Relief at the expense of EPF savers

ON March 23, Prime Minister Tan Sri Muhyiddin Yassin announced plans by the Economic Action Council (EAC) to allow members of the Employees Provident Fund (EPF) to withdraw up to RM500 per month for 12 months from their savings under Account 2 as a source of emergency funding during the Covid-19 crisis. The move is ill-advised as it merely provides short-term relief while leaving long-term ramifications to the country due to insufficient savings when these members retire.

While it is acknowledged that withdrawals can only be made from Account 2, nevertheless there would be a high number of EPF members who may have already withdrawn from this account for housing, education and medical needs. And even if withdrawing from Account 2 is possible, it would only be effective as a form of short-term relief at the savers’ expense.