‫ِبْس ِم ٱِهَّٰلل ٱلَّرْح َٰم ِن ٱلَّر ِح يِم‬

The Employees Provident Fund (EPF) in Malaysia manages several types of savings schemes for
employees, including Account 1 (for retirement), Account 2 (for housing and education), and
Account 3 (Flexible Account). Conducting an impact assessment for KWSP Account 3 involves
evaluating the effects and outcomes of this savings option on various stakeholders.

A Partial pension fund withdrawals are expected to boost economic activity, while having little
impact on inflation, Bank Negara Malaysia (BNM) said.
"The impact of the newly introduced [flexible] Account 3 of the Employees Provident Fund
(EPF) is going to be quite minimal," according to the central bank's governor Datuk Shaik Abdul
Rasheed Abdul Ghaffour. “But this would contribute to growth of the economy.”
Further, a planned increase in civil servant salaries would also have limited impact on price
growth pressure.
EPF member accounts have been restructured into three separate accounts effective from May
11, with 10% of the monthly contributions going into Account 3 that would allow withdrawals at
any time. The pension fund projected withdrawals of RM25 billion in the first year, following
the roll-out of Account 3.
The government, meanwhile, has announced an increase of at least 13% in civil servant salaries
from December this year involving an additional allocation of more than RM10 billion.
BNM kept its projections for headline inflation to average between 2.0% and 3.5% in 2024, as
well as for Malaysia’s economic growth to pick up to 4%-5% in 2024, from a 3.7% expansion in
2023.
Potential upside to growth could come from greater spillovers from the tech upcycle, more
robust tourism activities, and faster implementation of new and existing investment projects, the
central bank flagged.
Current forecasts of economic growth and moderating inflation provide “a very good window of
opportunity” for the government to implement the planned subsidy rationalisation, he added.