3.4 mln EPF members make RM8.9 billion Flexible Account withdrawals - Amir Hamzah

KUALA LUMPUR: A total of 3.4 million of the 13.1 million Employees Provident Fund (EPF) members under the age of 55 have made withdrawals from the Flexible Account amounting to RM8.9 billion as of July 19, 2024.

Finance Minister II Datuk Seri Amir Hamzah Azizan said that for the same period, a total of 3.8 million or 29.3 per cent of EPF members chose to have the initial amount in the Flexible Account (Account 3) with a transfer of RM12.6 billion, while RM5.6 billion was transferred to the Retirement Account (Account 1).

He said the transfer to the Retirement Account increased members' savings, with the addition of 43,000 new members having reached the basic savings level.

"Withdrawals from the Flexible Account do not significantly impact the EPF as the expected amount of withdrawals by members is within the EPF's cash and money market allocation.

"Under the current Strategic Asset Allocation, the EPF has allocated investments in cash and money market instruments between two per cent and six per cent of the total investment assets of the EPF," he said in a question and answer session at the Senate today.

He was replying to Senator Anna Bell @ Suzieana Perian question about the percentage of contributors who chose to transfer contributions into the EPF Flexible Account and made withdrawals.

Regarding implications for the national economy, Amir Hamzah said the initial estimate of the Flexible Account withdrawals in the first year is around RM15 billion or about 0.8 per cent of Malaysia's nominal gross domestic product for 2023.

"Nevertheless, the actual impact of the introduction of Flexible Account on the country's GDP growth will depend on several factors, including the members' spending tendencies," he said.

The minister also stressed that the restructuring of EPF accounts is aimed at improving the security of retirement income and giving members access to the Flexible Account at any time and for any purpose, especially for emergencies.

"However, EPF members are advised to use withdrawals for emergencies and urgent needs only," he added.

-- BERNAMA

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