Balanced approach to EPF withdrawal reforms: Financial literacy & freedom of choice must be prioritised

MCA notes the proposal under the 13th Malaysia Plan (RMK13) to restructure Employees Provident Fund (EPF) withdrawals into a monthly pension-style system for retirees. While the aim of this proposal is to ensure that retirees do not exhaust their savings prematurely and thereby safeguard their long-term financial security, particularly in light of the rising cost of living and increasing life expectancy, such a policy however, if implemented universally, should not be unilaterally imposed on existing contributors and must be approached with caution, particularly if it will be a policy applicable to new contributors.

A mandatory monthly pension mechanism may unintentionally disadvantage contributors who have immediate financial needs upon retirement.