Employees Provident Fund (EPF) members have been reminded to exercise caution when withdrawing from their savings via the i-Lestari Withdrawal Scheme. This is to ensure that they will still have enough to tide them over in the future upon overcoming the current crisis.
The reminder came as the Ministry of Finance announced that 1.5 million i-Lestari applications have been approved for next month’s disbursement as of 17 April 2020. In total, there are 2.8 million applicants for the facility.
“I would like to remind our contributors that their EPF savings are for the future. There needs to be a balance. We should not be overly worried about the current situation and finish our savings which are meant for the future. While there is a crisis, I’m sure that the crisis will eventually end,” said the chief executive officer of EPF, Tunku Alizakri Alias, in an interview with Astro Awani today.
Tunku Alizakri supported his comments with several troubling figures derived from the fund’s data. It was found that 71.4% of those who are self-employed have less than one month’s worth of savings. 82.7% of those working in the private sector, on the other hand, only have enough to support themselves for less than two months.
Tunku Alizakri also attributed the large number of i-Lestari applications to the fact that the programme was launched before the government announced the Prihatin Economic Stimulus Package. The i-Lestari Withdrawal Scheme, which allows contributors to withdraw up to RM500 per month for 12 months from their Akaun 2, was announced on 23 March 2020 – four days ahead of Malaysia’s second economic stimulus package. Applications for the withdrawal scheme then commenced on 1 April 2020, with a dedicated portal soon introduced for more convenience.
With the various financial assistance offered via the Prihatin Economic Stimulus Package, Alizakri said that EPF contributors now have even more reason to think twice before applying for the i-Lestari facility. In the interview, he also encouraged SMEs to tap into these assistance provided, seeing as there are about 480,000 registered SMEs providing jobs for seven million Malaysians.
(Source: The Edge Markets)