KUALA LUMPUR – Data on the level of Employees Provident Fund (EPF) savings for members is low and concerning, said Datuk Mohd Shahar Abdullah, Deputy Finance Minister I.
During the Aug 8 Parliamentary session, the minister explained that the concern for the low EPF savings is particularly after the implementation of the four withdrawal facilities which were COVID-19 related (i-Lestari, i-Sinar, i-Citra, and the special RM10,000 one-off withdrawal).
Furthermore, he stated that the added weight of the reduction in the employee share statutory contribution rate was also a factor.
“The impact of these COVID-19 related programmes on the members’ EPF savings is estimated to be RM155 billion. This consists of the RM145 billion that were withdrawn under the four withdrawal facilities and the nearly RM10 billion from the impact of the employee share statutory contribution rate reduction,” he elaborated.
The comments by Mohd Shahar were made in response to a question by Senator Datuk Razali Idris, who inquired about the measures to save the members with EPF savings of less than RM10,000.
According to Razali, who is the Paya Besar MP, about 55% of the members with less than RM10,000 in their EPF savings are Bumiputeras while those with less than RM1,000 consist of 79% Bumiputeras as well.
Another point of concern was the fact that out of 12.78 million EPF members, 52% (6.62 million) of them who are under the age of 55 have less than RM10,000 in savings with 75% (4.99 million) of them being Bumiputera.
As for the members with less than RM1,000 savings, out of 3.2 million members under 55 years old, 81% (2.58 million) of them were Bumiputera.
He said that EPF has 8.22 million Bumiputera members, making up 64% of the total EPF members under 55.
“This indicates that the majority of Bumiputera members are clustered among those with poor EPF savings, compared to other races,” he added.
EPF savings rebuilding measures
Mohd Shahar highlighted that in an effort to assist the members in increasing and rebuilding their retirement savings, EPF is providing different methods to make it easier for self-contribution.
He explained that the members who are employed and have an employer may be able to contribute beyond their 11% employee share statutory contribution rate at any given time.
Furthermore, the maximum limit of self contribution is set at RM60,000 annually.
Meanwhile, for the EPF members who are self-employed, without a fixed income, or outside the labour force (including students and housewives under 60 years old), he stated that they are also able to perform self-contributions to their EPF savings, based on their ability, under the i-Saraan programme, which also has a maximum limit of RM60,000 annually.
“As an incentive to encourage this segment to save via i-Saraan, the government contributes up to RM250 per year, or 15% of the overall contribution,” he added.
Apart from that, housewives under the age of 55 and are registered under the eKasih database could also perform self-contributions or have their husbands contribute to the Kasih Suri Keluarga Malaysia programme (previously known as the i-Suri), designed to courage women from low-income households to save for retirement.
Under this programme, members who contribute a minimum of RM5 monthly or RM60 per year to their EPF savings will be eligible to get an incentive of RM40 monthly or RM480 yearly from the government.
Mohd Shahar also added that the EPF had continued to stress on the significance of financial planning awareness and knowledge to balance each individuals’ current financial needs and also for their retirement in the future.
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