Is Epf Account 3 A Sustainable Solution To Alleviate The Rakyat S Burden

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DESPITE the pandemic easing and Malaysians returning to their regular routines, many are grappling with the lingering effects of inflation.
The prices of essential items, particularly food and daily necessities, continue to soar, causing financial strain for many Malaysians.
Even with a substantial 35% increase in salary over the past year, some of my acquaintances still find it challenging to keep up with the escalating costs.
Presently, the average expense for a meal ranges from RM12 to RM15, while popular beverages like Milo, teh tarik, or soft drinks cost between RM3 to RM4.
When we calculate the daily and monthly expenses for food and drinks (three meals a day), it amounts to RM57 per day and approximately RM1,710 per month (based on a 30-day period).
Moreover, when factoring in other financial commitments such as car and housing loan instalments (averaging at RM1,000 and RM2,000 per month, respectively), the total monthly expenditure could easily surpass RM4,700.
EMIR Research recently stated in an article titled “Addressing the escalating crisis of youth violence in Malaysia” that 47% of 25 to 34 years old Malaysians were underemployed in 2022.
This indicates that despite these group of young Malaysians have completed bachelor or postgraduate degree, they had to take low-paying jobs for survival.
Another think tank, Khazanah Research Institute indicated in its recent report that in 2021, 65% of graduates started under RM2,000, with only 10% earning above RM3,000.
This means that the amount of salary received during 1990s (i.e., RM1,800 per month) is still relatively similar to the 21st century (i.e., RM2,300, which only increased by 27.8%).
No doubt that the Employees Provident Fund (EPF) Account 3 offers an option for some Malaysians struggling to make ends meet to withdraw funds for emergency use. But still, will that be a viable solution in the long term?
From May 11 until August 31, EPF members could choose to transfer funds from Account 2 to Account 3.
The EPF contributions will be separated into three accounts: 75% going into Account 1 (Akaun Persaraan); 15% into Account 2 (Akaun Sejahtera) and 10% into Account 3 (Akaun Fleksibel).
For those with more than RM3,000 in their Account 2, a third of their balance savings (i.e., RM1,000) will be transferred to the Account 3 while one-sixth (i.e., RM500) will be transferred to Account 1. The remaining balance (i.e., RM1,500) will be retained in Account 2.
While the current unity government acknowledges the need to address the cost of living crisis, concerns linger about the effectiveness of such measures in improving living standards.
Rather than relying solely on EPF withdrawals, alternative solutions like a productivity-linked wage system could offer sustainable relief by providing higher-paying jobs for ordinary Malaysians.
The adoption of such measures could prevent individuals from resorting to multiple jobs to cope with rising expenses. I’ve heard numerous stories of Malaysians juggling four to five jobs, including one full-time position, just to make ends meet for themselves and their families.
In addition to implementing a productivity-linked wage system, the current unity government must also explore strategies to boost local food production.
Malaysia’s heavy reliance on imported food supplies has contributed to soaring food prices. By restructuring the existing wage structure and placing greater emphasis on local agricultural production, the Malaysian government could gradually assist more Malaysians in alleviating their financial burden.
 
Amanda Yeo is a Senior Fellow at Pacific Research Centre.
The views expressed are solely of the author and do not necessarily reflect those of MMKtT.
- Focus Malaysia

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