MEF: Govt Should Stop EPF Withdrawal Schemes

The Malaysian Employers Federation (MEF) has argued that there was no need for another withdrawal scheme from the Employees Provident Fund (EPF) before its members reached retirement age of 60 to ensure they had sufficient savings.

In a statement, the federation said it was very concerned that withdrawals from EPF members' savings through i-Lestari, i-Sinar and i-Citra facilities with a total withdrawal of RM101.1 billion. According to MEF the prolonged wiithdrawal will expose members to the risk of insufficient funds during their old age.

It was reported that currently, 48 per cent of EPF members under the age of 55 have very low savings.

“The government should not allow any more withdrawals. In order to increase their EPF savings, members who make withdrawals from their EPF savings have to work for four to six years just to cover the amount they withdrew during the Covid-19 period, ”said MEF President Datuk Dr Syed Hussain Syed Husman.

He said based on the expected retirement age the employees would not have enough EPF savings for their retirement.

“The government needs to think of other schemes to help them rather that withdrawing EPF savings for old age.

The president highloghted that the responsibility cannot be handed over to individual employees. It is the role of the goverment to take care of the citizens when they retire as their cotribution has been invaluable.

The MEF also proposed that the current policy of allowing one -third withdrawals after 50 years and withdrawals of all EPF savings at the age of 55 be reviewed. "Based on the retirement age being raised from 55 to 60 years, it is no longer relevant for the EPF to allow members to withdraw their EPF savings when they reach the age of 55," he said.

EPF has also reiterated that members savings has been depleting ever since the withdrawal scheme was introduced, in essence only three per cent of Malaysians could afford to retire comfortably based on current savings. 

MEF added that it is clear for an urgent need of comprehensive solutions covering effective social safety net programs, strong labor market policies, sustainable economic growth, re -skills and upgrading of the workforce as well as policies to promote automation and digitisation to help increase productivity and make greater economic dominance so that employees have a better chance of earning more income. 

To give employees a better future in the later years, the government has to design more wholisitic solution than offering peacemeal stop gap measures. 
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