MOF: Inadequacy Of Retirement Savings Will Be Worsened By Further EPF Withdrawals

Alex Cheong Pui Yin

24th November 2023 - 2 min read

The Ministry of Finance (MOF) has warned that the existing issue of insufficient retirement savings will be further worsened by the introduction of any new or additional pre-retirement Employees Provident Fund (EPF) withdrawals, regardless of whether it is targeted or open. It also stressed that such withdrawals are not practical long-term solutions to the increasing financial burden of the people.

The ministry further reiterated that a total of 6.3 million EPF members under the age of 55 have savings of less than RM10,000 in their accounts as of 30 September 2023. In comparison, 4.7 million members had less than RM10,000 EPF savings back in April 2020, before any Covid-19-related withdrawals were introduced.

“With savings of less than RM10,000, members are expected to have retirement income of less than RM42 per month for a period of 20 years,” MOF added, responding to enquiries if the government may allow more targeted EPF withdrawals in the future – given that there are some segments in the public that are requesting for it.

Aside from that, the ministry also said that the government does not have plans to reintroduce the goods and services tax (GST) at the moment, taking into account the impact that it will have on the cost of living for the people. “Therefore, the government is always monitoring the current economic situation and considering fiscal measures that are suitable for short-term and medium-term needs,” it shared.

Finally, the ministry highlighted that Malaysia’s economy has improved enough that it is no longer in the recovery phase, with its gross domestic product (GDP) even surpassing pre-pandemic levels.

“Economic activities are picking up as many businesses are operating at full capacity and most workers have returned to work to generate income. This is evident as the number of active EPF members has also reached the highest level in history, namely 8.5 million as of September 2023, with an increase of 910,000 members, or 12% compared with 7.6 million recorded in September 2021,” MOF noted.

(Source: Malay Mail)

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Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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