KUALA LUMPUR – There is no need for another round of Employees Provident Fund (EPF) withdrawals as the nation’s economy shows strong indicators of recovery, said Finance Minister Datuk Seri Anwar Ibrahim.
In a written parliamentary reply, Anwar said recovery is evident in the increasing number of active EPF contributors, from both employees and employers, in December 2022 compared to December 2021.
The same period also showed an increase in the number of registrations of new EPF contributors, said Anwar, who holds both the prime minister and finance minister posts.
He was replying to Tan Sri Muhyiddin Yassin (Pagoh-PN), who asked whether the government would allow another round of EPF withdrawals.
For the same period, the number of active EPF contributors had increased by 9%, to 8.39 million from 7.69 million. Active employers, meanwhile, increased by 7%, from 550,825 to 588,714.
Registration of new contributors has also increased from 421,643 to 635,989, while new contributing employers rose from 72,518 to 93,669 in the same period.
The Tambun MP also stated that the government is finding new solutions through Budget 2023 to alleviate the burden of the people without another EPF withdrawal facility.
He said there are long-term consequences to the withdrawals that were allowed during the movement control order amid the Covid-19 pandemic. This includes reduced retirement funds for many EPF contributors.
As of December 31, 2022, 6.7 million or 51% of contributors below the age of 55 have saved less than RM10,000 in their account after these withdrawals, said Anwar.
“Moreover, all four withdrawal facilities have led to a noticeable drop in active contributors reaching the minimum savings of RM240,000 at the age of 55, from 36% in 2020 to 29% in 2022.
“This situation shows that 71% or two-thirds of active members below the age of 55 are in a serious situation where they do not have enough retirement funds, and are well above the poverty line,’’ he said.
EPF also projected that these members needed to work for an extra four to six years beyond the age of 55 to meet the minimum savings amount.
Yesterday in the Dewan Rakyat, Deputy Finance Minister I Datuk Seri Ahmad Maslan said the government would not allow another round of withdrawals from EPF as the latest figures showed drastically reduced savings for contributors.
He said as a result of the special withdrawals allowed during the Covid-19 pandemic, the median savings for all races of EPF contributors went down from RM16,600 in 2016 to RM8,100 in 2022. – The Vibes, February 17, 2023
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