Long term effects of Account 3 withdrawals could be severe - NGO

SHAH ALAM - The Social Protection Contributors' Advisory Association Malaysia (SPCAAM) said the introduction of Employees Provident Fund (EPF) Account 3 will only benefit the business community and possibly result in more people living on the streets in their old age.

In a statement, the labour group said if half of the nation’s 16 million workers withdrew RM50 from their Account 3 every month, they would inject an extra RM400 million a month into the economy.

“An additional RM4.8 billion a year in the economy is exactly what the business community needs to show a profit even in this sluggish economy.

“Surely the sight of numerous B40 workers withdrawing a humble RM50 or RM100 from their old age savings, just to pay a medical bill for a sick child or to return to their hometown for festivities, must have filled the hearts of our business community with great joy and delight.

“It would seem like the business community has successfully lobbied the government to introduce a form of “trickle-up economics,” said SPCAAM president, J Solomon.

He cautioned that while the economy is boosted today and businesses in Malaysia will be able to show profits, the long-term repercussions could be severe.

It was reported that long queues were seen at EPF buildings nationwide when Account 3 took effect on May 11

With the restructuring of EPF accounts, the monthly contribution of members would be divided by 75 per cent, 15 per cent and 10 per cent, and channelled to Accounts 1, 2 and 3 respectively.

However, contributors are only allowed to withdraw up to RM250 per day.

According to EPF’s i-Akaun application, the minimum sum members can withdraw per day from the flexible account is RM50.