According to the Finance Ministry, 7.34 million EPF members benefited from special withdrawals totaling RM101 billion.
According to the Ministry of Finance (MoF), the three special withdrawals from the Employees’ Provident Fund (EPF), namely i-Lestari, i-Sinar, and i-Citra, benefited 7.34 million members, or 58% of the 12.6 million members under 55 years old.
The ministry stated in a written reply to the Dewan Rakyat today that the total withdrawals amounted to RM101 billion.
The MoF emphasised that the implications of these extraordinary withdrawals, particularly from Account 1, had resulted in a long-term effect, namely a large reduction in the members’ retirement funds.
As of December 31, 2021, 6.1 million members under the age of 55, or 48%, had savings balances of less than RM10,000 in their EPF accounts, owing to the bulk of members withdrawing their funds through i-Lestari, i-Sinar, and i-Citra.
Members with a RM10,000 balance can expect a monthly retirement income of less than RM42 for the next 20 years.
Furthermore, as a result of the special withdrawals, the percentage of members with basic savings (RM240,000 at 55 years) dropped from 36% in 2020 to 30% by the end of 2021.
This circumstance implies that 70% of members aged 55 and under, or two-thirds, are in a perilous financial situation, with insufficient funds to retire above the poverty line.
The EPF forecasts that members will need to labour for another four to six years to recover their savings that were drained during the pandemic, according to the ministry. As a result, any more i-Citra withdrawals or new special withdrawals would compound the problem of insufficient retirement savings, which is already at alarmingly high levels.
According to EPF data, contributions for 2021 climbed by 2.6 percent to RM71.8 billion, up from RM70 billion in 2020.
The findings implied that the reopening of the economy, which allowed firms to operate completely, allowed individuals to return to work and earn enough money to support their families.
Following this, the ministry noted that many parties, including labour unions, have declared that any further withdrawals would jeopardise members’ retirement savings, increase the government’s financial burden in the future, and violate the EPF’s founding goal.
