KUALA LUMPUR, Nov 10 — Former prime minister Datuk Seri Najib Razak today said that the Employees Provident Fund (EPF) can recover the funds withdrawn by its contributors within “a year or two”, and listed three steps as to how this can be done.

He also took a swipe at the then Pakatan Harapan (PH) government for abolishing the Good and Services Tax (GST) implemented during his time, lamenting that the collection would have aided the government at a time when funds are gravely needed.

“The money withdrawn from the accounts of the contributors can be replenished by the government in ‘a year or two’ in the future, after the Covid-19 crisis passes.

“No one said that the funds withdrawn now cannot be replenished in future. The responsibility of the government is not to deny contributors from accessing funds which are theirs, at a time they are most desperate,” he said.

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Najib added that the government must instead seek out ways to enable the contributors to increase savings in their EPF, “at the fastest rate”.

EHe said that EPF’s combined assets were valued at RM940 billion.

“If four million contributors withdraw the maximum amount of RM10,000, this would lead to liquidation of cash as much as RM40 billion. I trust that not all are going to take out the maximum amount. Maybe just what is needed, which would be around RM20 billion or RM30 billion. I believe this amount can be readied by the EPF and on top of that, Bank Negara Malaysia (BNM) can buy government bonds owned by EPF,” Najib explained.

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He said that 49 per cent of EPF’s assets were in the form of government bonds, and BNM could also help with a bond disposal without impacting the local bond market.

Najib said the government could help the EPF by granting it more lucrative projects.

He also proposed increasing EPF contribution rates for both employers and employees, once the Covid-19 pandemic was over

“Thirdly, change the structure of the dividend payment to multi-tiered dividend structure where those with lower savings will get higher dividends, so that the distribution of EPF’s profit will side more with contributors with low savings,”  the BN Backbenchers Club chairman  added.

Last week, Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said the government would allow a monthly withdrawal of RM500 from Account 1 of the EPF by assist those who have lost their jobs due to the Covid-19 pandemic.

In his Budget 2021 speech, Tengku Zafrul said the allowance to withdraw up to RM6,000 over a period of 12 months was aimed at alleviating financial hardship faced amongst its 600,000 members.

Account 1 consists of 70 per cent of workers’ contribution and is specifically meant for their retirement.

Tengku Zafrul’s latest announcement is in addition to an earlier announcement made in March where contributors can withdraw up to RM500 monthly for a period of 12 months from their Account 2 through EPF’s i-Lestari withdrawal facility.

The initiative, introduced in April, was meant to ease the financial burden of EPF members and help them meet their basic monthly financial needs during the Covid-19 pandemic.

“Taking into account both i-Lestari and this Account 1 withdrawal facility, the total allowed withdrawal will be up to RM12,000,” Tengku Zafrul added.

In addition, he also said EPF will allow members to withdraw from their Account 2 to purchase insurance and takaful products which are approved by EPF relating to life and critical illnesses coverage for themselves and their families.

Umno members including Najib have instead pushed for the government to allow EPF contributors to make a one-off withdrawal of RM10,000 from the EPF Account 1, to help weather the hard times.

They also demanded for the blanket bank loan repayment moratorium to be extended.