PETALING JAYA: Efforts to transition EPF into a more pension-like approach as a retirement fund will take some time as it requires “a generational change”, said the statutory body.
But EPF maintained that such an approach was necessary to provide contributors with a more stable income after they retire, and with the average life expectancy in Malaysia now about 75 years.
This, it said, was why it was encouraging members to voluntarily transition into regular monthly payouts instead of lump-sum withdrawals.
“In 2022, more than 7,000 members voluntarily adopted monthly payouts.
“The process of formalising the proposed monthly withdrawal mechanism is still being studied and will take into account the ability and readiness of members to make such a transition.
“The monthly drawdown, where a portion of the member’s savings, up to a certain limit, will be converted into a monthly income and the remaining portion can be withdrawn lump-sum, is needed to prevent old-age poverty and for consumption smoothing during retirement.
“EPF is taking a pragmatic and practical approach to the proposed policy enhancement, balancing the needs of current members against the desirability of sustaining members’ savings after retirement,” it said in a statement.
Earlier today, Prime Minister Anwar Ibrahim said the government is finalising the details of the proposal to make it mandatory for retirees to make monthly EPF withdrawals when they reach the age of 55.
Anwar, who is also finance minister, said Putrajaya had no objections to the proposal but it would depend on EPF’s capacity. However, he acknowledged that there was “some opposition” from contributors with small savings. - FMT
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