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5:45pm 02/03/2022
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Analyst: low EPF savings due to withdrawals during pandemic

PETALING JAYA: Local economic analyst Datuk Chua Tia Guan feels that the pathetically low savings of Employees Provident Fund members could be due to the various withdrawal schemes introduced by the government during the pandemic, including i-Citra, i-Sinar and i-Lestari.

EPF has reported that some six million people or 50% of its members aged below 55 have less than RM10,000 in their accounts.

Chua, who is Tax & Financial Adviser of Asia Business Centre, told Sin Chew Daily in a telephone interview that from what he knew, EPF members’ deposits are polarized.

“One group is what EPF chief executive officer Datuk Seri Amir Hamzah Azizan has referred to as members with very low savings, while another group is members with very high savings in their accounts, some exceeding RM1 million.

“For those with very low savings, their deposits have been drastically reduced due to withdrawals through various schemes such as i-Citra, i-Sinar and i-Lestari during the pandemic.

To relieve the financial burden of Malaysians, the government introduced the i-Lestari and i-Sinar schemes in 2020, allowing members to withdraw RM500 a month for 12 months, and RM10,000 respectively.

The government subsequently launched the i-Citra scheme in 2021 to allow members to withdraw up to RM5,000 for emergency use.

Chua advised EPF members with less than RM10,000 in their accounts to put back the money they have withdrawn into their EPF accounts as soon as possible over the next few years, as EPF savings are meant for their future retirement.

He also said the 6.1% dividend rate announced by EPF for 2021 was a “very good” one.

“It is not easy to find an investment with 6.1% returns in the market!”

He urged EPF members who do not know how to invest to put their money in EPF, given the fact banks offer only 1.5-2.5% fixed deposit rates.

“Unless you can find an investment offering better returns, I would suggest that you keep your money in EPF.

“EPF savings could be one of the most stable investments in your investment portfolio.”

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