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KUALA LUMPUR – The Employees Provident Fund (EPF) should not be seen as a solution or a means to overcome challenges, as this will affect the retirement savings of contributors, especially when Malaysia is expected to hit aging nation status by 2030, said Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz.
“This means that in eight years, retirees or senior citizens will make up 15%, or 5.3 million people, of the population, and eight years is not a long time.
“They are going to need higher savings to support themselves after retirement,” he said in a Facebook posting today.
Tengku Zafrul said this in response to certain quarters that have been urging the government to allow a one-off i-Citra withdrawal of RM10,000 for contributors affected by flooding in the country.
The finance minister stressed that EPF savings are meant to help contributors when they have retired and noted that the government has provided various initiatives to help flood and Covid-19 victims.
Up to now, through the i-Lestari, i-Sinar and i-Citra programmes, each EPF member is allowed to withdraw up to RM71,000, with the withdrawals totalling RM101 billion.
Apart from that, the government has also provided various financial aid initiatives to help the people, such as the RM10 billion Bantuan Prihatin Rakyat to help the lower income groups of B40 and M40, Covid-19 Special Aid, and the Loss of Income Aid which have benefitted 11 million recipients.
“If we continue to allow withdrawals whenever a disaster happens, the aim of retirement savings will never be realised,” he added.
“In formulating policy, the government needs to be responsible and to think long term, including the wellbeing of our grandchildren.”
He said the issue of insufficient savings is at an alarming stage and noted that the median savings of the B40 is at RM1,000.
If this level continues until their retirement, they would have RM4 a month to spend for twenty years, while for the M40 group, their savings of RM25,000 will translate into RM104 to spend per month for the same period.
Meanwhile, Tengku Zafrul said the government has distributed and expanded financial aid to RM1,000 for flood victims, in addition to other forms of help, such as helping them to buy electronic items and a 50% discount for car parts. – Bernama, January 2, 2022