71 pct of active EPF members do not have enough to retire

PARLIAMENT | Seventy-one percent of active Employees Provident Fund (EPF) contributors who are 55 and below do not have enough money to retire above the poverty line.

Prime Minister Anwar Ibrahim said this followed four rounds of withdrawals from EPF due to the Covid-19 pandemic.

Anwar, who is also finance minister, told the Dewan Rakyat that the number of active members who have achieved the basic savings level (RM240,000 by age 55) has reduced to 29 percent in 2022, down from 36 percent in 2020.

"This situation showed that 71 percent, or more than two-thirds of active contributors 55 years and below, are in a serious situation where their savings are insufficient for retirement above the poverty line.

"EPF estimates that members need to work an additional four to six years to rebuild their savings withdrawn during the pandemic," he said.

Anwar said that as of Dec 31, 2022, there were 6.7 million contributors - 51 percent of the total - who had less than RM10,000 in EPF savings.

He was responding to a question from Amirudin Shari (Harapan-Gombak) who asked the government to state its position on early EPF withdrawals and government plans to help contributors rebuild their savings.

Anwar said that any additional unscheduled withdrawals would cause more problems for contributors, whose savings were already at worrying levels.

He said further withdrawals would also affect EPF's bottom line because it would need to liquidate assets. The four special EPF withdrawals since 2020, said Anwar, saw RM145 billion being withdrawn.

"(Further withdrawals) will limit (EPF's) participation in new investment opportunities which will lead to a loss of potential long-term returns.

"This will affect the chances of generating income for dividend payments to contributors in the future," he said.

Encouraging response

To a question from Hajah Salamiah Mohd Nor (PN-Temerloh), Anwar said EPF's Voluntary Contribution Payment scheme, introduced in July 2022, has received an encouraging response.

As of Jan 31, there were 315,702 members who participated in the scheme by contributing RM527.7 million.

He also encouraged the self-employed, those without fixed income, or those outside the workforce to participate in the i-Saraan scheme, which the government will match by 15 percent or up to RM250 per annum.

Both the Voluntary Contribution Payment and i-Saraan schemes are capped at RM60,000 per annum.

He said that EPF members could also supplement the EPF accounts of their spouses, parents, or children by up to RM60,000 per annum.

For heads of households or spouses who are in the eKasih database, they can participate in the i-Suri scheme where the government will provide incentives of up to RM480 per annum. - Mkini