i-Saraan

i-Saraan, previously known as the 1Malaysia Retirement Savings Scheme (SP1M) was introduced in 2010. This is a government initiative to ensure that those who are self-employed and those without a fixed income to achieve a certain level of savings upon reaching the retirement age. The purpose is to encourage those who are self-employed and do not earn a regular income to voluntarily contribute to the savings scheme based on their capability. 

In Budget 2018, former Prime Minister and Finance Minister Datuk Seri Najib Abdul Razak announced that the government’s contribution to SP1M will increase to 15% subject to a maximum of RM250 per person per year for a period of five years from 2018 to 2022. 

Self-employed is defined as persons who derive income from their work and not an employee (Salaried employees who receive regular income are not eligible). Those who fall under the self-employed category include:

• Farmers / Fishermen / Taxi drivers
• Small business owners / Hawkers / Night market traders
• Babysitters
• Commission-receiving agents (eg. insurance agents, real estate agents)
• Freelancers (eg. those who receive payment for services including deejays, singers, actors, fitness instructors, consultants)
• Business owners (sole proprietors/partners) involved in the trading of goods and services
• Online business owners
• Professionals with their own practice (eg. accountants, doctors, lawyers)
• Housewives
• Pensionable Employees

i-Saraan Benefits

• EPF Dividends: until age 100
• EPF Death Benefit: RM2,500
• EPF Incapacitation Benefit: RM5,000
• EPF Tax Exemption: RM6k (shared with life insurance)
• 2014-2017: Government matching contribution 10% up to RM120 (for up to RM1,200 contributed)
• 2018-2022: Government matching contribution 15% up to RM250 (for up to RM1,667 contributed)
  Note: Government matching for contributors below age 55 only

Members’ contribution to the scheme may vary but is subject to a minimum of RM50 and a maximum of RM60,000 a year, and can be made anytime. The government contribution is limited to SP1M members who are under age 55. Savings under the scheme will receive annual dividends based on the current rate, just like other contributors. The withdrawal is subjected to standard EPF withdrawal regulations (Ac 2 age 50, Ac 1& 2 age 55)

Besides that, Malaysians working abroad are eligible to make contributions to the Employees Provident Fund (EPF) via the 1Malaysia Retirement Savings Scheme (SP1M).

Registration for i-Saraan can be made at the EPF office by filling out a special form and payment can be made at the counter or via agents such as Maybank, Public Bank, RHB Bank, Bank Simpanan Nasional and online at Maybank or Public Bank.

You can get more information about i-Saraan from official EPF link at http://www.kwsp.gov.my/portal/en/general/1malaysia-retirement-savings-scheme

3 steps to make contributions to i-Saraan through online banking (Maybank2u)

(REMINDER: You need to register i-Saraan at the EPF office before you do this, to entitle for government contribution)

Step 1: Login to your Maybank2u and go to “Pay” section, select “EPF” in “New Payment”

Step 2: Key in your EPF account number, name, IC number and the amount you want to contribute

Step 3: Remember to choose “i-Saraan / i-Suri Contribution” in EPF Account Type

More references:

1. Malaysians working abroad eligible to contribute to EPF. (2016, December 27).The Star, Retrieved from https://www.thestar.com.my/news/nation/2016/12/27/malaysians-working-abroad-eligible-to-contribute-to-epf/
   
2. Govt contribution to SP1M will be credited into accounts, EPF assures members. (2018, February 25). The Sun Daily, Retrieved from https://www.thesundaily.my/archive/govt-contribution-sp1m-will-be-credited-accounts-epf-assures-members-JUARCH528427