January 15, 2022

Minister of Finance: EPF is not a solution to the challenges, retirement savings are important | Malaysia

The logo of the Employee Provident Fund (EPF) can be seen at its headquarters in Kuala Lumpur on September 5, 2019. – Reuters pic

KUALA LUMPUR, January 2 – The Employee Provident Fund (EPF) should not be seen as a solution or a way to overcome challenges as it will affect contributors’ retirement savings, especially when Malaysia is expected to achieve status an aging nation by 2030, said Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz.

“This means that in eight years, retirees or the elderly will represent 15%, or 5.3 million people, of the population, and eight years is not long.

“They are going to need more savings to support themselves after retirement,” he said in a Facebook post today.

Tengku Zafrul said this in response to some circles urging the government to allow a one-time i-Citra withdrawal of RM 10,000 for contributors affected by the flooding in the country.

The Minister of Finance stressed that EPF savings are intended to help contributors when they are retired, and noted that the government has put in place various initiatives to help victims of floods and Covid-19.

So far, thanks to the i-Lestari, i-Sinar and i-Citra programs, each EPF member is allowed to withdraw up to RM 71,000, with withdrawals totaling RM 101 billion.

Apart from this, the government has also provided various financial aid initiatives to help the population, such as RM 10 billion Bantuan Prihatin Rakyat (BPR) to help low income groups of B40 and M40, Covid-19 Special Aid (BKC) and Aid for Loss of Income (BKP) which benefited 11 million beneficiaries.

“If we continue to allow withdrawals every time a disaster strikes, the goal of retirement savings will never be achieved,” he added. “In formulating policy, the government must be responsible and think long term, including the well-being of our grandchildren.”

He said that the issue of insufficient savings is at an alarming stage and noted that the median savings of B40 is RM1,000, and if this level continues until they retire, they would have RM4 per months to spend for twenty years, while for the M40 their savings of 25,000 RM translates to 104 RM to spend per month for the same period.

Meanwhile, Tengku Zafrul said the government has distributed and extended financial assistance up to RM1,000 to flood victims, in addition to other forms of assistance, such as helping them buy electronic items and a cash rebate. 50% on auto parts. – Bernama

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