The Employee Provident Fund (EPF) is a retirement scheme that aims to help workers in Malaysia accumulate savings for their later years. Every month, workers are required to contribute 11% of their salary to their EPF accounts. On top of that, employers also contribute 12% of the salary to the employee’s EPF account.
EPF then invests its members’ savings in equities, bonds, money market instruments and real estate and infrastructures to generate dividends. Managed by the government, EPF offers a guaranteed minimum dividend of 2.5% p.a. on your savings.
If you didn’t know, aside from contributing to your own EPF account, you can also contribute to your wife’s retirement savings through the EPF i-Sayang programme.
What Is EPF i-Sayang
Launched in 2023, EPF i-Sayang allows husbands to voluntarily transfer 2% of their monthly employee contribution to their wives’ EPF account. The word ‘sayang’ means love in the Malay language.
The contribution will be credited into the wife’s EPF account according to the usual allocation rates, whereby 75% of it goes into Akaun Persaraan (Retirement Account), 15% into Akaun Sejahtera (Wellbeing Account) and 10% into Akaun Fleksibel (Flexible Account).
Currently, only husbands are able to make this transfer to their wives through EPF i-Sayang.
Upon successful registration, the transfer will occur automatically each month when a contribution is credited to the husband’s EPF account.
The transfer is irreversible until death or a divorce so make sure you have given the decision some careful consideration before applying.
How Much Can You Contribute To Your Wife’s EPF Account?
The i-Sayang contribution amount depends on how much the husband or contributor’s contribution. For example, a husband earns RM2,000 a month. He is required to set aside 11% of his salary to his own EPF account, which is RM220.
Employee contribution amount
RM2,000 x 11%
= RM220
i-Sayang transfer amount
If he opts to participate in the i-Sayang scheme, he will transfer 2% of his contribution to his wife’s EPF account, which is RM40 in this case.
(2% / Employee contribution rate) x Employee contribution amount
(2%/11%) x RM220
= RM40
In the situation whereby the husband is contributing more than the statutory rate on voluntary basis, the amount transferred to the wife’s account will also include the husband’s voluntary excess amount.
Using the same example, a husband earns RM2,000 a month. He is required to set aside 11% of his salary to his own EPF account, which is RM220.
On top of that, he contributes an extra 3% of his salary to his EPF account. His total employee contribution amount would be RM280.
Employee contribution amount
RM2,000 x (11% + 3%)
= RM280
Transfer amount
(2% / Employee contribution rate) x Employee contribution amount
(2%/11%) x RM280
= RM51
Registering For EPF i-Sayang
All EPF members below 75 years of age are eligible to contribute to the EPF accounts of their legal wife registered under Malaysian law through the EPF i-Sayang scheme. Recipients needs to be Malaysian citizens below 75 years of age.
Husbands or contributors can register for i-Sayang online via the EPF i-Akaun app or site according to the following steps:
Step 1: Log into EPF i-Akaun.
Step 2: Click on the i-Sayang tab.
Step 3: Choose i-Sayang Registration menu to register.
Step 4: Input the recipient using her Identification Card number.
Step 5: Confirm and submit application.
Step 6: Receives message confirming receipt and registration of application in the inbox of the i-Sayang Application Status tab.
Contributors can check the application status by clicking on the i-Sayang tab and choosing the Application Status menu. You will be able to see the recipient’s details and ‘Active’ status on your Application Status screen. Meanwhile, recipients can check their application status at any EPF physical counter or call the EPF Contact Management Centre.
Alternatively, you can also register for EPF i-Sayang at any EPF physical office or Self-Service Terminal.
Although there are more dual-income families in Malaysia now, many men remain as sole breadwinners and women assume the role of a caregiver in some households. A majority of households in the country’s bottom 40 income group had only one breadwinner, while 59.0% and 75.5% of households in the middle 40 and top 20 income groups had dual incomes. EPF i-Sayang allows husbands to set aside funds for their wives, providing financial security to them, especially if they’re housewives who may not have EPF savings from mandatory contribution. As they’re using a portion of their monthly employee contributions to EPF, it will not deter them from fulfilling other financial commitments.
Read Also: Guide To EPF’s Voluntary Self-Contribution For Growing Your Retirement Savings
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