AMID an escalation in cost of living fuelled by unabated inflationary pressure, it pains the heart to learn that 6.62 million or 52% of the 12.78 million Employees Provident Fund (EPF) members under the age of 55 have savings less than RM10,000 in their accounts as of end-June this year.
What is even more disturbing is that from the 6.62 million members, 4.99 million or 75% of the members are Bumiputeras.
At the same time, the retirement fund also revealed that 3.2 million of EPF members under the age 55 are having critical savings level of below RM1,000, of which 2.58 million or 81% are made up of Bumiputeras.
“As a relative comparison, Bumiputera members make up 64% or 8.22 million of the total 12.78 million members of the retirement fund aged below 55,” Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said in a reply to Senator Datuk Razali Idris during a question and answer session at the Dewan Negara today.
“This shows that Bumiputeras made up a large proportion of EPF members with low EPF savings level compared to other races.”
Razali had asked the Finance Minister to state measures to ‘rescue’ EPF members with savings level below RM10,000 as well as those who have savings less than RM1,000 of whom majority are made up of Bumputeras.
Earlier, Tengku Zafrul explained that the low and alarming savings level among EPF members stemmed from the implementation of four COVID-related withdrawal facilities, namely i-Lestari, i-Sinar and i-Citra and the Special Withdrawal schemes as well as a reduction of the employees’ share of their monthly contribution which had together depleted the pension fund by RM155 bil (RM145 bil from the four withdrawal programmes).
As a counter measure to help members restore their retirement savings, EPF has set up several contribution channels for the members.
“For members who are working for an employer, they can choose to contribute higher than the 11% contribution rate any time. Additionally, they can contribute to their savings any time subject to a maximum annual amount of RM60,000,” noted Tengku Zafrul.
“Likewise, self-employed members or those who do not have fixed income or even unemployed individuals like students and housewives aged under 60 can choose to make voluntary contributions anytime under the i-Saraan programme subject to a maximum of RM60,000 per annum.”
As an incentive to encourage this group of individuals to save under i-Saraan, the Government is chipping in a 15% contribution to their total deposit or up to RM60,000 per annum. – Aug 8, 2022
