Short-term impact on EPF following withdrawals, not long term, says Deputy Finance Minister I

KUALA LUMPUR: There will be a short term impact on the Employees Provident Fund (EPF) following the withdrawal of some RM6.3bil by contributors, says Deputy Finance Minister I Mohd Shahar Abdullah.

“There will surely be some impact as EPF will have to prepare RM6.3bil to facilitate the withdrawals.

“The impact (on EPF) will be short term and not mid or long term,” he said when answering a supplementary question by Datuk Mahfuz Omar (PH-Pokok Sena) in the Dewan Rakyat on Monday (March 21).

To minimise the impact on its funds, he said that EPF would balance its investment portfolios for the purpose.

He noted the withdrawals would help spur the local economy by increasing consumer purchasing power.

Mahfuz also asked if the EPF would be forced to sell off some of its overseas assets to facilitate the RM10,000 withdrawals by some 6.3mil contributors.

Shahar assured that the EPF would manage its funds accordingly to ensure that the savings of its contributors were protected.

Last Wednesday (March 16), Prime Minister Datuk Seri Ismail Sabri Yaakob announced that EPF would allow contributors to withdraw up to RM10,000 from their savings.

This was the latest permitted EPF withdrawal since the Covid-19 pandemic hit Malaysia two years ago.

A total of RM101bil was withdrawn by 7.34 million EPF contributors through the previous i-Lestari, i-Sinar and i-Citra schemes.

Meanwhile, Shahar also rubbished talk of the resignation of Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.

“I had already informed you (Mahfuz) of this outside the House last week and want to state this in the House that he (Zafrul) did not resign and is still working. I hope that you (Mahfuz) will not raise this up again,” Shahar said.

Last Thursday (March 17), Mahfuz took a swipe at Zafrul for not being in the House and delegating his answers to Senator Datuk Idris Ahmad and Shahar.

Mahfuz questioned if the Finance Minister had resigned following the government’s move to allow RM10,000 EPF withdrawals, which Zafrul had voiced earlier concerns about in January.

The Finance Ministry issued a denial of Zafrul’s alleged resignation following a fake resignation letter making its rounds on social media last week.

Earlier, Shahar informed the House that household debts rose to 93.2% in 2020 but reduced to 89% last year.

He said the current household debt was still high compared to 82.6% in 2017, 82% in 2018 and 82.7% in 2019.

However, he said that economic indicators revealed that the country was on the right track to recovery.

He noted that retail and wholesale recorded sales of RM120.6bil in the fourth quarter of last year’s, with total figures for the year hitting RM1.3trillion.

He added that sales in the manufacturing sector also grew by 15.5% last year, recording sales totalling RM1.6 trillion.

He also said that almost RM55bil was recorded for foreign direct investment (FDI), which was higher than the pre-pandemic period.