FORTY-SIX per cent of Employees Provident Fund (EPF) contributors below the age of 55 have less than RM10,000 in their accounts, the retirement fund said today.

This involves some 5.8 million contributors, it said, adding that the data was as of August 31.

Of these contributors, 19% had less than RM1,000 while 18% had between RM1,000 and RM5,000 as their retirement funds.

Another 9% had between RM5,000 and RM10,000, EPF said in a chart on members’ inadequacy of retirement income, which it released in a press statement today.

Since the Covid-19 epidemic struck last year, the government has allowed EPF contributors whose income was affected by lockdowns to withdraw a portion of their retirement funds through the i-Sinar and i-Lestari schemes. 

Former EPF chief executive officer Tunku Alizakri Raja Muhammad Alias warned previously that this would jeopardise contributors’ future retirement funds.

In June, the government introduced the i-Citra scheme under the Pemulih economic stimulus plan for EPF contributors below the age of 55. 

It allows them to withdraw up to RM5,000 from Accounts 1 and 2 and subject to the amount in these accounts. Disbursements are made over a period of five months at a fixed sum of RM1,000 per month, subject to savings balance.

Current EPF chief executive officer Amir Hamzah Azizan said in a statement today that withdrawals through the i-Sinar and i-Citra schemes have involved a total disbursement of RM67.6 billion.

Five million contributors have applied for the i-Citra facility and RM20.8 billion has been approved for withdrawal, with RM9.1 billion disbursed to date.

Under i-Sinar, 6.6 million EPF contributors applied and RM58.5 billion has been disbursed.

Noting the number of contributors below the age of 55 who have less than RM10,000 in their EPF accounts, Amir said there has been a significant drop in members who meet the basic savings threshold of RM240,000 as retirement savings at age 55.

“The drop from 36% to 27% (is) pursuant to the Covid-19-related withdrawals to supplement their income during the crisis,” he said.

Amir said there will be “far-reaching consequences” for these EPF contributors and also on the government.

The key element of the EPF’s strategy going forward is to get the gig workers as well as those in the informal sectors into the EPF scheme so they can start to save as early as possible and plan for their retirement,” he added. – September 24, 2021.