By Thanesh Veeramutu
KUALA LUMPUR, 27 September 2025: The Employees Provident Fund (EPF) has announced a significant policy revision, confirming it will increase the excess savings withdrawal threshold from RM1 million to RM1.1 million beginning in 2026. This strategic adjustment aims to provide members with greater flexibility in managing their retirement funds, a necessary response to the dynamics of escalating living costs and longer life expectancies within the nation.
Under the revised framework, the definition of excess savings will progressively move upwards. Starting next year, members will be permitted to withdraw any amount surpassing RM1.1 million in their accounts. This limit is scheduled to increase further to RM1.2 million in 2027 and subsequently to RM1.3 million in 2028. The fund stated that the staggered approach is intended to harmonize withdrawal access with demographic and economic realities while securing members’ foundational savings for their post-employment years.
The policy change coincides with the implementation of a three-tier Retirement Income Adequacy framework. This new system gradually elevates the savings target for contributors reaching age 60, culminating in a benchmark of RM390,000 by 2028. This integrated approach to retirement planning underscores the EPF’s effort to strengthen long-term financial security for its members.
Simultaneously, the fund reported positive trends in national retirement readiness. As of last year, 37 per cent of active formal contributors successfully achieved the Basic Savings benchmark, marking a notable increase from the preceding year. Among the 51 to 55 age bracket, the share meeting this benchmark rose to 42 per cent, reflecting effective policy intervention. The EPF attributed these gains partly to its May 2024 restructuring, which allocated a larger share of contributions to the retirement account, coupled with a substantial 62 per cent jump in voluntary contributions last year. The EPF confirmed its ongoing commitment to enhancing its scheme to support robust financial security in retirement.
