As the public continues to face cashflow challenges amidst the challenging financial landscape, Malaysians and several organisations have appealed to the government to reconsider its stance on not allowing withdrawals from Employees Provident Fund (EPF) contributors’ Akaun 1 savings.
EPF savings is divided into two accounts: Akaun 1 and Akaun 2. At present, the funds in Akaun 1 cannot be accessed until you retire at age 55, whereas money in Akaun 2 can be partially withdrawn for specific reasons.
Numerous netizens have taken to their social media to urge the government to allow withdrawals from Akaun 1, citing dire financial situations as a main reason. They explained that while they understand the purpose of EPF savings as their retirement funds, there is an urgent need for cash to survive the present if they want to make it into the future.
Various organisations have also expressed a similar sentiment. “We believe that it (the withdrawal) should be allowed, subject to available funds in the members’ own Akaun 1,” said the Malaysia Consumers Movement (MCM) president, Darshan Singh Dhillon, although he also emphasised that each withdrawal should be treated on a case-to-case basis, with a withdrawal limit of RM10,000 or based on available funds.
National Association of Skilled Workers (PKPB) secretary-general, Mohammad Rizan Hassan said that if allowed, the leeway to withdraw from Akaun 1 will lessen the burden faced by skilled workers from the manufacturing sectors. Rizal further said that skilled workers have been severely affected due to the drop in overtime work. Many semi-skilled workers are also unemployed after factories are forced to shut down or downsize their operations, with some factories switching to full dependence on automation.
Similarly, the National Council of Professors (MPN) had also called for the government to study the proposal to allow EPF withdrawals as it will help alleviate the financial burden faced by the people, especially retrenched workers. It added that contributors can increase their contribution to recover the amount once the situation has improved in the future.
That said, a few other organisations have advised against allowing withdrawals from EPF Akaun 1. The president of the Malaysian Trades Union Congress (MTUC), Datuk Abdul Halim Mansor said it would lead to more workers losing out on their long-term security. “EPF contribution serves as an old-age savings, and I strongly feel that it should remain so. When the government allowed contributors to withdraw their EPF savings in March, some of them exhausted their i-Lestari Akaun 2 in just two months,” he said.
Abdul Halim was referring to the i-Lestari Withdrawal Scheme, which was introduced in March to help Malaysians with their cash flow problems during the Covid-19 pandemic. The scheme allows eligible EPF members to withdraw up to RM500 per month from their savings in Akaun 2, for a total of 12 months.
Meanwhile, the Congress of Union of Employees in the Public and Civil Services (Cuepacs) said that it abided by the government’s stance to not permit such withdrawals. “We feel that it will help if the contributors are allowed to withdraw from Akaun 1,” said the secretary-general of Cuepacs, Abdul Rahman Mohd Nordin. “However, if the contributors cannot withdraw their savings from Akaun 1, then at least help them with financial aid. Perhaps the government can continue disbursing help to the people such as giving cash aid like what it did with the Bantuan Prihatin Nasional.”
The government has yet to issue any statements regarding the proposal to allow withdrawals from EPF Akaun 1, but Prime Minister Tan Sri Muhyiddin Yassin has chimed in to say that it is quite difficult to implement. He also commented that the government had already disbursed billions in cash aid to ease the people’s burden, and that the public can expect more aid to come.