THERE is much debate about whether the government should allow another round of Employees’ Provident Fund (EPF) withdrawals following I-Citra, I-Lestari, and I-Sinar, which were made possible to alleviate the hardship of contributors during the pandemic.
The question now is whether it is a good idea or whether it will be a form of negligence on the part of the government to approve another such round.
Malaysia is an ageing society, and EPF is the only lifeline for many during their golden years. However, with the recent withdrawals, the savings of many Malaysians are fast depleting. There seems to be a fragile safety net for many when they reach their twilight years.
Statistics show that 80% of contributors have less than RM50,000 in their EPF. One wonders how they will survive during their retirement years. Another round of withdrawals will impoverish many. Does the government want to risk this just for political mileage?
Prime Minister Datuk Seri Anwar Ibrahim said recently that the government was studying other ways of helping the people without resorting to the EPF, and this has to be lauded.
The one trillion EPF has been performing well since its inception and has returned a 6% dividend on average, beating the savings rate in the country.
In 2022, the global stock markets were very volatile, and it impacted the Fund, but expectations are we will see a commendable return of EPF dividends in February or March 2023.
The unity government under Anwar seems resolute to keep their hands away from the EPF kitty for now, and that’s good news for contributors.
However, there is a pressing need for the government to assist Malaysians before their retirement. The average life expectancy in Malaysia is 75, and one needs to be financially prepared for this.
The Government should look into ways to reduce or subsidise the cost of living for Malaysians as they age. Spiralling health-care costs provide little solace.
Malaysians must be financially savvy and view the EPF as a retirement fund for their golden years. It is clearly irresponsible to withdraw EPF savings to satisfy every whim and fancy. — Jan 24, 2023
Ranjit Singh is a former Corporate Monitoring Manager, MSWG.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.