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THE government has no plans of introducing further targeted withdrawals for Employees’ Provident Fund (EPF) contributors, said Prime Minister, Datuk Seri Anwar Ibrahim.
"Allowing contributors to withdraw more money from their EPF would disadvantage them in their later years, leaving them without financial support.
"The government has had to strike a balance between solving the urgent problem they faced and punishing them when they retire in the future with no means of self-contribution,” he said in the Dewan Rakyat today.
Anwar, who is also the finance minister was responding to a supplementary question from Nurul Amin Hamid (PN-Padang Terap).
Nurul Amin had asked whether the government would consider allowing targeted withdrawals for EPF contributors who have stopped working or lost their jobs.
"If Padang Terap (Nurul Amin) has any specific cases to highlight, EPF can consider them on a case-by-case basis, as they have done for urgent situations," he said.
He also said the government does not intend to make it mandatory for Muslim contributors to the EPF to contribute to Syariah savings automatically.
However, he said that the government highly encourages them to do so through a series of incentives and explanations regarding Syariah financial instruments, which are hoped to increase the number of Muslim contributors in these types of savings.
He said that the EPF's achievement in announcing a higher dividend rate of 6.30 percent for both conventional and Syariah savings for 2024 was also hoped to encourage Muslims to switch to the latter.
However, Anwar, who is also the Finance Minister, said he believed the EPF could give due consideration to urgent cases even if they did not follow existing EPF regulations.
Meanwhile, in reply to Chiew Choon Man (PH-Miri) regarding EPF contribution for non-citizens, which was seen as burdening employers and diverting the EPF's attention from focusing specifically on Malaysians’ retirement savings, Bernama cited Anwar sying the move would not reduce the EPF's attention to the locals.
In fact, he said that the government has introduced various initiatives, such as voluntary contributions for self-employed individuals in 2024, with 1.2 million members already making voluntary contributions.
“We also have i-Saraan and i-Suri schemes to support the informal sector, especially housewives. The government incentives for these schemes have reached RM4.16 million,” he said.
The Prime Minister said the minimum contribution of two percent imposed on non-citizen workers was also deemed not burdensome, but instead allowed the government to register the number of foreign workers as a whole.
“We are also bound by international standards - Article 68 of Convention 102 of the International Labour Organisation (ILO). That is why we see almost 70 countries use the contribution method, although most countries set higher contributions,” he said.
Anwar said the EPF and the Ministry of Finance had also held engagements with all large companies and micro, small and medium enterprises (MSME) to discuss mandatory contributions for foreign workers.
In response to Datuk Mohd Isam Mohd Isa (BN-Tampin) on the same issue, the Prime Minister said the EPF contribution for foreign workers, among other things, aims to reduce the country's dependence on foreign workers and provide space for local workers to fill job opportunities.
He said the move also encourages foreign workers to return to their country after the end of their period of service in Malaysia since the government will require them to state a record of leaving the country before they can withdraw their EPF contributions.
“Since we have started to restrict the entry of foreign workers, we will impose this contribution and this contribution will also determine the record and attraction so that when they return they know they have money.
“If they have to be hired in the current situation, let them be subject to the same methods, systems and regulations as local workers, including EPF contributions even though (the rate) is minimal,” he added. – March 4, 2025
