Bosses against RM10,000 EPF blanket approval - MEF

SHAH ALAM - Bosses are saying that the RM10,000 special withdrawal from the retirement fund should be needs-based and not a ‘blanket’ approval.

This, the Malaysian Employers Federation (MEF) said comes as Malaysia becomes an ageing population in 2030.

Its president Datuk Dr Syed Hussain Syed Husman J.P in a statement today said MEF hoped that the Employees' Provident Fund (EPF) management will incorporate and detail the special circumstances that will be considered as the basis to allow the special withdrawal.

He said MEF was concerned that the withdrawals from the savings of EPF members through i-Lestari, i-Sinar and i-Citra facilities with a total withdrawal of RM101.1 billion would expose the members to risks of falling into old-age poverty.

“Employers always hope that their employees would lead a good life upon their retirement. It is undeniable that the vast majority of employees have to depend on their EPF savings when they retire.

“Unfortunately with the constant EPF withdrawals, there will not be much to live with upon retirement. Even if they have, the spiralling cost of living will erode their purchasing power and as such not much will be left,” he said.

Syed Hussain also noted that only three per cent of Malaysians could afford to retire comfortably.

He said MEF was of the view that to address adequacy of EPF savings upon retirement, it was critical that withdrawal should only be allowed upon reaching the age of retirement at 60.

“It is critical that the current policy of allowing one third withdrawal upon 50 years and withdrawal of all EPF savings at age 55 be reviewed. Since the retirement age was raised from 55 to 60 years it is no longer relevant for EPF to allow members to withdraw the EPF savings upon reaching 55 years,” he said.

The government, he said should encourage more savings to EPF from employees as part of the retirement savings.

He added that he supported the statement by Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz urging contributors to maintain their savings unless the situation was really urgent and hoped that they would consider the matter carefully before making withdrawals, for the sake of the future.

Syed Hussain said currently about 48 per cent of EPF members below the age of 55 have critically low savings.

He said to replenish the EPF savings, members that made withdrawals from their EPF savings needed to to work for about four to six years longer just to cover the amount they withdrew over the Covid-19 period.

"There must be other forms of assistance under the concept of Keluarga Malaysia to help Malaysians overcome difficulties than utilising the savings they have," he said.

Earlier today, Prime Minister Datuk Seri Ismail Sabri Yaakob announced the government’s decision to allow EPF contributors to make a special withdrawal of RM10,000.

The decision to allow the special withdrawal was made to help ease the burden of Keluarga Malaysia members who were still impacted by the Covid-19 pandemic.