EPF to rebuild members’ retirement financial savings

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KUALA LUMPUR: Following the particular withdrawal services as a result of Covid-19 pandemic, the Workers Provident Fund (EPF) is now targeted on helping members to rebuild their financial savings for his or her retirement future.

The withdrawal services had been distinctive in nature and had been launched contemplating the circumstances on the time the place the pandemic severely impacted the native economic system, the fund mentioned.

These withdrawals, particularly i-Lestari, i-Sinar and i-Citra, resulted in a complete of RM101bil being disbursed to over 7.4 million members, which is near half of all EPF members.

“Whereas they supplied some monetary reduction to members in the course of the pandemic and varied motion management orders, the withdrawals have inevitably led to six.1 million members now having lower than RM10,000 of their EPF accounts, of which 3.6 million have lower than RM1,000, leaving them susceptible and unprotected for his or her retirement,” it mentioned in a press release.

The drop in financial savings is especially worrying for bumiputra members, as they made up 78% or greater than three quarters of the withdrawal candidates.

Because of this, 4.4 million or 54% bumiputra members now have lower than RM10,000, and two million or 25% have lower than RM1,000.

The underside 40% of EPF members (about 5 million members) noticed their financial savings drop by 38% to simply RM8bil, translating right into a median financial savings stability of RM1,005.

The center 40% additionally suffered a decline of 18% to RM155bil, or a median stability of RM24,995.

Solely the highest 20% of members aged under 55 noticed a rise in financial savings however this interprets to a median of RM152,043, or equal to simply RM633 per thirty days for 20 years.

“The three distinctive withdrawals have left 73% or practically three quarters of members in a severe state of getting insufficient funds to retire above the poverty line,” it mentioned.

The EPF estimates that members might want to work between an additional 4 and 6 years to rebuild the financial savings which were utilised in the course of the pandemic, which has additionally led to a major drop within the share of members assembly the fundamental financial savings threshold (RM240,000 at age 55) from 36% in 2020 to an estimated 27% by the tip of this yr.

Towards this must safeguard members’ future and rebuild their retirement funds, future distinctive withdrawals will should be very fastidiously thought of, it mentioned.

With the measures put in place to help the restoration of the economic system and spur employment, the fund hopes that it will go a way in direction of addressing the wants of the rakyat.

In the meantime, Bernama quoted EPF chief technique officer Nurhisham Hussein as saying that the Covid-19-related withdrawals resulted in lots of members under age 55 having critically low EPF financial savings.

“Even with Covid-19, 80% of Malaysian males and 90% of Malaysian ladies will attain age 60, whereas one out of three males and two out of three ladies will attain age 80.

“We now estimate that solely 3% of Malaysians can afford to retire,” he mentioned on the Perdana Fellow Alumni Affiliation Speaker Collection webinar.

Nurhisham was one of many panellists on the webinar, titled “Healthcare in Focus”.



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