13 February 2019

What is EPF i-Saraan? With 15% Incentive?

Last year, EPF has introduced a scheme called Caruman Sukarela Insentif Persaraan (i-Saraan), designed to allow individuals with irregular monthly income or who are self-employed to save for their retirement while enjoying the same benefits as EPF members.

Why i-Saraan is Important in Malaysia?

Recently, the EPF revealed that out of Malaysia’s 22 million working-age population, 62% were self-employed, outside the formal labour force and not covered by any form of social protection. More and more people became freelancers, Grab drivers, commission-receiving agents, online business entrepreneur nowadays...

So, this scheme definitely is a very good initiative by the Government to ensure that this group of people able to achieve a certain level of savings upon reaching the retirement age. Forced saving is the best way to save up, but this was largely been neglected by this group of people all this. It could become a social problem in the future!

With this, hopefully it could reduce the number of senior citizens who are reliant on program allocations by the Society Welfare Department

15% Government Incentive?
Am I eligible to get it?

a) Malaysian Citizen;
b) ‘Self-employed Persons' refer to individuals who derive income from their work and are not an employee;
c) Registered as an EPF member; and
d) Has opted to contribute under the i-Saraan by submitting Form KWSP 16G(1M) click here to download form to nearest KWSP office. Alternatively, you can get the form for free over-the-counter.

How to Make Contribution?

  • Submit Form KWSP 6A(2) with cash/cheque at the EPF counter/mail or appointed bank agent counter such as RHB, MBB, PBB and BSN, or
  • Online Banking: Maybank and Public Bank (this is the preferred method)

Payment Limit:
   1. No Minimum amount (only in Ringgit); and
   2. Maximum of RM60,000 yearly only

Special Government Incentive
Members who save under the scheme shall receive Government contribution of 15% on the amount contributed, subject to a maximum of RM250 a year (New rate effective 1 January 2018). The Government contribution has been extended until 2022. And, this is only applicable to members who are under age 55.

The EPF will routinely make Government contribution claims based on accumulated contribution for the first (January to June) and second (July to December) halves of the year. Upon receiving the contribution payment from the Government, the amount will be credited into members' Akaun 1 (Retirement Account).

Source: EPF website

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