Friday, March 31, 2023

MOF reveals that over 50% of EPF members have less than RM10,000 in account

NewsMOF reveals that over 50% of EPF members have less than RM10,000...

Deputy Finance Minister I Datuk Mohd Shahar Abdullah said that the level of savings of Employees Provident Fund (EPF) members is now at a worrying level after the implementation of four withdrawal facilities throughout the Covid-19 lockdowns.

The 4 withdrawal programmes are i-Lestari, i-Sinar, i-Citra, and the special one-off withdrawal of RM10,000. In total, members have withdrawn RM145 billion from their retirement fund.

Mohd Shahar said this is in addition to the reduction in the employee share statutory contribution rate for a period of 27 months from April 2020 to June 2022, reported The Edge.

“Overall, the impact of these programmes related to Covid-19 on members’ savings is estimated at RM155 billion, which consists of RM145 billion withdrawn by members under the four withdrawal programmes, and almost RM10 billion from the impact of the employee share statutory contribution rate reduction programme,” he said.

The deputy minister was responding to a question by Senator Datuk Razali Idris, who asked about the measures the government would take to save EPF members with savings of less than RM10,000, with 55% of them being Bumiputeras and, even more worryingly, 79% of EPF members with savings of less than RM1,000 are also Bumiputeras.

According to Mohd Shahar, as of 30 June, a total of 6.62 million members or 52% of the total of 12.78 million EPF members aged under 55 had savings of less than RM10,000. Of that number, 4.99 million members or 75% were Bumiputera members.

He also revealed that there were 3.2 million members under the age of 55, who were at a very critical savings level of less than RM1,000, of which 2.58 million members or 81% of them were Bumiputera members. 

Meanwhile, he said the ministry’s effort to help members increase and rebuild their retirement savings includes providing various channels to make it easier for members to contribute to the EPF itself.

“For members who are employed and have an employer, they can choose to contribute beyond the employee share statutory contribution rate of 11% at any time. In addition, they can also contribute to the EPF themselves at any time, subject to a maximum amount of RM60,000 per year,” he said. 

For members who are self-employed, who have no fixed income or are outside the labour force, such as students and housewives under the age of 60, Mohd Shahar said they can also choose to contribute to the EPF voluntarily at any time, according to their ability under the i-Saraan programme, up to RM60,000 per year. 

“As an incentive to encourage this group to save under i-Saraan, the Government provides a contribution of 15% of the total contribution, or up to RM250 per year,” he said.

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