MCA president Datuk Seri Wee Ka Siong has raised questions about the government’s proposal to create a Flexible Account or Account 3 for the Employees Provident Fund (EPF), which allows withdrawals at any time.
“I am trying to understand the objective of introducing a third account. In the past, we have discussed putting 70% of savings into the first account. The remaining 30% will be in the second account for investments and other purposes.
“If there is a third account that will not receive dividends as the first and second account, why would the people need to do so?” he asked in a video posted on his Facebook account today.
He added that if this account is established, contributors may not receive the same dividends as a result.
Deputy Finance Minister Datuk Seri Ahmad Maslan has already explained in Parliament that Account 3 of the EPF would be accessible to all members, regardless of their income group, especially during emergencies to ease financial burdens.
Moreover, this decision was taken in the wake of massive calls from account owners to allow the withdrawal of their EPF savings because of dire economic circumstances.
The government of Prime Minister Datuk Seri Anwar Ibrahim does not agree that withdrawing EPF savings will help the account owners, arguing that it will reduce their dividends and potentially mean members will end up having no or little savings in the future.
Wee also expressed his worries that opening Account 3 could have adverse consequences for contributors and urged for careful consideration of this proposal.
Earlier, the unity government decided to allow the use of EPF savings as collateral for bank loans but once again, Wee was against the plan, saying it would only likely worsen the financial situation of the borrowers.
“This will bring more problems because the accumulated interest will be higher than the (average) fixed deposit rate of about 4%,” noted the Ayer Hitam MP. – Oct 29, 2023
Main photo credit: Malay Mail