Finance minister shuts door on further EPF withdrawals

(FMT) – Finance minister Tengku Zafrul Aziz has closed the door on additional withdrawals from the Employees Provident Fund (EPF), saying it would only burden the next generation which would have to care for the elderly with no retirement savings.

The government had allowed contributors to tap into their EPF savings as an emergency measure to cope with the effects of the Covid-19 pandemic.

Now, with the severe flooding that has ravaged parts of the country and the continuing pandemic, there have been calls for another round of withdrawals.

The previous withdrawals were exceptional programmes that “had served their purpose and must come to a definite end”, Tengku Zafrul said in a statement reported by Malay Mail.

He said the government would continue to help flood victims rebuild their lives, but would not allow EPF withdrawals to be used for the purpose.

“In the case of the EPF, we cannot continue to be populist by finding easy ways to allow additional withdrawals, especially since the government has provided the largest flood relief package in history.

“Consider the long-term consequences, particularly for our children and grandchildren who will inherit the burden of supporting the lives of the country’s elderly who cannot afford their own retirement.”

Tengku Zafrul said that the floods were not without precedent.

In 2014, when severe floods hit several states including Pahang and Kelantan, the government was steadfast in not allowing anybody to touch “even one sen” from their retirement savings.

He also rebuked parties calling for additional withdrawals and trying to induce the public to do the same.

“Let me reiterate that it was the government that first mooted this idea back in 2020, and it was only made possible after careful consideration and thorough financial and economic evaluation.

“The voices that are now inciting the rakyat on this issue were never involved in that decision, hence they were not privy to the numerous complications and impact analysis.

“Yet, these provocateurs are intent on exploiting the situation, and have laid siege to EPF and the government.”

Over the course of the various rounds of withdrawals, RM101 billion had been channelled to seven million EPF contributors.

This has come at a cost, however, as nearly half the fund’s contributors – about six million – now have less than RM10,000 as retirement savings.