Only 3 pct of Malaysians can afford their retirement, says EPF

KUALA LUMPUR: The COVID-related withdrawals over the past two years have had a massive impact on the savings of Employees Provident Fund (EPF) contributors, as currently, only three per cent of contributors can afford their retirement.

EPF chief strategy officer Nurhisham Hussein said the COVID-related withdrawals, namely i-Sinar, i-Lestari and i-Citra, resulted in many members below age 55 having critically low EPF savings.

"Even with COVID-19, 80 per cent of Malaysian men and 90 per cent of Malaysian women will reach age 60, while one out of three men and two out of three women will reach age 80.

"We now estimate that only three per cent of Malaysians can afford to retire," he said at the Perdana Fellow Alumni Association Speaker Series webinar today.

Nurhisham was one of the panellists at the webinar, titled 'Healthcare in Focus'.

In his presentation, Nurhisham said by the end of this year, 54 per cent of EPF members aged 54 would have less than RM50,000 in their savings account, noting that a majority of those who withdrew their entire EPF savings upon reaching age 55 would use it up within two to three years.

He noted that the withdrawals were allowed due to the extraordinary circumstances.

"We are very sympathetic to the plight of our members and hope that the (withdrawals) had achieved the intended purpose of helping them financially.

"(Moving forward,) the reopening of the economy and the measures announced in Budget 2022 should help relieve the pressure on our members," he said.

Commenting on the consequences should another round of withdrawal be permitted, he said those who had withdrawn from their EPF savings would now need to work an extra four to six years just to cover the amount that they withdrew over the past two years.

Since it is unlikely that the retirement age will be raised, they would not have enough for their retirement, he said.

-- BERNAMA