KUALA LUMPUR, March 3 ― The Ministry of Finance (MoF) today said the three special withdrawals from the Employees’ Provident Fund (EPF), namely i-Lestari, i-Sinar and i-Citra have benefitted 7.34 million members or 58 per cent of 12.6 million members under 55 years old.
In a written reply in the Dewan Rakyat today, the ministry said the total withdrawals amounted to RM101 billion.
The MoF stressed that the implication of these special withdrawals particularly from Account 1 had caused a long-term effect that is a significant drop in retirement savings of the members involved.
“Out of the total members under the age of 55, as at December 31, 2021, some 6.1 million members or 48 per cent have savings balance of less than RM10,000 in their EPF accounts after the majority of members withdrew their savings through i-Lestari, i-Sinar and i-Citra.
“The RM10,000 balance shows that members are expected to have retirement income of less than RM42 a month for 20 years,” it said.
Additionally, due to the special withdrawals, the percentage of members with basic savings (RM240,000 at 55 years) fell sharply from 36 per cent in 2020 to 30 per cent at end-2021.
This situation indirectly indicates that 70 per cent or two-thirds of members aged 55 and below are in a precarious position whereby their funds are insufficient to retire above the poverty level.
“EPF estimates that members need to work for an additional four to six years to rebuild their savings which were withdrawn during the pandemic.
“Hence, any additional withdrawals under i-Citra or new special withdrawals would exacerbate the issue of insufficient retirement savings which is now at worrying levels,” said the ministry.
Based on EPF statistics, the contributions for 2021 increased 2.6 per cent or RM71.8 billion compared with RM70 billion in 2020.
The data indirectly showed that the reopening of the economy whereby businesses can operate fully has enabled workers to return to work and generate income to sustain their livelihoods.
Following this, the ministry said various parties such as workers’ unions had stated that any more withdrawals would jeopardise members’ savings for old age, add to the government’s financial burden in the future and contradict the objective of the EPF’s establishment. ― Bernama