An economist has warned that if the federal government allows further EPF withdrawals, Malaysia will end up with a post-retirement crisis. – Shahrill Basri/theSun
PETALING JAYA: NGOs and political parties should stop exploiting the Employees Provident Fund (EPF) for mileage, as having a healthy pension fund is in the long-term interests of its contributors, said Universiti Putra Malaysia political science professor Datuk Dr Jayum Jawan.
“While EPF contributors are legally entitled to withdraw their money after the age of 55 (for Account 1) and 50 (for Account 2), the pension fund should not be exploited for political purposes.
“Doing this is morally and ethically wrong, even though such conduct may not be illegal. Arguing for or against a withdrawal is fine, but politicians should stop harping on just about anything that can give them some leverage and cheap publicity in the media,” he said.
Last Friday, Deputy Finance Minister Datuk Seri Ahmad Maslan said the median savings in the EPF accounts of all Malaysians declined 50% to RM8,100 in 2022 from RM16,600 in 2019.
“More than RM145 billion was withdrawn by 8.1 million individuals during the pandemic under four special withdrawal schemes. The Malays, who number more than seven million members, had (an average of) RM16,900 in April 2020. Now, they are only left with RM5,500. This is one of the reasons the government has decided not to allow any more special withdrawals,” he said.
Ahmad’s statement came after former prime minister and Perikatan Nasional (PN) chairman Tan Sri Muhyiddin Yassin called on the government to consider allowing another one-off targeted EPF withdrawal for those financially affected by the pandemic.
Economist Datuk Jalilah Baba said the federal government was worried that those who continue to withdraw their EPF savings will not have a safety net for their future.
“However, consideration should be given to those in the lower income group. They may be allowed to withdraw only a certain percentage of their savings in EPF to lighten their burden in times of trouble, especially now that the cost of living is higher than before,” she said.
Malaysian Institute of Economic Research head of research Dr Shankaran Nambiar said the previous special withdrawals were allowed because of Covid-19 and the floods that hit Malaysia in December 2021.
“At the time, people just didn’t have the money to overcome their difficulties. However, subsequently, measures were not taken to address the problems confronting them. Due to the lack of a holistic approach, we now have another round of demands for withdrawals. Allowing another withdrawal yet again will not solve the long-term, post-retirement issues that EPF contributors will face,” he said.
Nambiar added that if the federal government allows further EPF withdrawals, Malaysia will have a post-retirement crisis.
“But if EPF withdrawal is not allowed, we will have a large number of people who are not going to be able to cope with their regular consumption patterns.
“Ideally, the government should not allow withdrawals while it is putting in place policies and strategies to allow access to credit,” he said.
On Monday, PN continued its call on the government to allow Malaysians to withdraw funds from their EPF savings, with Arau MP Datuk Seri Shahidan Kassim attempting to move an emergency motion, urging the Dewan Rakyat to debate the issue.
Yesterday, former prime minister Datuk Seri Ismail Sabri Yaakob said a comprehensive study must be carried out to allow another round of targeted EPF withdrawals for those in need.
“A detailed study needs to be carried out immediately so those who qualify will be allowed to withdraw their EPF savings with set conditions.
“Although we all know that EPF savings are for our retirement, would it mean much if some retire as bankrupts?” he said during the debate on the motion of thanks on the royal address.