The Employees Provident Fund (EPF) has announced a scheme called i-Sinar, which will permit eligible members to take an advance from their Account 1. The scheme is expected to benefit two million members.
The facility will be open for application starting next month (December).
According to EPF chief executive officer Tunku Alizakri Alias, the advance will be credited into members’ bank accounts in January, once applications are received.
However, Alizakri emphasised that this facility is not a “withdrawal” but rather an “advance”, pointing out that eligible members will need to replenish the amount withdrawn.
The provident fund said that i-Sinar will only be open to active members who have lost their jobs, or they are on no-pay leave, or have no other source of income.
“This facility has allowed us to assist those in need of assistance, as well as work with our mandate — to safeguard members’ future retirement savings,” said Alizakri.
Generally, eligible members will have access to up to 10% of their savings in Account 1, subject to having a minimum balance of RM100.
For those with an Account 1 balance of RM90,000 and below, they will have access to any amount up to RM9,000, with the advance to be granted on a staggered basis over a period of six months.
For those with balances above RM90,000 in Account 1, they still have access to up to 10% of their Account 1 savings, but it will be limited to a maximum of RM60,000.
Members that apply for the facility will be required to replace the full amount advanced with all future contributions to be credited into Account 1 in its entirety, until the amount advanced is replenished.
“There is no timeline for the members to replenish their accounts. This will only start when the affected member gets re-employed or when their businesses start picking up again,” Alizakri said during a media briefing today.
Meanwhile, Alizakri pointed out that there is no such thing as a “free lunch” as there will be implications for eligible members if they choose to utilise this facility, given that they will forgo their compounded returns when they take an advance on their account.
vKUALA LUMPUR, 14 November 2020: The Employees Provident Fund (EPF) is finalising the details of the access to Account 1 facility, to be called i-Sinar, and will announce it on 18 November 2020. i-Sinar was developed after exhaustive and detailed consultation with key stakeholders in order to address the present challenges faced by affected members while ensuring some future retirement savings for them.
The EPF believes that the total amounts available under i-Sinar together with the maximum withdrawal of RM500 a month from Account 2 under the i-Lestari facility (launched in April 2020), will allow affected members to sustain themselves in the short term. i-Sinar further expands on the estimated total withdrawal amount of RM30 billion under i-Lestari which will be ending March 2021.
Applications for i-Sinar will begin from December 2020 and amounts will be credited into members’ bank accounts starting January 2021 onwards.
Issued by the EPF Media Desk
Corporate Affairs Department
14 November 2020