EPF Introduces New Three-Tier Retirement Savings Framework
The Employees Provident Fund (EPF) has launched the Retirement Income Adequacy (RIA) Framework, a comprehensive savings benchmark designed to help Malaysians achieve financial security post-retirement. Effective January 2026, the framework introduces three tiers of savings — basic, adequate, and enhanced — aligned with individual retirement aspirations and lifestyles.
A Flexible Approach to Retirement Planning
The new RIA Framework replaces the single benchmark with a tiered system that:
- Basic savings: 60% of adequate savings, amounting to RM390,000.
- Adequate savings: RM650,000, equivalent to 240 months of RM2,690, as per the Belanjawanku 2024/2025 guide.
- Enhanced savings: Double the adequate savings benchmark at RM1.3 million.
This revision provides flexibility for members to target savings aligned with their desired retirement lifestyle.
Transition Plan and Reviews
To ease the transition:
- The basic savings benchmark will increase annually by RM50,000 until it reaches RM390,000 by 2028.
- Savings withdrawal limits above RM1 million will be aligned with the enhanced savings benchmark, increasing gradually by RM100,000 annually over three years.
Starting 2029, the framework will be reviewed every three years to reflect updated data from the Belanjawanku Guide.
How Belanjawanku Guides Retirement Savings
The Belanjawanku Guide, developed by EPF and the Social Wellbeing Research Centre (SWRC) at the University of Malaya, outlines the minimum monthly expenses required for a decent living standard.
For 2024/2025, the guide estimates a single elderly individual needs RM2,690 monthly for an adequate retirement. The RIA Framework builds on this to provide tailored savings recommendations.
Enhanced Flexibility and Investment Opportunities
Under the Members’ Investment Scheme (MIS), starting January 1, 2026, members can transfer 30% of savings exceeding the basic benchmark in their retirement account to approved funds managed by fund management institutions.
This flexibility encourages members to grow their savings through diverse investment avenues.
EPF CEO Highlights Commitment to Secure Retirement
EPF CEO Ahmad Zulqarnain Onn emphasized the importance of the framework in addressing rising costs and managing household expenses.
“By introducing tailored savings benchmarks, we aim to guide Malaysians toward a dignified retirement. These initiatives reflect EPF’s commitment to adapting to changing socioeconomic realities while ensuring no one is left behind,” said Ahmad.
