SP1M stands for Simpanan Persaraan 1Malaysia.
1Malaysia Retirement Savings Scheme is 1MRSS.
Self-employed individuals, housewives and those without a fixed income do not have a formal retirement protection scheme like the ones enjoyed by the private sector workers (EPF) and public sector employees (pension scheme).
What does SP1M aim to do?
- Provides an avenue for self-employed individuals or those without a fixed income to save for their retirement.
- This scheme is designed to encourage these individuals to contribute voluntarily based on their affordability for their retirement.
- Demonstrate the Government’s concern for this group of individuals by giving them incentives to save for their retirement.
Who is eligible to join SP1M?
- Self-employed individuals or those without a fixed income such as taxi drivers, hawkers, farmers, fishermen, freelance consultants etc.
- Housewives
- Retired public sector employees.
What is the contribution rate for SP1M?
The contribution rate for SP1M is based on one’s affordability and can be as little as RM50 with a maximum amount of RM60,000 a year.
What are the benefits of participating in SP1M?
- Annual dividend that is subject to a minimum dividend rate of 2.5%.
- Members are eligible to receive Death Benefit (RM2,500) and an Incapacitation Benefit (RM5,000), subject to terms and conditions.
- Withdrawal of savings from Account 2 for housing, education, medical purposes and upon reaching age 50 years.
- Full or partial withdrawal can be made upon reaching age 55.
What are the Government incentives for SP1M members?
- Tax exemption of up to RM6,000 per year (with life insurance) for self-employed individuals.
- Government contribution of 10% per year subject to a maximum amount of RM120 per year. This contribution is only for the period of four (4) years beginning from 2014 – 2017. This contribution is limited to members below age 55 and will be credited into Account 1.
How can I participate in the SP1M scheme?
Individuals must first become an EPF member by submitting a completed EPF Form 3 with their MyKad. After approval, members can then request to participate in SP1M by completing the SP1M Selection Form i.e. the EPF 16G(1M) Form.
How to make SP1M payment?
- Using the 1Malaysia Retirement Savings Scheme Payment Form – KWSP 6A(2) that can be obtained at the EPF counter or EPF website.
- The KWSP 6A(2) Form is to be submitted together with the cash/ cheque through the following channels:
- EPF counter or mail
- Appointed bank agents – RHB Bank, Maybank Bhd, Public Bank Bhd and BSN
- Appointed online internet banking – Maybank Bhd and Public Bank Bhd
Are there any other voluntary contributions available?
- Individuals who are self-employed or those without a fixed income can still contribute voluntarily to the EPF through Self Contribution.
- Members can opt to increase or top-up the savings in Account 1 for their spouse or for their parents.
- Individuals can invest regularly through Money Tree. This can help you to make the right decision for your future.
Remember, a little bit of savings every month goes a long way towards a happy and comfortable life.
