MARCH 21 — Last week’s announcement by Prime Minister Datuk Seri Ismail Sabri Yaakob that Malaysians will be allowed a special withdrawal from their Employees Provident Fund (EPF) up to a maximum of RM10,000 has met with the expected litany of caution.
The EPF itself has issued a statement voicing its concern about retirement adequacy as this initiative is the fourth withdrawal allowed since the pandemic began.
The EPF also noted that up to 40 per cent of members have less than RM10,000 in their accounts. Logically this means that this fourth and final withdrawal, should it be utilised by this same group, will effectively zeroise their accounts plunging thousands (if not millions) of workers into a dark future of old-age financial uncertainty and poverty.
Tragically, this will be a reality.
Given two years of lockdowns and restrictions, there are numerous Malaysians hanging on by a thread. These folks are going to be the last people concerned with "retirement savings"; all they want is hope for the next month or so.
In the middle of last year, I spoke to handicapped person who was staying alone in his apartment, jobless (because his employer started letting people go once the lockdowns hit), flat-broke, rent unpaid, next of kin gone and it appears that his day to day boiled down to one task: Browse social media and try to find free food.
I transferred some cash to him and wished him the best. I haven’t followed up with him since but I reckon things haven’t been easy.
I hope he’s managed to find some work. If not, then these EPF emergency withdrawals are almost the only thing left. For people like him, the EPF is akin to the last cow on the farm.
Killing it for meat is absolutely tragic but when people are starving and desperate it may appear that not doing so when the option arises —especially if one has a family — may be irresponsible in the short-term even if it merely delays disaster in the long-term.
Stories like these abound. One can only pray that our government takes drastic steps to boost job creation, especially now that the pandemic is turning endemic.
One also hopes that we’ll have fewer voices calling for restrictions and (God forbid) further lockdowns as the "solution" to rising positive cases. Surely I’m not the only one who finds it sad — if not a tad bit "privileged" — to see people who are least affected financially by the pandemic arguing for slower easing of restrictions, slower reopening of borders, etc. (Okay I’ll stop ranting now).
This is why I cannot welcome April 1st fast enough, because therein lies a glimmer of hope from this latest round of EPF withdrawals.
Maybe there will be quite a high number of people not from the 48 per cent who will take out that money to spend on a local vacation or buy some new furniture or, well, do something to help our employment numbers.
We’re in a save-the-starfish-on-the-beach scenario and every jobless Malaysian who manages to get a job as a result of more tourists visiting his/her area or just more consumers spending money is an occasion to celebrate.
These second group of folks will be those who easily hold hundreds of thousands of "untouchable" funds in the EPF yet have very little liquidity to splash.
For them, RM10,000 would be somewhat a drop in the entire pond of three accounts but which would be very helpful in giving themselves and their families a treat.
Finally, I’m aware of a third category of people who wouldn’t mind this latest round of withdrawals. If the first category are the desperate and the second are those who haven’t experienced some luxury in a while, the last group of folks are those who simply don’t trust the government and want as much of their cash out of EPF as fast as possible (I’m willing to bet, therefore, that unit trust funds which allow us to use money from the EPF have been making a killing recently).
While there could be some overlap between the third and second group, the former would consist of those who are more investment-savvy who can put their monies into sectors which boost nation-building (even if only a bit).
Whatever the case, come April it’s almost guaranteed there’ll be a huge outflow from the EPF. We can only hope and pray that the first group of withdrawers will find a long-term solution and safety-net, the second will spend locally (!) and the third will channel their investments to financial players who can make a huge difference.
*This is the personal opinion of the columnist.