Overview
The Employees' Provident Fund (known by its acronym EPF, or KWSP in Malay) is a Malaysian government agency that manages a compulsory savings plan and retirement planning for private and non-pensionable public sector employees.
The EPF functions through monthly contributions from employees and their employers towards saving accounts. While in savings these funds may be used in various investments by the EPF or, in some cases, by the members themselves.
Benefits
There are several benefits to contributing to the EPF, namely:
The EPF, by law, has a minimum dividend rate of 2.5%, but historically has had a much higher rate. For example, in 2014, the dividend rate was 6.75%.
Your EPF contributions are tax-free up to a maximum of RM4,000 per annum, since they are deducted from your chargeable income for calculation of income tax.
Withdrawal
At the age of 50, Malaysian citizens and permanent residents are allowed to withdraw up to 30% of their savings, and at the age of 55 they can withdraw their full savings.
A full withdrawal can also be made in the event that an EPF member emigrates or becomes disabled.
Foreign employees may choose to withdraw their funds partially or fully:
Partial withdrawal:
1. Akaun Fleksibel withdrawal
2. Housing withdrawal
3. Age 50 withdrawal
4. Education withdrawal
5. More than RM1 million savings withdrawal
Full withdrawal:
1. Death withdrawal
2. Incapation withdrawal
3. Leaving the country withdrawal
4. Age 55 and 60 withdrawal
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