KUALA LUMPUR, Dec 29 — There is no provision in the Employees Provident Fund (EPF) Act 1991 that permits withdrawals under natural disasters, according to the EPF.
In a statement, it informed that the organisation is governed by the Act which stipulates that Account 1 or 70 per cent of savings is designated for retirement, while Account 2 (30 per cent) is meant for discretionary withdrawals aimed at securing a brighter retirement in the future.
“The EPF asserts its commitment to help members rebuild their retirement income adequacy and supports the discontinuation of any further withdrawals of EPF savings under the i-Citra scheme for members to ensure their retirement future would not be further compromised,” read the statement.
It said the i-Lestari and i-Sinar withdrawals in 2020, followed by i-Citra in July 2021, had been exceptional as the initiatives were extended to meet the urgent cash flow needs of members during the periods of the movement control orders (MCOs) and the subsequent economic slowdown.
The withdrawals have led to 6.1 million of its members now having less than RM10,000 in their EPF accounts, of which 3.6 million have less than RM1,000, it said.
The majority of those who have made emergency withdrawals were Bumiputera members, it said, adding that as a result, 4.4 million or 54 per cent of Bumiputera members now have less than RM10,000, and two million or 25 per cent have less than RM1,000.
“This is particularly worrying as the numbers show the increasing percentage of members not meeting the EPF Basic Savings threshold of RM240,000 which is the minimum amount members should have when they reach age 55 to have a decent retirement,” said the statement.
It said, currently, there are more than RM270 billion EPF savings that can be withdrawn at any time by EPF members who have reached above age 55 or 60, or those who have more than RM1 million in their EPF account.
The EPF also stressed that the focus now is to continue to safeguard members’ savings, in line with its mandate, and bring members back to restoring and rebuilding their retirement savings to ensure they can secure a dignified retirement.
Meanwhile, it said as part of the Disaster Response Network, it has allocated RM10 million to assist flood victims, which comes from savings derived from EPF’s budgeted operational expenditure.
Previously, there were calls from various quarters urging the government to approve the withdrawal of RM10,000 under the EPF’s i-Citra scheme to allow flood victims to rebuild their lives affected by the recent massive floods.
— Bernama
