KUALA LUMPUR, Apr 17 — The soon-to-be-introduced Employees’ Provident Fund (EPF) Account 3 structure policy is a step backward for social protection in the country, Social Protection Contributors Advisory Association Malaysia (SPCAAM) has said.

Its international labour adviser Callistus Antony D’Angelus said the move to allow Account 3 which funds can be withdrawn at any time is a reflection of the unity government falling short of reform which benefits the public.

“This is no different from the irresponsible actions of a previous administration that allowed for EPF withdrawals during the Covid-19 pandemic to alleviate the cost of living crisis at that point in time.

“The action of the EPF here is not only irresponsible towards contributors but also towards the economy more generally,” D’Angelus said in a statement here.


He further questioned the fate of individuals who would later retire and have inadequate savings to tide themselves over during their retirement.

“The burden will ultimately fall on the state in many ways, shapes and forms. The EPF should consider the socio-economic implications of such a policy decision,” he added.

The government had reportedly said to be introducing Account 3 and contribution will begin as early as May onwards.


The new flexible account will start with a zero balance and compromise 10 per cent of future monthly contributions.

With the new restructured system, Account 1 will receive 75 per cent of the monthly contribution while Account 2 will get 15 per cent.

At the moment, the monthly EPF contributions are split at 70 per cent to Account 1 and 30 per cent to Account 2.

D’Angelus suggested that the government look towards the sufficiency of the minimum wage, currently at RM1,500 per month, which he said is clearly inadequate.

“The minimum wage should be at the level of a living wage, which according to the estimates of Bank Negara for an individual living in Kuala Lumpur in 2016 was RM2,700 per month.

“We can only speculate as to why Bank Negara has not updated the living wage estimates since then. Clearly, the central bank is not functioning independently and above party politics,” he said.

He also warned against the widening of the wealth and income divide as a consequence of policy decisions such as that made by the EPF.

“The Minister of Human Resources should come out to take a stand on the social protection mechanisms in place, and the adequacy of such mechanisms.

“Clearly the Malaysian people, and in particular the B40 and M40 communities, continue to be disregarded and discriminated against. It will all eventually count at the ballot box,” he said.