EPF Reverts To 11.00%

The statutory Employees Provident Fund (EPF) contribution rate by employees will revert to the original 11% for members aged below 60 and 5.5% for those 60 and above, effective the January 2018 salary for February 2018 contribution.

In a statement today, EPF said employers should ensure the right amount of contribution was deducted from their employees’ salary and remitted in accordance with the new rate.

“The contribution rates for employees and employers can be obtained by referring to the Third Schedule of the EPF Act 1991,” it said.

The government had announced a reduction in the employees’ contribution rate in 2016, following the tabling of the revision of Budget 2016 by Prime Minister Najib Razak. 

EPF said the reduction of the statutory contribution rate for employees’ share to 8%, which started in March last year, would end this month.

It also said that members who wished to contribute more than the statutory rate of 11% or 5.5% may do so by completing the Form KWSP 17A (AHL) or Form KWSP 17AA (AHL).

EPF declared a dividend rate of 5.7% for 2016, with a total payout amounting to RM37.08 billion.

It recorded RM46.56 billion in gross investment income in 2016, an increase of 5.25% compared with the RM44.23 billion recorded in 2015.

But concerns have also been rising that Malaysians may not be saving enough for their retirement. One survey found that most EPF withdrawals (before age 55) were used to buy houses, renovations and children’s education and that following withdrawals, the majority of respondents aged 55 and above would have an EPF account balance of less than RM50,000, a handful would have more than RM400,000 and a few would have nothing left.

The survey also revealed 79% of the respondents with a relatively small EPF account balance or had emptied their EPF account had placed their money in alternative saving schemes or chose to invest the funds for better returns.