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NOVEMBER 2 — As a kid, my mother always advised me against making decisions when I am angry. Decisions made in an emotion-driven state of mind often bring about awful results, be it starting wars or a pointless quarrel with a loved one.
This is why we must exercise restraint and caution over the calls to allow Employees Provident Fund (EPF) depositors to withdraw savings from their Account I. While I can understand where the depositors are coming from, their requests, however, are often driven by a knee-jerk reaction.
First of all, I understand many EPF depositors now are going through tough times due to the Covid-19 pandemic, especially for the B40 and M40 groups. Many have lost jobs, had their salaries slashed or face the prospects of either, with the pandemic showing no signs of abating until a vaccine is found.
There is a sense of desperation and despair among those who find difficulties making ends meet, as the moratorium on bank loans came to an end while savings in banks fast depleting, if it has not already.
There is also anger all around — anger at the state of the economy, anger being holed up at home, anger that Covid-19 cases are shooting up just as we were making headway, just to cite a few examples. And when anger mounts, we tend to throw caution to the wind.
In the throes of desperation, many see their EFP savings as their only lifeline to tide them over during these trying times. “It's my money anyway and it's better for me to survive the present than to worry about my future” is a common line of thinking.
Alas, this is a flawed argument that goes against the grain of financial prudence and discipline, no matter what the circumstances are. EPF savings is for depositors' old age.
Even before the pandemic, experts had already projected that most Malaysians would not have enough savings in their EPF to get through their golden years. Removing this financial safety net reeks of economic recklessness and is nothing more than a populist move to score brownie points.
The pandemic will be over eventually and as “normalcy” returns, the 15 million-odd EPF depositors may face the spectre of insufficient retirement funds, if Account I withdrawal is allowed.
With an ageing population, a healthcare crisis cannot be ruled out if current depositors do not have enough savings post-retirement. Public hospitals could be overrun while the labour market in disarray as the elderly cling on to jobs, knowing that their retirement savings would dry up soon.
More than ever, there has to be financial discipline. Just as a general at war needs to be level-headed to map up battle strategies and not get distracted by exploding mortars or groans of men dying in combat, our policy-makers need to be steadfast and rationale in mapping out the road ahead, post-Covid-19.
The last thing we want is to pander to emotionally-charged sentiments that are not grounded on sound socio-economic principles. Because at the end of the day, the pandemic will end. And there is no point in winning the Covid-19 battle but losing the war with the reckless decision to allow EPF Account I withdrawal.
* This is the personal opinion of the writer(s) or organisation(s) and does not necessarily represent the views of Malay Mail.