Recently, there are some circulations on blogs and emails regarding EPF's Housing Loan Monthly Installment Withdrawal. The circulations claimed that the EPF is not paying dividends for the amount that is reserved under Housing Loan Installment Withdrawal scheme.
Our verification with KWSP has confirmed that the accusations are incorrect. Although it appears that those who participated in the program did not receive dividends that they entitled for, they will receive the dividends eventually when KWSP announce the dividend for year 2008.
Public confusion arises due to the lack of understanding of how the mechanism works. When a member's application for Housing Loan Monthly Installment Withdrawal is approved, the total amount of savings that will be taken out from Account 2 for the purpose of this withdrawal will be put aside in a separate account. The savings in this separate account will continue to earn dividends until it is used to pay for monthly installment. The dividends on this amount will be credited into Account 2 after dividend for the year is declared.
Since the Housing Loan Monthly Installment Withdrawal was first introduced in January 2008, and as dividend for 2008 is yet to be declared, it appears that participating members do not receive dividends for the approved amount that is reserved in the separate account.
KWSP has officially posted a news article on its website to clarify this confusion.Labels: EPF, Housing Loan