Cabinet green-light has been granted to amend Employees’ Provident Fund (EPF) Act to ensure a minimum of 9 percent annual interest rate to members during the four-year period from 2023 to 2026 period following Domestic Debt Optimisation (DDO).
This was based on the annual interest benefit percentages paid for EPF members during the past five-year period.
Under the DDO, the maturity of treasury bonds held by superannuation funds were extended from 2027 to 2038 with a step-down coupon structure of 12 percent until 2025 and 9 percent until maturity.
The government recently amended the Inland Revenue Act to increase the tax rate levied on the interest income of these funds from 14 percent to 30 percent standard rate.
“The government has recognised the requirement of ensuring the payments and benefits of the Employees’ Provident Fund without any burden to the pension payments and benefits of the members of that fund due to the local treasury bonds idealizing programme,” the Department of Government Information said.
