New Retirement Scheme for Self Employed

Starting from 3rd January 2010, Employees Provident Fund (EPF) will launch 1Malaysia Retirement Saving Scheme to help self-employed financially during their retirement age. This scheme was announced last October by the Prime Minister during the tabling of the 2010 Budget.

This Retirement Saving Scheme is designed to provide individuals without a fixed monthly income with a degree of financial security in their old age. The retirement scheme will be open to self-employed individuals such as farmers, fishermen and taxi drivers to petty traders and business owners.

Unlike the conventional EPF saving scheme, the amount contributed into the 1Malaysia Retirement Saving Scheme was entirely at the contributor’s discretion. Contributors can choose to contribute at least RM50 or up to maximum of RM5,000 per month as their retirement savings. Contribution is totally voluntary and contributors are also not required to contribute savings on a monthly basis but when they can afford to.

Savings under this scheme will receive annual dividends as declared by the EPF with additional 5 per cent which contribute by the Government. However, the additional dividend is capped at maximum of RM60 per year for the next five years from 2010 to2014.

Those interested to apply for the scheme can fill the KWSP 16G (1M) Form which is available at any EPF branch nationwide or download from the myEPF website at starting from 3rd January 2010. The forms are to be returned at any EPF branch or by mail.

However, individuals who are not EPF members have to register with the EPF first by completing KWSP 3 Form and submitting it to the EPF before applying for the scheme.

Existing EPF members, who turn self-employed, are also eligible and may opt for this new scheme.

Savings for the scheme can be deposited via cash or cheque using the KWSP 6A(2) Form at any EPF Payment Counter nationwide and withdrawals are governed by the present EPF withdrawal procedures and conditions.

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