13mp Let Epf Contributors Decide On Full Withdrawal Or Monthly Payout

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The government has been urged to allow Employees Provident Fund (EPF) contributors to choose between full withdrawal of their savings upon retirement or to receive a monthly pension payout.
This followed Putrajaya’s unveiling of its 13th Malaysia Plan (13MP) yesterday, where the government said it wants to explore a new mechanism that can ensure a more steady and continuous financial payout for EPF members.
Former BN strategic communications deputy director Eric See-To said the move should not be made compulsory as it can become a heavy burden on the people.
“If workers are given the option, these are good steps as they provide more choices. But if they are made mandatory, it will be a heavy burden on the people.
ADS“Workers should be allowed to decide for themselves - whether they want to restructure their EPF savings for monthly pension payments or keep the full withdrawal option, and also whether they want to retire at age 60 or 65,” he said in a statement on X.
New mechanism
According to the 13MP main document released to the public yesterday, the government listed the new mechanism plan as part of its B2 strategy on reforming the labour market.
The 13th Malaysia Plan bookletAiming at improving workers’ welfare, it intends to split the EPF contributions into two components, namely retirement savings and retirement pension.
“Through this effort, workers can withdraw a portion of their savings while receiving a monthly pension payout after their retirement,” said the document.
EPF contributions are, at present, divided between three accounts - Retirement Account (previously known as Account 1), Well-being Account (Account 2), and a third account introduced last year called Flexible Account.
Contributors can only withdraw their savings in the first account after they reach retirement age, while the Well-being Account allows withdrawals before retirement, but limited to a number of purposes such as to pay for housing, education and health.
Let them decide retirement age
See-To urged Putrajaya to also give civil servants the option to choose whether they want to retire at 60, should it decide to increase the retirement age.
He pointed out that the government stands to gain advantages from the plans.
“EPF is the main buyer of new government debt. The more funds EPF retains, the more the government can borrow to finance national debt, which has surged since the 14th general election.
“Raising the retirement age for civil servants is actually another way to reduce the government’s pension burden.
“The first step has already been taken by abolishing the pension scheme for new civil servants, and now the next step is to raise the retirement age,” he added. - Mkini

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