Short-term gains, long-term risks

Money now: Long queues at the EPF office in Seberang Jaya, Penang, after Account 3 was launched. —ZHAFARAN NASIB/The Star

EARLIER this year, the Malaysian government announced a reform of the Employees Provident Fund (EPF) system, introducing Account 3, which allows members to withdraw a portion of their retirement savings. This policy has attracted widespread attention, resulting in long queues at EPF offices nationwide on the launch date. While this reform might stimulate the consumer market in the short term, it poses several risks that could manifest over the next two decades.

Allowing EPF members to withdraw a portion of their retirement savings will help release financial pressures on those facing urgent needs now, such as purchasing necessities, paying for education or covering medical expenses.