EPF withdrawal not the solution to challenges, says Zafrul

 

Tengku Zafrul Aziz says if the trend continues, the B40 will have to live on RM4 a month after retirement. (Bernama pic)

KUALA LUMPUR: The Employees’ Provident Fund (EPF) should not be seen as a solution or a way to overcome challenges as this will affect the retirement savings of contributors, especially when Malaysia is expected to hit aging nation status by 2030, said finance minister Tengku Zafrul Aziz.

“This means that in eight years, retirees or senior citizens will make up 15% of the population, or 5.3 million people.

“Eight years is not a long time. They are going to need higher savings to support themselves after retirement,” he said in a Facebook post today.

Tengku Zafrul said this in response to the call by some politicians for the government to allow a one-off i-Citra withdrawal of RM10,000 for contributors affected by floods.

The finance minister stressed that EPF savings were meant to help contributors when they retire, and noted that the government had provided various initiatives to help flood and Covid-19 victims.

Up to now, through the i-Lestari, i-Sinar and i-Citra programmes, each EPF member was allowed to withdraw up to RM71,000, with the withdrawals totalling RM101 billion.

Apart from that, the government has also provided various financial initiatives to help the people, such as the RM10 billion Bantuan Prihatin Rakyat (BPR) to help the B40 and M40 income groups, the Covid-19 Special Aid (BKC), and the Loss of Income Aid (BKP) which have benefitted 11 million recipients.

“If we continue to allow withdrawals whenever a disaster happens, the aim of retirement savings will never be realised,” he added. “In the formulation of policy, the government needs to be responsible and to think long term, including (taking into consideration) the well-being of our grandchildren.”

He said the issue of insufficient savings was at an alarming stage and noted that the median savings of the B40 was at RM1,000. If this level continued until their retirement, they would have RM4 a month to spend for 20 years, while for the M40, their savings of RM25,000 would translate into RM104 per month for the same period.

Tengku Zafrul said the government had distributed and expanded financial aid to RM1,000 to flood victims, in addition to other forms of help, such as helping them to buy household equipment and a 50% discount to repair damaged cars. - FMT