CAN the 5.3 million Employees Provident Fund (EPF) contributors who have never withdrawn their savings through any withdrawal scheme to date humbly request for a special dividend rate next year as a reward for their astute financial discipline?
In light of Prime Minister Datuk Seri Ismail Sabri Yaakob just sanctioning a RM10,000 one-off withdrawal to enable potentially 6.3 million eligible members withdraw in excess of RM63 bil, such a call is justified to compensate ‘obedient’ members who have their savings stuck through thin and thick with the pension scheme.
Thanks to Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz’s recent revelation, it has become public knowledge that EPF could have doled out a 6.7% dividend or 0.6% higher than the 6.1% it has declared for 2021 if there were no outflow of funds throughout that financial year from special withdrawal programmes that were intended to tide over deserving members in this current challenging environment.
While Ismail Sabri has finally succumbed to the lobby by UMNO lawmakers who are seemingly in favour of such withdrawal, the fact remained that EPF members were previously been given access to withdraw up to RM71,000 each via three schemes, namely i-Lestari, i-Sinar and i-Citra which came up to RM101 bil.
Not only that such schemes have impoverished 6.1 million EPF members or 48% of those age under 55 who now have balance of less than RM10,000 in their accounts, members who have never withdrawn a single sen of their retirement savings will have to face the prospect of lower dividend pay-outs in 2023 and beyond.
“If a (further) one-off withdrawal of RM10,000 is allowed, the number of eligible members who would make withdrawals is expected to reach 6.3 million involving additional withdrawals amounting to more than RM63 bil,” contended Tengku Zafrul in his winding up debate on the motion of thanks to the Royal Address for the Finance Ministry in the Dewan Rakyat on Monday (March 14).
“If the additional withdrawals were allowed, then EPF will have to carry out portfolio balancing, and the impact may be more than the withdrawal value of RM63 bil.”
This is not surprising considering the EPF will need to sell more overseas investment assets in volatile market conditions, especially with the ongoing Russia-Ukraine crisis halting domestic investment for the short and medium term for three to six months.
Even if those who did not make any withdrawal thus far can gladly accept the lower 6.1% rate as a form of national service for their less fortunate compatriots, they may never be able to accept the fact that the core problem is rooted to the inefficiency of the Government machinery in the first place.
Instead of having a bloated Cabinet yet remaining incoherent in formulating and implementing policies despite its vast size, the Treasury could have spearheaded efforts to plug diverse financial leakages and utilise savings derived from such exercise to roll out financial aid to households which were badly impacted by the adverse effect of lockdowns or loss of employment.
With a big proportion of EPF members now having a grossly depleted savings in their accounts, one wonders what measures the powers that be has in place to tide them over in their old age. – March 16, 2022
