Wednesday, November 30, 2022

Finance Minister Says EPF Is Not The Solution To Challenges, Stresses Importance Of Retirement Plan

NewsFinance Minister Says EPF Is Not The Solution To Challenges, Stresses Importance...

Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz has responded to the calls for the Employees Provident Fund (EPF) to once again allow its contributors to withdraw a one-off RM10,000 under i-Citra to help them get through these difficult times.

He said that this should not be seen as a solution or a way to overcome challenges as this will affect the retirement savings of contributors, especially when Malaysia is expected to hit aging nation status by 2030.

“This means that in eight years, retirees or senior citizens will make up 15%, or 5.3 million people, of the population, and 8 years is not a long time.”

Source: MalaysiaKini

“They are going to need higher savings to support themselves after retirement,” he said in a video posted on Facebook.

Zafrul also stressed that the EPF savings are meant to help contributors when they retire and said the government has provided various initiatives to help flood and Covid-19 victims.

He also said that EPF had up to date, allowed withdrawals of up to RM71,000 for each EPF member, totalling up to RM101 billion under the i-Lestari, i-Sinar dan i-Citra programmes.

In addition, the government has provided various financial aid programmes such as the RM10 billion Bantuan Prihatin Rakyat (BPR) to help the lower income groups of B40 and M40, Covid-19 Special Aid (BKC), and the Loss of Income Aid (BKP) which have benefitted 11 million recipients.

“If we continue to allow withdrawals whenever a disaster happens, the aim of retirements savings will never be realised,”

“In the formulation of policy, the government needs to be responsible and to think long term, including the wellbeing of our grandchildren.” he said.

Zafrul added that the median savings of the B40 group are at an alarming stage, with many having a balance of around RM1,000. He explained that if this continues until their retirement, they would only have RM4 a month to spend for 20 years.

Meanwhile, the M40 group’s median savings of RM25,000 would translate into RM104 to spend per month for the same period.

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