No steps taken to raise EPF withdrawal age from 55 following World Bank's suggestion, says fund

PETALING JAYA: There have been no steps taken to raise the current full withdrawal age of 55, says the Employees Provident Fund (EPF).

Its corporate affairs department said that it took note of the World Bank’s suggestion to gradually raise the age when members can make full withdrawals of Accounts 1 and 2 of their EPF retirement savings from 55 to 65.

"The EPF assures members that no such steps on raising the withdrawal age have been discussed with any party at this point in time," it said on Friday (June 26).

The fund stresses that it approaches major policies concerning members in a very prudent manner, including conducting in-depth studies and engagement with its members and key stakeholders.

"This is to ensure that members' well-being is always at the forefront in carrying out the EPF’s mandate," said EPF.

It was reported that the World Bank has suggested some short, medium and long-term policy recommendations in the area of publicly financed social assistance and contributory social insurance that should support Covid-19 recovery efforts and the development of an enhanced social protection system.

The World Bank recommended that the government strengthen the adequacy of old-age income protection by gradually increasing the minimum withdrawal age for EPF Account 1 balances to 65; convert contributions to EPF Account 2 to retirement savings; mandate a phased withdrawal for EPF balances; and improve social assistance for older persons through a modest, broadly targeted social pension.

For long-term policies, it suggested the government further strengthen the coverage and adequacy of old-age income protection by unifying registration requirements and contribution collection for the EPF, Social Security Organisation, and Human Resources Development Fund.

It also proposed to further increase the EPF minimum withdrawal age with increased life expectancy; consider lowering EPF contribution rates and capping covered wages subject to mandatory contributions; offer age-based portfolios, longevity insurance, and annuitization options; and further improve social assistance for older persons through higher coverage or adequacy of social pensions in line with fiscal space.