For most Malaysians employed in the private sector, contributions to the EPF (Employee Provident Fund) are necessary part of working life to ensure that they will still have the financial means to sustain themselves upon their retirement.
And just last year, the government has made amendments to allow self-employed individuals to contribute to their own EPF. In any case, the funds can typically only be accessed upon one’s retirement, or for specific purposes such as the purchase of a new home.
RM145 bil has been withdrawn from EPF fund since 2020
With that said, many have been left with no choice but to dip into their EPF accounts over the past years in the wake of financial uncertainty brought on by the global Covid-19 pandemic. Consequently, the deputy finance minister has revealed that a total of RM145 billion has been withdrawn from EPF since 2020 in response to the economic constraints faced by everyday Malaysians.
Just yesterday, politician Datuk Seri Shahidan Kassim who is the MP for Arau under the Perikatan Nasional (PN) coalition has urged the current government to follow in the footsteps of former prime minister Tan Sri Muhyiddin Yassin by approving on another round of targeted EPF withdrawals for citizens.
“It’s necessary for the rakyat to withdraw funds from their EPF because they need it to survive. The new school term will start in late March and Ramadan is not far from that too”, he said.
Shahidan then mentioned that allowing the rakyat to withdraw from their EPF fund is a right according to Section 54 of the KWSP Act 199.
When questioned on how this would affect the EPF’s cash flow after another round of withdrawals, Shahidan believes that it wouldn’t be an issue as the reports issued by the retirement fund last December has indicated that there is an increase in contributors and employee contributions. However, Deputy Finance Minister, Datuk Seri Ahmad Maslan stands firm that the current government will not allow anymore withdrawals from the EPF fund.
“We’ve seen a 50% decrease in the median for EPF savings, and it’s standing at RM8,100 as compared to RM16,600 in 2019. The gaps between the T20 and M40 along with B40 are further widening and unfortunately, the B40 and M40 tiers are most affected”, he added.
Ahmad also mentioned that the savings gap between races are also widening seeing that the savings of a 55-year-old Bumiputra standing at RM4,900. Similarly, reports have shown that up to 6.7 million members or 51.5% of 13.1 million EPF members having savings of less than RM10,000.
“As of now, we stand firm on not allowing anymore withdrawals, and further announcements on the matter will be made once the 2023 budget has been finalised on February 24”, he said.
Previously back in 2022, EPF claims that an average Malaysian would need about RM1 million in savings to retire comfortably, reports The Star.
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