EPF Account 1 withdrawal proposal receives mixed reactions

 

The government's proposal to allow more Employees Provident Fund (EPF) contributors to withdraw from their Account 1 has received mixed reactions, with some outright rejecting the proposal.

The government initially planned to allow the withdrawal of RM500 a month of up to RM6,000 over a year which would benefit 600,000 eligible contributors.

Several figures told Malaysiakini that while they agreed with the move to allow more contributors to withdraw from Account 1, they expect more from the EPF to help those in dire need due to Covid-19.

Kapar MP Abdullah Sani Abdul Hamid opined that there shouldn't be a restriction to the number of those eligible for the withdrawal scheme due to the "disastrous" situation the people are facing.

"We are in a time of a disaster. During this time, everybody needs money. They carry a financial burden, they have their salaries cut or lost their jobs.

"The problem is, why is the EPF withholding the contributors' money? It's not the government's money.

"If there are seven million contributors, all of them should be eligible to withdraw money," he said.

For the record, certain parties, for instance, Umno, have been pushing the government to allow a one-off withdrawal of RM10,000 from Account 1 instead.

BN backbenchers chief Najib Abdul Razak said BN's support for Budget 2021 is conditional as it maintains its demand for the RM10,000 one-off withdrawal, as well as extending the Covid-19 loan moratorium for six months.

Umno supreme council member Armand Azha Abu Hanifah continued to push for the one-off withdrawal following a report yesterday that the government was in talks with EPF to allow more contributors to withdraw from Account 1.

"I welcome the move but I personally think it's a good idea for the government to make a leeway of allowing the withdrawal of RM10,000 to help people affected by Covid-19," he said.

Many contributors have little savings in EPF

Meanwhile, the Malaysian Trades Union Congress (MTUC) supported the government's move but expressed concerns about the reality concerning the income of EPF contributors.

To date, the EPF has 14.6 million active contributors.

"Around 32 percent of contributors have less than RM5,000 in their Account 1.

"About 2.2 million have less or no savings in their Account 2," said MTUC president Abdul Halim Mansor (above).

He said that while there are billions of ringgit in the EPF, the money is mostly from those who have worked for more than 10 years.

For those who have worked less than 10 years, "this group doesn't have enough savings in their EPF at this time," he said.

EPF withdrawal will not solve people's real problems

According to Party Sosialis Malaysia (PSM), the government's EPF withdrawal proposal will not effectively solve the people's problem.

"The EPF allowing RM500 withdrawal a month is using the contributors' own money which will, in turn, affect their savings in the future," said PSM deputy chairperson S Arutchelvan (below).

Instead, he insisted on PSM's idea of a modified universal basic income (UBI) where those who lost their job would get RM1,000 a month for a year.

"Based on our calculation, the government needs RM22 billion to help an estimated two million people in need. Each will get RM1,000 a month for a year.

"That's more practical. We have to resolve the problem of the people who don't have money. If you have a job and a salary, you are not eligible for UBI," he said.

Arutchelvan said the original idea of the EPF was to "force" people to save for their retirement, but that idea would now be defeated if the people are allowed to withdraw their EPF savings.

Similarly, Bangi MP Ong Kian Ming also outright rejected the idea of withdrawing money from Account 1 of the EPF.

"Rather than focusing on EPF Account 1 withdrawals, the government should explore other more effective ways to help the B40 and M40 who need extra cash to pay their loans and to fund their businesses.

"These would include the extension of the loan moratorium, more cash grants for SMEs, and loans at more attractive interest rates with short processing times," he said.

When contacted, an EPF corporate communication officer said they will announce the details on the Account 1 withdrawal on Nov 18. - Mkini