EPF contributors urged to seek expert advice on RM10,000 withdrawals

KUALA LUMPUR: Employees Provident Fund (EPF) contributors should seek advice from the relevant quarters before deciding to make special withdrawals from their accounts, say economic experts.

Putra Business School economic analyst Associate Prof Dr Ahmed Razman Abdul Latiff said this was to ensure that contributors would make decisions that would not adversely affect them, especially their well-being in retirement.

"The government’s decision to allow a special EPF withdrawal of RM10,000 shows its concern for those who are affected (by the pandemic).

"Although the economy is continuing to recover, certain segments of society are still impacted by the Covid-19 pandemic and the recent flood disaster.

"However, the government must ensure that there is an avenue for contributors to continue getting advice and guidance, for example from the Credit Counselling and Management Agency, so that they would make withdrawals in an optimum manner and would not abuse the scheme,” he told Bernama Wednesday (March 16).

The government has decided to allow EPF contributors to make a special withdrawal of RM10,000 from their accounts to ease the burden of the Malaysian Family members still impacted by the Covid-19 pandemic.

Prime Minister Datuk Seri Ismail Sabri Yaakob said Wednesday that although it was a difficult decision to make, the government had to take this middle-of-the-road approach to strike a balance between contributors’ current pressing needs and their savings for the future.

However, Ismail Sabri urged contributors to consider the matter carefully as the savings were meant for their retirement and that they should only make the withdrawal if they are hard-pressed.

Universiti Tun Abdul Razak (UniRazak) economist Emeritus Professor Dr Barjoyai Bardai said contributors should determine their actual needs before making the withdrawal because it would have a long-term effect on their financial position during retirement.

He said that in Malaysia, 35% of the people lacked knowledge on financial management while the remaining 65% were totally ignorant on the matter.

"There are contributors who feel it is their right to make (EPF) withdrawals without thinking of their future; they think only in the short term. If possible, refrain from withdrawing. But the reality is some groups need the (EPF) money badly.

"Therefore, the government needs to look at this matter more thoroughly, including by making available counselling services, whether formally or informally,” he said.

For private sector worker Mariam Abdul Rahman, 38, the government announcement was a piece of good news as it could help her to settle her housing loan arrears.

"To make matters worse, my husband also lost his job during the movement control order, apart from getting blacklisted,” she said.

The government announcement was also greeted with relief by many who thanked the prime minister on his Facebook page.

Facebook user Hasni Abd Ghani said the government’s move would help to ease the pain of those whose lives have been affected by the pandemic.

"Let’s hope this move will give a new lease of life to people who are in dire straits,” said Hasni.

Monica Leong Peik See was just as exuberant, saying: "Finally, it has happened! Praise the Lord!" - Bernama