KUALA LUMPUR – Flood victims, who are contributors to the Employees’ Provident Fund (EPF), need not worry about withdrawing from their retirement funds to repair homes and infrastructure as the government has provided sufficient financial aid, said Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz.
Apart from the Bantuan Prihatin Rakyat and Covid-19 Special Aid, he said the government has allocated cash assistance of up to RM10,000 for each household affected by the floods and up to RM61,000 for those who suffered total loss.
In a Facebook post yesterday, he referenced the severe flood incident which hit the country in 2014, saying that the government did not allow withdrawals from the EPF.
“With this measure, the contributors need not worry about their EPF savings and dividends.”
As of now, he said almost RM101 billion has been withdrawn through i-Lestari, i-Sinar and i-Citra, with EPF members allowed to withdraw savings of up to RM71,000 to cushion the impact of the Covid-19 pandemic on their households.
Further withdrawals from the retirement funds would burden future generations who would need to shoulder the cost of care for the elderly.
“Almost 50% (six million) contributors have a contribution balance of less than RM10,000. 74% of them are Bumiputera and what’s more worrying is that 79% of them have less than RM1,000 in their accounts.
“The retirees need RM240,000 to live post retirement for 20 years with RM1,000 a month. With less than RM10,000 savings, six million members will not be able to retire safely.”
He said additional withdrawals will increase the number of contributors with less than RM10,000 savings to almost seven million people.
He added that it will force EPF to dispose of investments, reducing members’ dividends.
This, he said, will create a subsequent impact on the country’s bond and stock markets, resulting in a collapse of domestic and foreign investor confidence.
On another note, he added that there is RM270 billion that can be withdrawn by members over the age of 55 who are no longer subject to withdrawal conditions.
However, if they doubt EPF’s direction, savings can be withdrawn at any time.
“This will force the disposal of more EPF investments and continue to lower the value of members’ dividends.” – The Vibes, January 1, 2022
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