25 Nov - 2 min read
Deputy Finance Minister 1, Mohd Shahar Abdullah has clarified that Employees Provident Fund (EPF) members who made withdrawals via Covid-19 facilities will have to credit 100% of their future EPF contributions into Akaun 1 to replenish the amount taken out. This includes facilities such as the i-Sinar and i-Citra schemes.
Affected members’ EPF contributions will only revert to the usual ratio of 70% for Akaun 1 and 30% for Akaun 2 after they have fully replenished the amount that has been withdrawn. Funds placed into Akaun 1 have strict withdrawal requirements, while funds in Akaun 2 can be withdrawn for various reasons before retirement.
“This is the government’s effort to increase the savings of members who have made withdrawals through the i-Sinar and i-Citra schemes to ease their burden following the impact of the Covid-19 pandemic,” said Mohd Shahar during a Parliament session, adding that the government will also study other methods to bring the people’s retirement social safety net back to proper levels.
To note, this directive of crediting 100% of members’ future EPF contributions to replenish the amount that has been withdrawn was actually already put in place for the i-Sinar facility from the get-go. During the launch of i-Sinar, the EPF explained that the scheme is an advance facility, and members who tap into it are required to replenish the advances taken out by crediting 100% of their future EPF contributions to Akaun 1 until the amount is fully replaced. It seems that this approach has now been expanded to cover other Covid-19 withdrawal facilities as well.
Aside from that, Mohd Shahar also shared that following all the i-Sinar and i-Citra withdrawals that have been made thus far, only 27% of active members aged between 18 and 55 years old are able to meet the basic savings threshold and schedule stipulated by the EPF. The basic savings threshold is an estimated amount that is considered to be sufficient to support a member’s basic needs for 20 years upon retirement. To achieve this threshold, EPF has prepared a schedule that specifies how much basic savings quantum a member should have based on their age.
Finally, the deputy finance minister said that the withdrawals made via the i-Lestari, i-Sinar, and i-Citra facilities will not affect the domestic financial markets. Earlier this week, EPF had revealed that a total of RM101.1 billion has been withdrawn under all three facilities.
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