KUALA LUMPUR: The Employee Provident Fund (EPF) has denied strongly the speculations via WhatsApp that alleged the retirement funds is facing a cash crisis besides the amendment of EPF Act 1991 that will prevent the retirees from withdrawing their savings.
The retirement savings fund in a statement said, the speculation was referred to the feature published by the Business Times Singapore, 7th April 2023 entitled “Bank Negara says Malaysians could run out of savings 19 years too soon.”
“The Bank Negara Malaysia (BNM) in its report said the situation for the retirees has been a worrisome due to the low salary structure that existed before the COVID-19 pandemic.
“The savings for the 51-55 age groups will only last for five years after the saving withdrawal at the age of 55 and will drop within three years after the pandemic. The report also mentioned that generally Malaysians will face the risk of losing their savings in the period of 19 years before death with the global life expectancy rising to 77 years and above by year 2050,” EPF said in a statement.
The statement also elaborated that the millennial group in the age group of 26-40 will possibly be facing drastic financial challenges as many of them have difficulty in fulfilling the EPF Basic Savings amounting to RM240, 000.
EPF in the statement also highlighted that the situation will affect the opportunity potentials to increase the savings to RM94, 000 when they retire at the age of 60, and further will become among the demographic groups that are mostly affected.
“The special withdrawal related to the pandemic had caused the drastic drop in the total amount of retirement savings of the EPF members. Till March 2023, 70.5 per cent from 7.2 million members from the formal sectors aged 18-55 have not fulfilled the EPF Basic Savings limit according to the age.
“About 3.1 million or 39 per cent of the members who have made the special withdrawals and aged below 55 as of January 2023 have not started to rebuild their savings. Their savings’ levels remain low with the saving median of RM890.
“The priority of EPF in this issue is to build again the retirement savings and to extend the protection to those outside the current scope of EPF Act 1991,” the statement said.
Meanwhile, the retirement saving funds also stressed that it has always maintained sufficient liquidity to meet all its obligations. The sale and purchase of overseas assets are normal part of EPF’s investment operations as one of its asset allocation strategies, stressing that the move was not for the payment of premature withdrawals.
“There has been a slow but steady increase in the EPF’s overall foreign exposure over the years even during the COVID-10 crisis.
“There is no truth to the speculation that the EPF Act 1991 will be amended to prevent retirees from withdrawing their savings,” the statement said. –Malaysia World News