Govt to study proposal for withdrawal from EPF Account 1: PM

Kuala Lumpur: The government is studying the suggestions to allow certain contributors such as laid off workers to withdraw funds from Account 1 of the Employees’ Provident Fund (EPF).

"I have discussed with the Finance Ministry and we basically agreed and are prepared to study the proposal for contributors who really need to withdraw allocations from Account 1," Prime Minister Tan Sri Muhyiddin Yassin said here, today.

The government had already implemented a relaxation in 2020 relating to the EPF, especially in allowing workers’ contribution rate reduced to 7.0 per cent from 11 per cent and also the i-Lestari withdrawal from Account 2 of RM6,000 per contributor.

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Almost 70 per cent of the EPF members had opted to reduce the workers’ contribution to 7.0 per cent which now have increased the disposable income to close to RM700 million per month, he said in an interview with BERNAMA and local television stations ahead of Budget 2021 on Friday.

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At the same time, more than 30 per cent of the EPF members have savings of less than RM5,000 in their accounts, hence, EPF savings may not necessarily address the cash flow problems of the contributors.