NST
18 Mac 2022
ALTHOUGH the government has allowed people to make a fourth withdrawal from the Employees Provident Fund (EPF), it should be a last resort for contributors.
Congress of Unions of Employees in the Public and Civil Services (Cuepacs) secretary-general Abdul Rahman Mohd Nordin urged contributors to seek alternatives to cope with their financial commitments before dipping into their retirement savings.
"As the country transitions to the endemic phase, the economy is gradually recovering.
"Economic sectors, such as airlines and tourism, that were previously grounded by the Covid-19 pandemic will resume operations soon. So, don't be hasty in using up all your hard-earned savings now.
"Civil servants, especially, have very few reasons to withdraw from their EPF savings since they have a stable job and are not enduring any pay cut.
"So, please think it through before spending your EPF money," he told the New Straits Times.
Prime Minister Datuk Seri
Ismail Sabri Yaakob on Wednesday announced that contributors could apply to withdraw up to RM10,000 from their EPF savings.
EPF said contributors aged 55 and below were eligible to apply for the special withdrawal between April 1 and 30.
Apart from the age limit, the statutory body did not specify any other criteria to make a withdrawal.
Since the Covid-19 pandemic hit Malaysia in 2020, some 7.34 million contributors have withdrawn RM101.1 billion from the fund through the i-Lestari, i-Sinar and i-Citra schemes.
In October 2021, EPF chief strategy officer Nurhisham Hussein said almost half of EPF members had less than RM10,000 in their accounts.
After i-Citra was introduced in June 2021, total withdrawals by EPF members, which amounted to RM99.5 billion, surpassed total contributions, at RM53.9 billion, for the first time.
Social activist Tan Sri Lee Lam Thye said the government should have mulled other alternatives to help those affected, including spurring job creation and incentivising entrepreneurial activities.
"Although the EPF withdrawal may seem like a quick fix, it does not augur well for the long-term interest of contributors.
"The government should step up hiring programmes and offer low-interest loans to those planning to start businesses.
"If most contributors end up depleting their savings now, then the government must roll out support measures for them during their old age. This will put a strain on the national coffers."
Associate Professor Dr Ahmed Razman Abdul Latiff from the Putra Business School called on the government to offer counselling through either the EPF or the Credit Counselling and Debt Management Agency, before approving withdrawals from EPF.
"Many contributors often overlook other alternatives to solve their financial woes. Most opt to withdraw their EPF savings to repay debts or to manage daily financial expenses.
"A better option to resolve these monthly commitments would be to restructure expenses."If EPF contributors are given such crucial advice, I believe very few would opt to spend their savings."
'DON'T BE HASTY'
