There are a few known liberalization changes being made to how Employees Provident Fund (EPF) contributors can invest their money for diversification. This infographic aims to give you a 1 page information on what is happening and how it is going to affect your investment.
(read more: EPF withdrawal for unit trust investment – complete annual comparison table for foreign-exposed unit trust funds)
Malaysian mutual funds with offshore exposure are now being approved for EPF members’ investment scheme.
Starting Aug 1 2016, EPF members can invest in unit trust funds that are fully focused on investing overseas, as long as they are EPF approved funds, as it has removed its 30% foreign fund exposure cap on investments undertaken by members.
Currently, approved funds can hold no more than 30% foreign exposure. It is now fully liberalised with no ceiling or threshold.
Increased Withdrawal Limits & Basic Savings
Effective 1 January 2017, the eligible amount members will be allowed to invest under the EPF-MIS has been increased to up to 30 per cent in excess of their Basic Savings from Account 1, from the current 20 per cent.
Apart from that, the basic savings schedule has also been revised up.
Basic savings is a pre-determined amount set according to age in Account 1 to enable members achieve a minimum savings of at least RM 228,000 when they reach age 55. The basic savings quantum is benchmarked against the minimum pension of RM 950 per month for 20 years to support their basic retirement needs.
Lower entry cost for EPF Members’ Investment Scheme?
In May 2016 interview, EPF CEO said “We plan to move everything online within the next couple of years.”
“Its very similar to broking. In the past it used to be a remisier’s 1 or 1.5%. Today with online broking you’re paying maybe 0.20-0.25% bps.”
“So similarly we foresee that by moving everything online, we can bring a huge amount of savings to our members. From 3% to maybe 0.5%.”
Sources of information
http://www.bfm.my/bg-datuk-shahril-ridza-ridzuan-epf-diversification-at-the-crossroads.html
EPF set RM 228,000 as minimum target savings at age 55
http://www.theedgemarkets.com/my/article/epf-set-remove-30-cap