PETALING JAYA: Economists have suggested that the Employees Provident Fund (EPF) come up with a special loan scheme to help contributors who are facing financial difficulties.
Dr. Barjoyai Bardai of Universiti Tun Abdul Razak suggested that the scheme could offer loans of RM50,000 to RM100,000 at a return rate of 5% per annum and an interest rate of 2% per annum, with a 3% compounding effect from EPF dividends, The Malaysian Insight reports.
He believes this would help alleviate the retirement crisis facing contributors who have less than RM10,000 in their savings, following their early EPF withdrawals during the pandemic.
EPF’s Chief Operating Officer, Amir Hamzah Azizan, has noted that the special withdrawals made during the pandemic amounted to RM145.5 billion, which is larger than the individual gross domestic product (GDP) of some 100 countries and territories.
The erosion of savings levels due to multiple pandemic-related withdrawals has been particularly severe for Bumiputera and Indian community below the age of 55.
Meanwhile, Putra Business School academic, Dr Ahmed Razman Abdul Latiff said the government must increase the minimum wage to allow more savings in EPF.
He, however, noted that it was not easy to just increase the salary of an ordinary worker without them acquiring special skills or knowledge.
“Giving out cash aid like we used to do is not solving the problem. It only solves people’s problems for a day. The way is to increase salaries, and by doing so, it will increase EPF contribution.
“But to increase salaries, one must acquire specific skills and expertise. For example, let’s say a foreign investor opens a factory and only hires low-skilled workers. We must not allow that to happen.
“We must have a policy that they hire and transfer knowledge to our workers.
“At the end of the day, we can produce skilled workers and not just low minimum wage labourers,” the academician reportedly said.
