KUALA LUMPUR: A new pension-style withdrawal structure under the Employees Provident Fund (EPF) will apply only to new members who register after the mechanism is implemented, says Deputy Finance Minister Lim Hui Ying.

She said the monthly pension payout scheme will not affect the withdrawal rights of existing contributors. Current members will not be automatically placed under the new system but may opt in voluntarily.

“The proposed restructuring of EPF accounts will introduce a new mechanism that allows part of a member’s savings to be allocated specifically to provide a regular income stream throughout their retirement years,” she said during a question-and-answer session on Thursday (Aug 7).

She was responding to Mordi Bimol (Pakatan–Mas Gading), who had asked about the rationale for introducing monthly pension payments as outlined in the 13th Malaysia Plan (13MP) by Prime Minister Datuk Seri Anwar Ibrahim.

Lim said the new structure aims to ensure retirement savings last longer, in line with rising life expectancy.

Under the proposed system, members’ savings will be split into two components upon reaching the minimum retirement age: a flexible savings portion, which can be withdrawn at any time, and a retirement income portion, which will be disbursed on a monthly or periodic basis until depleted.

“This structure is designed to strengthen income security in old age and support more sustainable financial planning,” Lim said.

Meanwhile, Lim addressed concerns raised by Tan Sri Muhyiddin Yassin (Perikatan–Pagoh) over EPF’s investment performance, noting that the fund recorded a 13% decline in returns for the first quarter ending March 31, 2025, compared to the same period in 2024.

She said the drop was due to multiple factors but assured that a recovery is anticipated in the second quarter.

“We expect a positive response and rebound in the second quarter of 2025 compared to the same period last year,” she said, without elaborating on the exact causes behind the decline.

According to the EPF, during Q1 2025, equities contributed RM10.81bil, a 23% decline from RM14.02bil recorded in Q1 2024, mainly due to weaker performance across global equity markets and a challenging investment climate.

EPF said equities continued to be the highest contributor, accounting for 59% of total investment income, while fixed income continued to anchor capital preservation, contributing RM5.99bil or 33% of total investment income.