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KUALA LUMPUR: The government’s initiative to allow specific members of the Employee Provident Fund (EPF) to withdraw from their retirement savings in light of the Covid-19 pandemic was a carefully considered decision that would not jeopardize the future. member retirement, said EPF CEO Alizakri Alias.
The 2021 budget has proposed that certain members of the HBS be allowed to withdraw up to RM500 per month from their Account 1, for a total of RM6,000 over 12 months.
According to the EPF, more details about the recall facility will be announced on November 11, while applications for the facility will begin in January 2021.
In early April, the EPF had introduced the i-Lestari withdrawal facility that allowed members to withdraw up to RM6,000 over 12 months from Account 2, which is designated for discretionary withdrawals.
“The COVID-19 pandemic has presented us with unforeseen and severe challenges, especially with regard to loss of employment and source of income,” Alizakri said in comments after the presentation of the 2021 Budget.
However, he noted that the decision to allow members to access savings in Account 1, which is designated for retirement, is unprecedented.
According to Alizakri, the additional selective withdrawal facility is a unique short-term facility that will provide some relief to the most vulnerable and unprotected groups.
Meanwhile, the EPF is considering allowing members to withdraw from their Account 2 to purchase takaful insurance and products covering life / family and critical illness from approved carriers.
The products, which will be offered through i-Akaun, will be customized for EPF members at affordable prices and come with additional features.
In the presentation of the 2021 Budget, the government also announced a reduction of the legal minimum contribution rate for employees from 11% to 9% from January to December 2021, given the depressed economic situation and the reduction in income.
“The COVID-19 pandemic is still here and we have to live with it for years to come. We hope that the extra money in the pockets of our members will increase their disposable income and stimulate domestic consumption, ”said Alizakri.
He added that while these measures are a response to the immediate concerns of members, urgent action must be taken to address deficiencies in the country’s social protection system, which the pandemic has revealed to be inadequate to address the social welfare of Malaysians. .
“As EPF represents almost 50% of Malaysia’s population with a total of 14.6 million members, we will take a very active stance to voice our opinion and help the government create a holistic solution to achieve the social welfare of our people. members in particular, and Malaysians in general.
“We will be active in advocating for social protection together with other agencies and bodies through MySPC (Malaysian Social Protection Council) and we will seek to improve the social protection system for the future of Malaysians,” he said.
The EPF will also strengthen its outreach programs to empower and equip members with financial literacy so they can face future financial challenges while helping them improve their skills.
“We encourage members to make an appointment with our Retirement Advisory Service (RAS) officers to help them effectively plan their finances and seek advice on available solutions,” says Alizakri.
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