Wait for 2021 Budget, may not be necessary to withdraw EPF money - PM

KUALA LUMPUR: The government is willing to study the proposal to allow the withdrawal of the Employees Provident Fund (EPF) from Account One to help the people who are in distress and who are really in need.

Prime Minister Tan Sri Muhyiddin Yassin said the matter has been discussed by him with the Minister of Finance, Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

As a responsible government, Muhyiddin acknowledged the need to balance the short-term needs of individuals affected by the long-term future and retirement savings needs.

"We basically agree and are willing to study suggestions on how we can help people who are in trouble and those who are really in need.

"Whether these people can be allowed to withdraw the allocation from Account One - which we usually know is for the long term when they are old or when they have no money anymore.

"So, our initial reaction is as much as possible, do not touch the money.

"Yes, they are facing a very difficult situation, that is why in the Budget, if we wait, there may be grants and assistance provided by the government.

"If that is considered sufficient, there is no need to withdraw the money that has been saved (EPF Account One)," he said in a virtual Pre-Budget 2021 Special Interview session with the media today.

Muhyiddin explained that the government has implemented flexibility in relation to the EPF, in particular allowing employees' contributions to be reduced from 11 percent to 7 percent and also i-Lestari which allows withdrawals from Account 2 of RM6,000 per person.

"Almost 70 per cent of EPF members choose to reduce their employee contributions from 11 per cent to 7 per cent which now contributes to increasing disposable income by almost RM700 million a month.

"At the same time, more than 30 per cent of EPF members have EPF savings of less than RM5,000 and thus, EPF savings do not necessarily address the EPF contributor’s cash flow problem," he said.