PUTRAJAYA’S announcement that Employees’ Provident Fund (EPF) contributors can now withdraw RM5,000 from their retirement funds under the i-Citra scheme has drawn mixed reactions.

Some told The Malaysian Insight that they are happy to apply for the withdrawal facility to keep afloat financially, while others said they would prefer to preserve their savings for their golden years.

On June 28, Prime Minister Muhyiddin Yassin announced that the EPF would introduce the i-Citra scheme to allow Malaysians to have more money in their pockets in facing the hardship caused by the Covid-19 pandemic.

Application for this scheme will open on July 15, and the first disbursement is expected to be credited into members’ accounts in August. i-Citra is expected to channel some RM30 billion to the rakyat.

Natasya Erwanty Mohd Amin, 30, said she would be applying for the i-Citra scheme, after having applied both the i-Lestari and i-Sinar withdrawal programmes. These were schemes approved earlier for members to withdraw their EPF savings.

The former project coordinator for a multimedia company said that she prefers to dip into her funds instead of seeking government aid.

“If you wait for government aid, the assistance is one-time, but as for the EPF scheme, the funds come in stages over several months.

“I am aware that I am using my own money. But what option do I have? I can’t borrow money from loan sharks. That would put me in more trouble,” she said.

Meanwhile, 27-year-old Fahmi Othman, who is currently out of job due to the pandemic, mirrored Natasya’s view.

The former landscape designer said the pandemic had left him with no choice but to apply for the scheme.

“I am jobless, I have used my savings and I had to use my EPF money to survive. Of course I could ask from my parents but they too are having financial issues.

“I do not want to burden them. I chose to withdraw from my EPF savings because it is my own money. I will have to work harder once I get a job to replenish the funds I have used,” he said.

Fahmi added that the government’s one-off aid would never be enough.

“If they give you RM500, for instance, how long will it last? In less than a week, you’d probably used all the money. Things are not cheap these days,” he said.

Ooi Wei Beng, an electrical engineer from Selangor, also said he would apply for i-Citra, just as he did for i-Lestari and i-Sinar.

Ooi said that he could always return the unused funds to EPF.

“I’m building a bigger rainy-day fund in order to change jobs, perhaps I might decide to relocate.

“If I don’t use the cash withdrawn from i-Citra, I could still channel it back into EPF via personal contributions,” the 26-year-old said.

Ooi added that he would probably use the funds to invest in the stock market or in trust funds.

“I took out i-Sinar to buy things, get a new car, while the i-Lestari funds were used to buy furnishing for my new house.

“I’m planning to apply for i-Citra too. I’d probably dump it into stocks or into ASNB (Amanah Saham Nasional Berhad),” he said.

‘Before i-Citra, the government introduced two other initiatives to allow contributors to withdraw funds from EPF, known as i-Lestari and i-Sinar.

The i-Lestari programme allows for withdrawals of up to RM500 a month from Account 2, while i-Sinar is the extension of the i-Lestari programme where members can withdraw up to RM10,000.

Finance Minister Tengku Zafrul Tengku Abdul Aziz said as of March 14, i-Sinar withdrawals amounting to RM52.48 billion had been approved for 5.94 million applicants.

He said of that amount, a total of RM32.74 billion had been credited to contributors.

‘My EPF savings is all I have’

Although the government allowed contributors to tap into their retirement funds, some are against it.

Eugene Ng, an accounts executive from Shah Alam, said he applied to withdraw funds in the last round as he had lost his job then.’

However, he said that he will not applying for i-Citra this time around, as he is concerned about withdrawing his retirement funds.

“I did take out a sum to support myself when I lost my job in November.

“I’m not applying for the new i-Citra scheme because I’ve already found myself a job and I’m sort of worried about withdrawing my pension savings. I believe the amount I’ve taken out won’t set me back significantly if I manage it well,” he said.

Ng said he would rather that the government provide cash aid instead of giving contributors the option to withdraw from their retirement funds.

“The government should be providing assistance to those who are facing challenges as we have been paying our taxes.

“I think that the government encouraging us to withdraw from our own EPF accounts makes us wonder about the state of our country’s finances or the motivation behind those in power,” he said.

M. Jeyshree, 51, from Kuala Lumpur also decided against dipping into her retirement funds.

Having applied for the previous i-Sinar programme, she said making further withdrawals from the fund will see her savings diminishing.

“I don’t think it is a good idea to continuously withdraw from our EPF savings. Although it is a small amount, I prefer not to touch it anymore,” the clerk at a private company said.

Jeyshree, who is also her family’s sole breadwinner, said the funds were her only savings for after retirement.

“I need to keep the money because I don’t have medical insurance and I also need to use some of the money to pay for my daughter’s education.

“If I keep withdrawing, I won’t have enough for later,” she said.

Another contributor, who only wanted to be known as Naidu, 50, also said he would not touch his retirement savings further, after making enough withdrawals in the previous round.

Naidu, who lost his high-paying aviation job abroad during the pandemic, said he does not have much funds to withdraw.

Despite finding a new job that pays about 15% of his previous salary, Naidu said he had sold most of his assets and restructured his finances.

“The last time I withdrew the maximum amount allowed from i-Sinar. I still have some of that money in my savings for emergency use.

“I don’t have much in my EPF savings to keep withdrawing from. All the funds in my EPF were from the times I was working here before I went abroad and the yearly dividends added up to what I have now.

“I was lucky because I managed to finish paying my house loans while I was working abroad but I had to sell my cars and get myself a smaller one; something I could afford with my new salary.

“After restructuring my finances, I don’t have many commitments. So, I won’t be withdrawing this time,” the former aircraft engineer said.

Naidu said he appreciates the effort taken by the government to give continuous aid for citizens during the pandemic but said they should come up with long-term aid plans rather than one-off handouts.

He said the government must not consider EPF withdrawals and loan moratorium as aid from them.

“If the government could give a monthly Bantuan Prihatin of RM500 to all B40 and M40 families, that would help.

“They could give half in the form of groceries vouchers and the other half as monetary aid. This would definitely help.

“But EPF funds are ours. Loan moratorium is not interest-free and we still have to pay interest. So, this cannot be considered as aid from the government.

“If the government makes the moratorium interest-free, then it is something,” he said.

According to EPF, the i-Citra initiative is designed for members to withdraw their savings primarily from Account 2.

Prior to the Covid-19 pandemic, Malaysians who needed to withdraw money from their EPF before retirement could only do so from their Account 2 savings for the purpose of buying or fixing a home, for medical emergencies or to finance a child’s education.

Until the retirement age of 60, Account 1 was off-limits to contributors, functioning like a fixed deposit account that received yearly dividends. – July 3, 2021.