PRIME Minister Datuk Seri Anwar Ibrahim has revealed that 81% of Employees Provident Fund (EPF) contributors will not have sufficient savings to live above the poverty line after they retire.
He said as of December last year, only 19% EPF contributors have reached the basic savings level based on their age to enable them to have RM240,000 in savings by 55 years old.
“This directly shows that 81 percent of contributors aged 55 and below are in a serious situation where their savings will not be enough for them to retire above the poverty level,” Anwar was reported as saying in a written parliamentary reply.
Anwar was responding to a query from Gombak MP Amirudin Shari who had asked for a breakdown of EPF contributors based on their latest savings and how many of these contributors have insufficient savings for their retirement.
According to the Finance Minister, more than half (56%) of those who will be able to withdraw their EPF savings fully in a year – those who are currently 54 years old – have RM50,000 or less in their retirement fund.
“RM50,000 can only provide retirement income of about RM208 a month for a period of 20 years,” he was reported as saying.
It was previously reported that as of Dec 31, 2022 more than 51% of the 13.1 million contributors who are below 55 years of age have RM10,000 and below in their EPF accounts.
Of this amount, 26% are 40 years old and above, i.e., those who can withdraw their retirement savings within the next 15 years.
“For this group, their EPF savings will only give them a retirement income of less than RM42 a month over a period of 20 years,” Anwar said.
The Tambun MP further provided the breakdown of those who have RM10,000 and below as well as those who have more than RM10,000 in their EPF accounts based on age groups.
Last month during his tabling of Budget 2023, the prime minister announced a plan that would allow contributors who are in dire straits to take up loans from a bank with their EPF savings as collateral.
This was in response to calls by several quarters for the government to allow for another round of targeted EPF withdrawal to ease the people’s financial burden. – April 11, 2023
Main pic credit: Reuters
