KUALA LUMPUR – About 3.1 million Employees’ Provident Fund (EPF) contributors who made withdrawals through the four schemes have yet to rebuild their retirement savings.
EPF said 39% of the 8.1 million contributors who opted for the withdrawal schemes now only have an average saving of RM890, reported Utusan Malaysia.
Of the 8.1 million contributors, 0.3 million or 4% are aged 55 and above, which qualifies them to make full withdrawals of their EPF funds.
Meanwhile, 4.6 million contributors or 59% have started to rebuild their savings with net savings growth amounting to RM26.1 billion in eight months after making withdrawals.
However, the percentage of EPF members who will reach a basic savings of RM240,000 by the age of 55 has dropped sharply – from 36% in 2020 to 29% at the end of 2022.
To this, Universiti Keusahawanan Koperasi Malaysia Assoc Prof Abu Sofian Yaacob said many EPF contributors are struggling to replenish their funds a year after opting for the latest withdrawal scheme.
He added that it will not be practical to allow for a fifth withdrawal scheme, especially for those who have very little in their current EPF accounts.
Yesterday, it was reported that EPF did not agree with insistence from certain quarters to have a fifth withdrawal scheme.
Its chief strategy officer Nurhisham Hussein said only withdrawals from the first three schemes – i-Lestari, i-Sinar dan i-Citra – were genuinely for purchasing essential goods and paying outstanding loans.
He added that the fourth scheme introduced during Hari Raya Aidilfitri last year, which amounted to more than RM40 billion was not to pay for essential items but to invest in gold, among others.
The issue of a fifth scheme has been used as political fodder, but the government remains firm on not allowing any more withdrawals.
Instead, Prime Minister Datuk Seri Anwar Ibrahim tabled in Budget 2023 that EPF contributors with savings below RM10,000 in their Account 1 are to be given a one-off RM500 injection by the government.
This benefited close to two million contributors as it is limited to those aged between 40 and 54.
In addition, the government has allowed EPF members to take bank loans by using their savings as support.
The eligibility amount for personal financing is based on the savings amount in Account 2, with a minimum financing amount of RM3,000 and a maximum of RM50,000.
Applications are open for one year, allowing its members ample time to apply in advance for the Age 50 or Age 55 Conditional Withdrawal. – The Vibes, May 19, 2023
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