EPF states opposition to more withdrawals amid plunging savings

SHAH ALAM – The Employees’ Provident Fund (EPF) does not favour another round of early withdrawals as many Bumiputera account holders have very low retirement savings.

This, said its chief executive officer Datuk Seri Amir Hamzah Azizan, follows numerous pandemic-related withdrawals which have eroded the savings for Bumiputeras and ethnic Indian contributors.

“We cannot allow more withdrawals. The base range after the pandemic has become too low for some groups,” he said during the EPF 2022 financial performance media briefing.

The median EPF savings for Bumiputera savers have plummeted from RM15,500 to RM4,900 as of December 2022, which is a significant 70% drop.

The savings for ethnic Indians meanwhile dropped 40% from RM25,700 to RM14,900 while ethnic Chinese recorded the lowest reduction from RM45,800 to RM45,200 following the end of the pandemic.

The total amount of withdrawals during the pandemic period was RM145.5 billion.

The special withdrawals were first introduced in 2020 by the Perikatan Nasional (PN) government led by Prime Minister Tan Sri Muhyiddin Yassin and were continued by his successor, Datuk Seri Ismail Sabri Yaakob.

PN is insisting that the current government allow such withdrawals.

Amir also said that retirement security for Malaysians remained the EPF’s key priority and, as of now, only 36% of its near-retirement members have achieved the basic savings requirements.

The EPF’s basic saving target is set at a minimum of RM240,000 upon reaching the retirement age of 55.

Only 19% of active members have achieved the basic saving targets while only 3% reached the adequate savings target, which is RM600,000 by the age of 55.

EPF earlier announced a dividend rate of 5.35% for conventional savings for 2022, with a total payout of RM45.44 billion, and 4.75% dividend with a total payout of RM5.70 billion for 2022 for shariah savings members. – The Vibes, March 4, 2023