Prime Minister Datuk Seri Anwar Ibrahim has once again highlighted the critical state of the people’s Employees Provident Fund (EPF) savings, this time noting that 81% of EPF members will not have sufficient savings to live above the poverty line after their retirement. This is as only 19% of contributors were shown to have reached the basic savings threshold established to be appropriate for their age, if they were to have a minimum of RM240,000 in savings by 55 years old.

“This directly shows that 81% of contributors aged 55 and below are in a serious situation where their savings will not be enough for them to retire above the poverty level,” said Datuk Seri Anwar. For context, Malaysia’s poverty line is currently set at RM2,208, while the rate for hardcore poor is fixed at RM1,169.

The prime minister, who is also the Finance Minister, revealed as well that 56% of those who will turn 55 years old by next year – and therefore can withdraw their EPF savings in full – currently only have RM50,000 or less in their retirement fund. “RM50,000 can only provide retirement income of about RM208 a month for a period of 20 years,” he stressed.

To further emphasise the gravity of the problem, Datuk Seri Anwar reiterated as well that as of 31 December 2022, more than 51% of the 13.1 million contributors aged below 55 were found to have RM10,000 or less in their EPF accounts (it was previously reported that  52% of 12.78 million EPF members aged below 55 had EPF savings of less than RM10,000 as of June 2022). Of this group, 26% are 40 years old and above, who have 15 more years to go before they can withdraw their retirement savings.  

“For this group, their EPF savings will only give them a retirement income of less than RM42 a month over a period of 20 years,” said the prime minister.

In light of this dire situation, Datuk Seri Anwar has been resolutely against allowing another round of special EPF withdrawal as a way to assist individuals who have yet to recover from the financial impact of Covid-19 and recent calamities. This is despite calls from multiple parties for the government to do so.

In response, the prime minister offered a compromise in the form of the EPF Akaun 2 Support Facility, which allowed EPF members to use their Akaun 2 savings as support to take out personal financing from participating banks. This facility – which currently involves MBSB Bank and Bank Simpanan Nasional (BSN) – has begun since 7 April 2023, with Phase 1 to be implemented for eligible members aged 40 to 54 years old first. Phase 2 will be announced at a later date for members aged 40 years old and below.

(Source: Focus Malaysia)

• TAGS:
• Akaun 2
• Datuk Seri Anwar Ibrahim
• Employees Provident Fund
• Employees Provident Fund (EPF)
• EPF
• EPF Akaun 2
• EPF Akaun 2 Support Facility