For many millions of Malaysians, the gig economy has helped them earn a living. Being a Grab rider, food delivery, online sellers, freelancer, farmer or content creator comes with an element of what is commonly called flexibility; however, there is one drawback for the flexible, and that is planning for retirement.
Self-employed persons are not required to contribute to the Employees Provident Fund as do conventional employees. The government, to fill this void, has rolled out i-Saraan scheme; a voluntary retirement savings scheme tailored for self-employed Malaysian gig workers.
The program pays participants for making their contributions consistently, and offers them a monthly EPF dividend on their contributions plus a government match on their equity.
What is the EPF i-Saraan Scheme?
i-Saraan is a voluntary contribution programme to provide retirement savings via EPF for the self-employed.
In the scheme, one contributes money to his/her EPF account in his/her own time. The government in turn gives back an incentive, depending on the amount contributed, but capped by the limits established by the program each year.
Apart from the assistance from the government, the investors also get a dividend on their EPF investment which helps them to build their holdings over a period of time due to compounding benefits.
Eligibility for i-Saraan
The program has a few eligibility requirements. Must be a Malaysian citizen and below 60 years old. The scheme is due to be rolled out to the self-employed, such as electricians, people who work in the p-hailing sector, digital creators, fishermen, farmers and online entrepreneurs and drivers of e-hailing platforms.
Applicants should not be receiving regular EPF contributions from their employer via a regular full-time employment agreement. The main beneficiaries of the programme are income-earners.
How to Register for i-Saraan?
It is simple and can be done digitally via the EPF platform. Click into the i-Saraan section then click the Register link.
You will then have to register yourself as an employed individual and select which category most closely matches your profession. The details provided will be checked and after obtaining an approval letter you would be able to make voluntary contributions with your i-Saraan status on.
How to Contribute to Your EPF Account?
Once activated, you are allowed to send any money you may have depending on your budget.
The direct payment can be made via i-Akaun application through internet banking services. There are also some platforms that offer automatic saving features for the gig crowd, which can simplify the savings process so they don’t have to fund transfers manually.
The beauty of i-Saanar is that the contributors can establish a monthly or weekly contribution or even any contribution that they can afford.
How the Government Matching Incentive Works?
In comparison to any other mandatory savings scheme in the country, one of the most significant benefits of i-Saraan is associated with the government incentive for any savings done in a voluntary manner.
Eligible contributions will be computed by the Government and corresponding matching incentives will be deposited directly into the participants’ EFPs account throughout the year. A claim form is not required.
Since this incentive gets credited automatically, donors have just one thing to concentrate on and that is a periodic deposit. The more you stick to the concept of regular contributions towards retirement, the more you can build retirement benefits, in the long run.
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Additional Benefits for Gig Workers
Apart from the government incentive, there are some important factors to consider about i-saraan.
Participants can still access the equivalent of an annual EPF dividend that has historically beaten many of the traditional savings accounts. There’s even a chance you can get some tax breaks on top of it which will decrease your taxable income, but raise your retirement savings.
i-Saraan offers a formal, cost-effective approach for establishing financial security for freelancers and gig workers who don’t have access to an employer-sponsored retirement plan.
FAQs
What is the ISARRAN scheme?
i-Saraan is a voluntary savings scheme for self-employed (including gig workers and freelance individuals) Malaysians. It offers certain government incentives for deposits to retirement accounts.
Can the Grab riders join i-Saraan?
Yes. Some of the main sector participants who will be able to use the scheme include grab drivers, delivery riders, and other gig economy workers.
Do I have to fill out a claim in order to get the government incentive?
No. After completion of the registration in i-Saraan and successful settlement of eligible contributions, the government incentive will be automatically credited to your EPF account.
