Facility to obtain personal financing which will be implemented in two phases.
The EPF noted that the facility offers a practical solution for members who are facing temporary liquidity issues by providing cash flow through personal financing with minimal impact on their retirement savings.
Members’ savings will remain intact in EPF Account 2 and continue to receive annual EPF dividends, allowing members to take advantage of compounding their retirement nest egg while addressing their short-term financial needs.
EPF Account 2 Support Facility Phase 1
Phase 1, opening on April 7, will cater to members who are 40 years of age or older and would remain open for a year. Phase 2, which will open for members under 40, will be announced later.
Eligible members who are 40 years of age or older may apply, subject to the readiness of participating banks.
EPF members under 55, with a minimum balance of RM3,000 in their EPF Account 2, can submit an advance notice of Age 50 or Age 55 Withdrawal and obtain personal financing of up to RM50,000.
The interest rate (conventional financing) or profit rate (Islamic financing) to be charged by the participating banks will range from 4% to 5%, lower and more affordable than the current market rate of 8% to 15%.
MBSB Bank and Bank Simpanan Nasional (BSN) are the participating banks, and more banks may be added in the future. The banks will administer the application process for personal financing, subject to their financing assessment and credit framework.
How to apply for Account 2 Support Facility.
- Check eligibility at https://fsa2.kwsp.gov.my beginning April 5
- Ensure a minimum of RM3,000 is in EPF Account 2
- Apply for personal financing online through participating banks
- Submit an advance notice of Age 50 or Age 55 Withdrawal to EPF based on the approved financing amount
The mechanics of the Age 50 or Age 55 withdrawal
The EPF has also explained the mechanics of the Age 50 or Age 55 Withdrawal:
If a member makes an advance notice for Age 50 Withdrawal, the principal and accumulated dividend from Account 2 will be paid into the member’s financing account with the bank at any age between 50 and 54, as chosen by the member, subject to a maximum tenure of 10 years.
If the member opts for Age 55 Withdrawal, the EPF will pay the principal and accumulated dividend from Account 2 into the member’s financing account with the bank at age 55. The amount paid will first be used to settle the remaining personal financing balance, if any, before returning any excess to the member.
“This facility is targeted towards members who have savings in Account 2 and are supported with a reasonable income to ensure they can afford the financing and repay it without compromising their retirement income adequacy and security,” said the EPF in a statement.
For more information on the Account 2 Support Facility, visit the EPF website at www.kwsp.gov.my or call the EPF Contact Management Center at 03-8922 6000.
Admin
