Floods: Victims need not dip into EPF savings, govt providing sufficient cash assistance, says Tengku Zafrul

PETALING JAYA: EPF contributors who are affected by the floods need not dip into their retirement savings as the government has provided sufficient cash assistance, says Tengku Datuk Seri Zafrul Tengku Abdul Aziz (pic).

The Finance Minister said, in a statement Friday (31 Dec), that apart from the Bantuan Prihatin Rakyat (BPR), Covid-19 Special Assistance (BKC) and Bantuan Prihatin Rakyat (BPR), the government is allocating cash assistance of up to RM10,000 for each household affected by the floods and up to RM61,000 for those who suffered total destruction.

He said the government was taking an approach of not allowing EPF withdrawals due to the floods, similar to when the country was hit by severe floods in 2014 and EPF withdrawals were not allowed.

“With this measure, contributors do not have to worry about their EPF savings and dividends,” he said in a Facebook post Friday.

Tengku Zafrul added that more EPF withdrawals will burden the future generations as they would need to care for the elderly.

He said almost RM101bil has been disbursed through i-Lestari, i-Sinar and i-Citra, with members allowed to withdraw savings of up to RM71,000 to cushion the impact of the Covid-19 pandemic on the people.

He noted that almost 50% or six million contributors have a contribution balance of less than RM10,000, with 74% of them being from the Bumiputera group.

“More worryingly 79% have less than RM1,000 in their accounts,” he said, adding that retirees needed RM240,000 to retire for 20 years with RM1,000 per month and with lower savings, members cannot retire safely. ⠀⠀

He said additional withdrawals will increase the number of contributors who have less than RM10,000 savings to almost seven million and it will also force EPF to dispose of investments, thus reducing member’s dividends.

“This will create a ripple effect on the country’s bond and stock markets, resulting in a collapse of domestic and foreign investor confidence,” he said.

He noted that there is RM270bil that can be withdrawn by members over the age of 55 who are no longer subject to withdrawal conditions.

“If they doubt the direction of the EPF, savings can be withdrawn at any time but this will force the disposal of more EPF investments, and continue to lower the value of members’ dividends,” he said.