7th December 2020 - 5 min read
The Employees Provident Fund (EPF) has offered more clarity with regard to the i-Sinar facility, following some questions submitted from the media. In its response, as compiled by Bernama, the provident fund addressed various issues brought up, such as the public’s disappointment with the revised facility and certain aspects of the application process.
On the matter of the public’s dissatisfaction with the conditions put in place for i-Sinar, which they said were troublesome and difficult, the EPF commented that there are actually no conditions for the facility’s application. Instead, what was outlined were the criteria to ensure that the application matches the EPF’s internal data, which will speed up the approval process; members who fulfil the criteria will have their applications approved immediately. Additionally, the process of verification is also necessary to avoid fraud and improper withdrawal of i-Sinar funds by third parties.
The EPF also explained that it is not possible to provide a blanket approval for i-Sinar based on the applicants of i-Lestari because the situations under which both facilities were launched were very different. It said that the country’s economic activity had been almost fully halted earlier in the year, whereas the economy now is almost back to normal. To clarify, i-Lestari allows EPF members below the age of 55 to make withdrawals of up to RM500 per month, for a total of 12 months, until 31 March 2021.
On top of that, the EPF said that members who did not suffer a 30% reduction but still need financial assistance, as well as those whose new income is less than previously, can also apply for the i-Sinar facility. “There is still latitude under Category 2 to consider applications from all members who are affected by Covid-19. If you have suffered a reduction in income or salary and have the supporting documents to show for it, you are encouraged to apply on 11 January 2021. The EPF will still consider your application,” said the provident fund.
For context, applicants that fall under Category 2 are members whose total income (including base salary and other benefits such as allowances and overtime) has been reduced by 30% and above.
The EPF also commented that the staggered payment method is more suitable than a one-off payment for a few reasons. The provident fund chose this method based on data on the current liabilities of its members, as well as the need to spread out the period of assistance due to the uncertainty of the pandemic.
According to the EPF, it has decided to provide applicants of i-Sinar with a balance of RM100,000 and below with a first payment of up to RM5,000 as there are more expenses at the beginning of the year, such as school fees. Additionally, the staggered payment option is also more appropriate to help the EPF balance its cashflow and current investments.
Aside from that, the EPF reminded that money withdrawn via i-Sinar must be replenished. According to the provident fund, all future EPF contributions of affected members will be channelled to their Akaun 1 until the amount taken out is replenished. After that, the contributions will revert to the original ratio of 70:30 for Akaun 1 and Akaun 2.
Meanwhile, the EPF also reassured members that its investments have proven to be resilient so far despite the challenges faced during the global economic slowdown. This is chiefly due to its diversification of investment across domestic and global markets, alongside efforts to ensure that it has sufficient cash flow at all times for emergencies, such as the current pandemic.
“Fundamentally, the EPF is a long-term investor and every investment decision made will continue to take into account its responsibility to sustain members’ funds even in unprecedented situations like this pandemic. At the moment, and guided by i-Sinar’s existing structure, all of the EPF’s actions will ensure that there is no impact to the domestic market,” said the provident fund.
Additionally, the EPF cautioned members to consider carefully before withdrawing from their EPF savings. “While the EPF understands the need for members to withdraw from their savings to survive these difficult times, we hope members can plan beforehand on how much is needed so that they can fulfil today’s needs while minimising the impact on their future retirement,” it said.
The EPF also encouraged members to get help from its Retirement Advisory Services (RAS) officers to come up with a financial strategy and to re-plan for their retirement. The RAS is a free consultation service offered by the provident fund to its members.
If you need detailed information on i-Sinar, head on over to the i-Sinar portal or the official EPF website. Alternatively, you can also check out our comprehensive guide on the facility here, which we will update regularly as more information are revealed.
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