Despite signs of recovery, a majority of Employees Provident Fund (EPF) members remain below the basic savings threshold, years after large-scale Covid-19 withdrawals drained retirement funds.
Finance Minister II Datuk Seri Amir Hamzah Azizan told the Dewan Negara that as of 31 July 2025, only 2.85 million of the 7.44 million members aged 18 to 55 had met the basic savings requirement, representing just 38.3%. While an improvement from 30.4% in December 2022, the figure highlights the lingering impact of pandemic-related withdrawals.
Image credit: The Edge Malaysia
Pandemic withdrawals took RM145 billion
Amir Hamzah said the government’s decision to allow four COVID-19 special withdrawal schemes, which is i-Lestari, i-Sinar, i-Citra, and the 2022 special withdrawal facility, helped families weather economic shocks, but came at the expense of retirement security.
More than 8.2 million contributors tapped their savings, with withdrawals totaling RM145 billion.
Who has met the basic savings target?
Among those who have managed to meet the EPF’s basic savings target, the breakdown is as follows:
- 1.38 million Bumiputera members
- 1.22 million Chinese members
- 214,000 Indian members
- 38,000 members from other ethnic groups
The disparity, Amir Hamzah noted, reflects how certain groups, particularly Bumiputera members, were disproportionately affected by the withdrawals.
New account structure and no more withdrawals
With recovery in mind, the EPF has revamped its account system into:
- Account 1: Retirement
- Account 2: Housing, education, healthcare
- Account 3: Flexible withdrawals for emergencies
Amir Hamzah stressed that the government has no plans for further special withdrawals, warning that savings levels have fallen too low for some groups.
Image credit: PARLIMEN MALAYSIA (YouTube)
Reaching the basic savings benchmark
Looking forward, EPF is phasing in higher benchmarks under its Retirement Income Adequacy (RIA) Framework:
- Basic Savings: RM390,000 (up from RM240,000), allowing monthly withdrawals of RM1,625.
- Adequate Savings: RM650,000, allowing modest monthly withdrawals of RM2,708 initially.
- Enhanced Savings: RM1.3 million, supporting monthly withdrawals from RM5,417.
The framework, aligned with Malaysia’s life expectancy, encourages members to plan for 20 years of post-retirement income.
Strengthening retirement savings
Amir Hamzah said the EPF is also reviewing a proposal to offer a monthly pension scheme for new members, with existing contributors given the option to opt in once it is introduced.
“The focus is now on strengthening retirement savings and ensuring that members enjoy a sustainable retirement income,” he said.
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