KUALA LUMPUR, March 1 (Bernama) — The government’s move to contribute RM500 to two million Employees Provident Fund (EPF) members can help rebuild their retirement savings.
Senior lecturer in the Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, Dr Muhammad Iqmal Hisham Kamaruddin, also described the initiative as an effective measure to assist contributors.
“If contributors can keep the RM500 in their savings, those aged 40 now will have more than double or RM1,039.46 when they reach 55 years old,” he told Bernama when contacted.
He said the government’s aid and continuous savings by contributors would also help reduce the percentage of EPF members aged 55 and below who do not have enough to retire on.
When tabling the Budget 2023 on Feb 24, Prime Minister Datuk Seri Anwar Ibrahim announced that the government agreed to contribute RM500 to two million EPF members aged between 40 and 54 with less than RM10,000 in their Account 1, involving an allocation of almost RM1 billion.
Muhammad Iqmal Hisham also said that the RM145 billion withdrawn through four facilities had reduced the number of EPF active members with basic savings of RM240,000 at the age of 55 from 36 per cent in 2020 to 29 per cent at the end of 2022.
“Withdrawals through the i-Lestari, i-Citra, i-Sinar and special withdrawals programmes were previously made for emergency situations, especially for survival when COVID-19 hit the country.
“Therefore, urging (the government) to allow another round of withdrawal is seen as less appropriate considering there are no pressing needs,” he said.
At the same time, an economic analyst from UniKL Business School, Assoc Prof Dr Aimi Zulhazmi Abdul Rashid, said investments in retirement funds and dividends received by contributors would be affected if the EPF fund is less than RM1 trillion.
Meanwhile, a senior lecturer in the Department of Economics, Faculty of Business and Economics, Universiti Malaya Nurulhuda Mohd Satar said the issue of social security after retirement is becoming a growing concern in the country, especially for those who cannot afford to make other savings other than EPF.
“We (contributors) need to consider the long-term effects of any initiative implemented, especially in dealing with the uncertain economic situation. In principle, this move will bring returns to the contributors themselves when economic growth can be accelerated.
“However, the government needs to play a role in ensuring no leakages so that all levels of society truly feel the trickle-down effect,” she said.
Nurulhuda said that although the government’s move not to allow more EPF withdrawals disappointed some quarters, contributors can always optimise the benefits from other incentives offered by the government.
Source: BERNAMA News Agency
