EPF contributors must be aware of default risks for Account 2 support facility - economist
03 Apr 2023 05:48pm
photo for illustrative purposes - FILEPIC
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the support facility was designed to allow EPF contributors to obtain financing from financial institutions, and the money used as collateral involved their retirement funds.
"The FSA2 provides relief to contributors in terms of financial and cash needs.
"Nevertheless, there are risks, such as default risks. So, they (the contributors) must be aware of the risks involved if repayment cannot be made in the specified time,” he told reporters after the annual BNM Governor’s Address on the Malaysian Economy forum organised by the Malaysian Economic Association today.
In a statement today, EPF said the FSA2 would be implemented in two phases, and EPF members that fulfil the eligibility requirements could apply for the facility from the participating banks, including MBSB Bank and Bank Simpanan Nasional (BSN).
The fund said it might consider adding more participating banks in the future.
"During Phase 1, which will begin on April 7 and remain open for one year, eligible members who are 40 years of age or older may apply, subject to the readiness of participating banks.
"The start date for Phase 2 for members under 40 years of age will be announced in due course,” it said.
Under the facility, all Malaysian EPF members under the age of 55 can submit an advance notice of Age 50 or Age 55 Withdrawal, provided they have a minimum amount of RM3,000 in their EPF Account 2.
The maximum financing amount has been fixed at RM50,000, subject to EPF Account 2 balance, with a repayment tenure of up to 10 years. - BERNAMA
