Dont like giving an unclear, half story here. So tried to simulate as close as possible to the proposed 2 tier scheme. I used RM500k as the 2 tier cut-off, instead of RM600k as I do not have that data.



The impact on the >RM500k holders in EPF can be quite painful, losing RM43k for every RM1 million if <RM500k group's dividend is increased by 1% above the current 1 tier method.

P/S In doing this calculation, I think the average >RM1000000 group has RM1.5 million. If yours is more than RM1.5 million, then you are better than the average in this group!

Yes, exactly. Hopefully it can be targeted where it matter the most with negligible effect on other contrbuter. I have the following info on total contributor that fall within a certain amount of saving and the total value but no info on how many is actually making minimum wage.



This post has been edited by backspace66: Oct 25 2020, 09:05 PM


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Thanks. Got similar data earlier.

My rough calculation using data from end of 2018, the additional value on top of 600k consitute around 8-9 % of the total saving. This is after deducting the value of 600k for each individual that exceed this amount.

So roughly for every 1% less dividend on amount greater than 600k , will lead to a meagre gain of just 0.1% of those with value less than 600k. Sorry i am not sure how they are going to make this worthwhile.

This post has been edited by backspace66: Oct 26 2020, 09:24 AM

At the moment its the same rate for all regardless of age groups.
Only the contribution rate differs for those above 60, if ayam not mistaken.

On my first look at this, I was against the 2 tier. My RM1 is the same as anyone's else RM1. People work and save hard for retirement and now face unfair discrimination.

On the second look, maybe if the 2 tier is split as <RM200k and >RM200k, helping the <RM200k with a bigger base in >RM200k, then I will not mind as much.

But then again, is EPF a charity body in the first place? Its core mission is ???

I question whether it can legally do this 2 tier thing.

Cheerio.

While i agree that epf is not a charity organisation, but one of the objective is to make sure than epf contributor have sufficient fund to sustain their livelihood beyond the retirement age. Which is why i would agree if this is applied only to someone who is making minimum wage or alternatively to someone who havent reach the minimum target of saving which is right now set at 240k.

My issue is with the suggested tiered dividend starting from 600k. As the impact is substantial loss(in term of dividend) for contributor who exceed this amount and minimal gain(in term of dividend) for the rest. Imagine the following scenario;

1) no tier,
5% dividend

2) tier dividend (extreme case)
Less than 600k :5.5% dividend
Above 600k : 0% dividend

Even taking out all the dividend only leads to a meagre gain for the rest.

This post has been edited by backspace66: Oct 28 2020, 08:27 AM

taking dividend from Top half to donate to bottom may backfire

1)No more incentive, once you reach the cut off limit eg RM600k, people would try to avoid KWSP, try to take it out

2)Alot more people would come in to gain from the higher dividend upto that cut off limit, after that they would go 1)

3) End up the top will shrink, the bottom end will grow very fast since there is incentive, how long can it last?

For now,the top ends are becos people do not withdraw even though they can. Try change that see if they stay...

Yes when that happens everything goes back to square one n everyone will get the same dividend.

Cross subsidy should not be applied if government wants to help B40. The real problem is the earning power and productivity.

Anyone here invest in UT using their EPF. With the EPF dividend record ranging from 4.5% - 6% in recent years, I feel that is quite a decent return for basically zero risk.

Anyone that invested in UT using EPF funds can explain further their reasoning? I know long term UT can generate better return but risk against no risk.

I actually invest in unit trust to capitalize on short term opportunity. This makes sense only because of the zero sales charge trhough fsm. Other provider also provides zero sales charge only until next year, regardless, FMI such as public mutual charges at 0.5% prior to this promotion anyway. Just take note that all of this is done through epf i-invest if you want to enjoy the zero sales charge.

Just for the record i started with epf i-invest since march this year. FSM actually give me the opportunity to switch with zero charge or minimal charge which i have done quite a few times since then to minimize/manage my risk.

Most unit trust will not be able to beat epf especially if we take a look at 10 year return. Of course there are exception and many can beat epf return in the short to medium term.

This post has been edited by backspace66: Oct 28 2020, 04:43 PM

Rhis 0% sales charge campaign will end next year if there's no extension.

If we are paying personal income tax, we are hit with a higher tariff the more we earn. Why should our hard earned EPF savings be earning less interest for the upper tiers ?

I am totally against any form of negative dividend restructuring for the >1M or >500K bracket.

At worst case, maintain the current status quo where a flat rate is applied to all.

Yes, that is what i written over there.

FSM is already at 0% before that since existence of epf i-invest, whether the zero sales charge campaign continue next year or not is irrelevant.

Public mutual 0.5% , not enough to discourage me even when it is not extended and of course only for PGSF.

if EPF do not value top depositors then different story

dont give ideas to epf la pls.

I plan to live of epf income after retirement, so hoping 4.5-5.5% yield maintain regardless of savings amount.

I thk this is fair to everyone

Late to the party and saw this discussion going on. Did the survey and oppose the proposed tiering system. I got a feeling it going to be bulldozed into effect anyway and the survey is just a PR exercise. If it comes into effect, I hope there will be a way for people to slip under the tier with the higher dividend. And perhaps it is a good time to halt self-contribution at the moment.

e-Pengeluaran
Online withdrawal application via i-Akaun has now been extended to Age 50 Years, 55 Years, 60 Years and Withdrawal for Savings More Than RM 1 Million

Details: https://www.kwsp.gov.my/documents/20126/131...an_01012019.pdf

EPF: Don't touch your Account 1 savings, says CEO

https://www.thestar.com.my/news/nation/2020...avings-says-ceo

PETALING JAYA: The Employees Provident Fund advised its members' against withdrawing savings from Account 1 to address the challenges brought on by Covid-19.

...

Alizakri said that allowing members to withdraw from Account 1 could damage their future well-being and advised members to approach EPF's Retirement Advisory Service (RAS) officers to help plan their finances as they deal with current challenges.

He said accessing funds in Account 1 should not be the only way for members to weather difficult times as the government has provided numerous means of direct financial assistance.