Sabah among states with least amount of EPF account holders, says regional director

KOTA KINABALU: Sabah has among the lowest number of Employees Provident Fund (EPF) account holders in the country, says EPF regional director for Sabah Mohd Fadil Sarehan.

This is due to low financial literacy, wrong perception of EPF, geographical and infrastructural challenges as well other factors, he said during an engagement session with media practitioners here, Wednesday (July 17).

He said with an over 1.8 million workforce in the state, only some 958,197 have savings with the EPF as of 2024.

“This number increased from 852,115 in 2020, but still, statistically, Sabah ranks among the lowest in the country,” said Fadil.

He said this is worrying because this shows that people are not concerned about their retirement plans.

He said in actual fact, many Sabahans, especially those in the interior parts of the state, actually have cash in hand, which means they have the money but it is not saved in any financial institutions.

“It is because of the constraints mentioned above that maybe, many of them do not keep this cash in the banks,” Fadil said.

He said it was vital that a proper retirement fund be set aside because it would save the person a lot of financial constraints in future.

He said as per data for this year, EPF account holders with less than RM5,000 in savings make up about 36% of the overall number while 18% are those with between RM5,000 and RM10,000 in savings.

Some 27% are those with between RM10,000 and RM50,000 in EPF savings, while 11% are those with up to RM500,000 saved and the 1% are those with half a million ringgit in savings and above, said Fadil.

With this, it was important that local leaders including assemblymen play their roles in disseminating information and government policies, including getting more people to sign up for EPF, he said.

“When I say EPF, what comes to your mind? It should be savings and retirement plan. Not withdrawal of money,” he said.

Fadil said people must change their perception of savings and opening up accounts with EPF, because EPF is among the safest platforms to keep and raise money.

“Did you know that EPF is the only platform where no one else apart from the account holder and their beneficiaries can touch the money? Not even the insolvency department can have any hold on the savings with EPF,” he said.

He said for EPF also has mobile offices and outreach programmes to create more awareness on the benefits of saving in EPF.

Fadil said everyone can open up accounts, from people with fixed income to self-employed individuals, children, housewives and even government employees.

With the many new schemes such as I-Suri and others, there are many options available that cater to the varying needs of individuals, he said.

Those in the workforce who already have a continuous running of EPF can also opt to increase their savings, from their salaries as well as from the contributions of their employers, he said.

“Of course if you want more contributions from your employers, you need to negotiate on your own terms,” Fadil said.