EPF chief vows not to make reckless decision over Account 1 withdrawal

 

EPF has not decided on allowing contributors to withdraw funds from Account 1 and is still discussing with the Finance Ministry.

Its CEO Tunku Alizakri Alias said EPF would not mortgage the future of its members by making reckless decisions or be influenced on this issue.

He said despite facing various pressures, including from politicians who supported the withdrawal of RM10,000 from Account 1, his team would not relinquish its responsibility of making the best decision for the future of its members.

"I understand many people are angry, worried and upset because of the effects of this Covid-19 pandemic which has never happened before.

"Perhaps, I am the most hated person in Malaysia right now for making unpopular decisions.

"Let people criticise me but I will do my job to protect the future of members," he told Harian Metro.

According to Tunku Alizkari, EPF would consult all stakeholders before making a decision on the matter.

"We will look at all aspects in a holistic way by balancing the current needs of members before making rational decisions that will not only solve today's problems but also ensure the sustainability of future members," he said.

Tunku Alizakri also revealed that based on EPF statistics, a total of 43 percent or 5.38 million members under the age of 55 have savings of less than RM10,000 in Account 1.

The statistics also showed that 54 percent or 137,000 of its 245,000 members who are 54-years-old in 2020 have savings of less than RM50,000 and would live a retirement life with an income of only RM200 per month spread over a period of 20 years.

"The amount of RM200 is far below the country's poverty level of RM2,208 for one household and also RM2,450 for the basic expenses of a senior citizen as stated in a survey by the Centre for Social Welfare Research (SWRC)," he added.

Tunku Alizkari noted that low base salary is the cause for many contributors having little savings in Account 1.

"Previously, many contributors had low base salaries where the rest was in the form of allowances. However, this has now improved following the implementation of minimum wage," he added.

The proposal to allow the withdrawal of savings from Account 1 has met with a mixed reaction, with some experts saying it is not a viable solution to help cash-strapped individuals manage their economic hardship while others have questioned the wisdom of saving money for a rainy day when economic hardship is unfolding now.

In presenting Budget 2021 last Friday, Finance Minister Tengku Zafrul Tengku Abdul Aziz announced that contributors would be allowed to make withdrawals of RM500 per month from their Account 1, and that this can be done for up to 12 months or RM6,000 in total beginning in January.

He also recently called on Tunku Alizakri to be "flexible" on the matter. - Mkini