The Employees Provident Fund (EPF) will restructure its members’ accounts with effect from Jan 2, 2007, in a move to enable its members to increase their savings for retirement.

The EPF said on Dec 29 under the restructuring, the current three accounts would be consolidated into two.

The current three accounts are Account One (60% of members’ savings), Account Two (30%) and Account Three (10%).

With effect from Jan 2, the number of accounts would be consolidated into Account One (70% of members’ savings) and Account Two (30% of members’ savings).

“The savings currently in Account Three, which are used for critical illness-related withdrawals, will be incorporated into Account Two initially. Subsequent contributions after Jan 2, 2007 will be channeled into Account One and Account Two in the proportion of 70% and 30% respectively,” it said.

The EPF said this would result in the members having a larger amount for housing, education or medical withdrawals.

“With the changes, members will have to prioritise their pre-retirement withdrawals carefully. This is because all these withdrawals will be made from the same account – Account Two,” said EPF senior public relations manager Nik Affendi Jaafar.

He said the restructuring of the members’ accounts from three to two would bring a multitude of benefits to members in the long run in the form of increased funds for retirement and greater flexibility and control over the management of their funds for their current needs.

Account One cannot be withdrawn by members before they reach 55. However, the members can invest a portion of their savings in Account One in investments managed by approved external fund managers.