Can Malaysians save for retirement if PM Ismail Sabri allows more EPF withdrawals?
- Malaysians facing financial hardship have been able to withdraw cash from their pension on four separate occasions during the pandemic
- Experts say the policy harms the financial future of the country’s most vulnerable, and raising the minimum wage is a better way to help
The Employees Provident Fund (EPF), introduced in 1951, has long been the sole safety net for most people. Contributions to the fund, which has more than 1 trillion ringgit (US$236.7 billion) in assets, are compulsory by law and withdrawals are only allowed once citizens turn 55, barring exceptional cases.
Heeding those calls, the government last year directed that citizens be allowed to draw down some funds from their accounts, a development that the provident fund’s chief executive Amir Hamzah Azizan later said “shook us to the core”.
While members are allowed to use a portion of their EPF to pay for certain needs including a deposit for their first home and medical emergencies, this was the first time ever that an ad hoc early withdrawal of this sort had been allowed.
“We cannot ignore the fact that we did good for the guy who did not have funds to survive the down cycle,” Amir Hamzah said in an interview with The Edge newspaper.
“Last year’s withdrawal kept me alive,” said Shamaine Othman, a writer, comedian, actor and producer who saw her income halved during the imposed lockdowns, which forced many entertainment-related activities to be cancelled.