KUALA LUMPUR, April 9 — The growing use of the Employees Provident Fund’s (EPF) Akaun Fleksibel facility for short-term financial needs could pose risks to long-term retirement adequacy, the pension fund has cautioned.
In its latest report, “Enduring Today, Shaping Tomorrow: Akaun Fleksibel as a Financial Lifeline for Wellbeing”, the EPF said while the facility has provided immediate relief to millions of members, continued reliance on withdrawals could gradually reduce retirement savings if not carefully managed.
Nearly five million members below the age of 55 have withdrawn a combined RM16.6 billion as of October 2025, reflecting sustained demand for liquidity amid ongoing cost-of-living pressures and occasional discretionary use.
Most of the withdrawals went towards daily survival spending on food and groceries, especially among lower-income groups.
The EPF noted that the facility has helped improve short-term financial wellbeing, but warned of a trade-off between present consumption and future security.
It said the shift towards more frequent and routine withdrawals suggests that savings are increasingly being used as a buffer for day-to-day expenses.
The EPF said withdrawals are strongly linked to improved short-term wellbeing, with members reporting greater financial security after accessing their funds, particularly when it helps them manage urgent expenses or stay afloat amid rising costs.
“However, this immediate relief comes with trade-offs and inevitably raises questions about longer-term savings adequacy and sustainability, particularly in the context of retirement systems designed for old-age income security,” it said.
“Policy responses should therefore focus on enhancing long-term financial resilience through stronger planning, better institutional support and a more integrated social protection system.”
It proposed empowering members with guidance tools, personalised planning and financial literacy support through the i-Akaun app, such as links to Belanjawanku for budgeting guidance and the Asian Institute of Chartered Bankers (AKPK) for debt management, alongside personalised projections on the long-term impact of withdrawals and greater awareness of existing EPF products and withdrawal facilities.
The EPF also plans to use data-driven analysis to identify emerging risks, recalibrate policies, and improve targeting of support for vulnerable households.
It highlighted that addressing cost-of-living pressures and implementing broader economic measures would be key to reducing reliance on retirement savings for immediate needs, including policies to promote wage growth.
It added that there should be stronger linkages between social protection mechanisms, including social assistance, social insurance and active labour market policies, to support vulnerable groups and address gaps in the old-age income security system to ensure a minimum income at retirement.
