Starting Sunday, Employees Provident Fund (EPF) contributors could transfer their savings from the Akaun Sejahtera to a third account, known as the Flexible Account.
The Flexible Account is an initiative to restructure EPF accounts, effective from May 11, aimed at improving retirement income security while also meeting the life cycle needs of contributors.
Through the Flexible Account, contributors could withdraw up to RM250 per day directly, a significant amount of cash that can be a lifesaver for those facing financial problems.
Although the Flexible Account provided a "lifeline" to contributors who were desperately in need of extra funds, it can also be like "poison" for those who could not resist the temptation of having extra money in front of them.
If contributors were not disciplined, no benefit could be gained from this convenience provided.
It is important to remember that the Flexible Account or also known as Account 3 was created to meet basic needs and for those facing emergencies.
This restructuring can help the community deal with the cost of living issues while still struggling with low wages or salaries.
For instance, if you face vehicle damage at the end of the month and did not have emergency savings, the money from this Flexible Account can save your day before payday.
However, the concern was that withdrawals might be made solely for non-essential spending, such as buying gadgets, decorating the house, upgrading car accessories, or excessive fashion purchases.
Without any acceptable reason, you might withdraw RM250 a day until reaching the minimum balance, just to buy an iPhone 15 Pro Max.
In such cases, the Flexible Account will not serve its true purpose, even though the money was yours.
Therefore, contributors needed to ensure they remained disciplined and set a rule that the money should only be withdrawn if truly needed.
You will never know when you might face hardship in the future, but if it happened, the money from the Flexible Account could help you to some extent.