Epf To Rebuild Savings Over 6 Million Have Less Than Rm10k Left

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Employees Provident Fund (EPF) members are seeing their retirement savings depleting after the government allowed them to dip into the fund during the Covid-19 pandemic.
The EPF said after three rounds of allowing members to withdraw from their retirement fund under the i-Lestari, i-Sinar and i-Citra programmes, some 6.1 million EPF members now have less than RM10,000 in their EPF accounts.
Out of the 6.1 million, 3.6 million have less than RM1,000 in their EPF accounts.
The retirement fund said it will now work on helping members to rebuild their savings for their retirement future.
“Following the special withdrawal facilities due to the Covid-19 pandemic, the EPF is now focused on assisting members to rebuild their savings for their retirement future.
“The withdrawal facilities were exceptional in nature and were introduced considering the circumstances at the time where the pandemic severely impacted the local economy.
“Against this need to safeguard members’ future and rebuild their retirement funds, future exceptional withdrawals will need to be very carefully considered,” said the EPF in a statement today.
The EPF is required by law to provide a guaranteed dividend of at least 2.5 percent a year, but has consistently offered dividend rates well above five percent since 2009.
In their statement today, EPF said the drop in savings is particularly worrying for bumiputera members as they made up 78 percent of the withdrawal applicants.
As a result, 4.4 million bumiputera members now have less than RM10,000 and two million have less than RM1,000 in their EPF accounts.
The exceptional withdrawals have also caused the distribution of savings to become increasingly skewed, it said, with the bottom 40 percent of members – about five million members – seeing their savings drop by 38 percent to just RM8 billion.
This translates into a median savings balance of only RM1,005.
Similarly, the middle 40 percent also suffered a decline of 18 percent in their savings, leading to a median balance of RM24,995.

Inadequate funds to retire
Only the top 20 percent of members saw an increase in savings but even this only translates to a median of RM152,043 in savings, which the EPF said is equivalent to just RM633 per month for 20 years.
“The three exceptional withdrawals have left 73 percent or nearly three-quarters of members in a serious state of having inadequate funds to retire about the poverty line.
“The EPF estimates that members will need to work between an extra four to six years to rebuild the savings that have been utilised during the pandemic,” it said.
The fund said it hopes that the measures put in place to support the economy and spur employment will help towards addressing the needs of the rakyat.
The National Recovery Plan (NRP) and the vaccination programme have made improvements to the Covid-19 situation, paving the way for economic recovery, it said.
This has enabled economic sectors to be revived as Malaysians are able to go back to work, thus improving their livelihoods, it added.
The EPF also pointed to Budget 2022, which includes an RM8.2 billion allocation for Bantuan Keluarga Malaysia (BKM) and RM4.8 billion for Inisiatif Jamin Kerja Keluarga Malaysia (JaminKerja), among other measures to assist the rakyat.
Incentives such as the i-Saraan and Kasih Suri Keluarga Malaysia should also go some way towards addressing the shortcomings of the country’s social protection system for the vulnerable members of society, it said.
The social protection agenda is being overseen by the Malaysian Social Protection Council (MySPC) which is chaired by the prime minister, it added.
“The EPF is in full support of these moves, and will work closely together with the government to ensure a secure and protected future for our members and the rakyat." - Mkini

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