More than 40 percent Employees' Provident Fund (EPF) contributors reportedly have only about RM5,000 or less, in their Account 1.

Finance Minister Tengku Zafrul Aziz said that 32 percent contributors only have about RM1,000 or less, in their Account 1, while about 10 percent have around RM5,000, or less, in their Account 1.

"This is a structural issue which needs to be resolved because social safety nets are important, the government has to think in the medium and long term," he reportedly said during an interview on TV3 last night, according to Free Malaysia Today (FMT).

The government recently allowed those who lost their jobs during the COVID-19 pandemic to withdraw RM500 a month, for a maximum of 12 months, from the Account 1 of their EPF savings, from January next year.

According to Tengku Zafrul, following calls for more to be included in the withdrawal scheme, the government, as well as the EPF, have agreed to increase the number of people allowed to withdraw their money from Account 1. An announcement on this is expected to be made later today.

There have been mixed reactions to allowing EPF contributors to withdraw part of their retirement savings.

Certain groups said it is important to allow contributors who have been badly affected by loss of jobs or pay cuts during the pandemic to withdraw part of their EPF funds, so that they can stay afloat amid the pandemic.

Others, however, opined that allowing the withdrawal would cause employees to face economic hardship upon retirement, due to dwindling savings.

Source: FMT
Photo source: Astro Awani