MALAYSIANS who withdrew from their Employees’ Provident Fund (EPF) savings during the Covid-19 pandemic will have to work an additional four to six years to replenish their retirement fund, said the Ministry of Finance (MOF).

“EPF withdrawals during the epidemic have reduced the percentage of those who have achieved minimum retirement savings (estimated at RM240,000) from 36% in 2020 to 27% this year,” the MOF said in a written reply to Parliament yesterday.

MOF said although the i-Lestari, i-Sinar and i-Citra withdrawal schemes had given some relief to depositors, it had reduced their retirement funds significantly.

“As an example, 73% of the depositors are now in a serious situation where their funds are not enough for them to retire above the poverty line,” it said.

According to the ministry, the most affected group is the Bumiputera as 78% of them had applied to withdraw from their EPF fund.

“As a result, 4.4 million or 54% of Bumiputeras now have less than RM10,000 while another two million or 25% have less than RM1,000.”

MOF added that the withdrawal schemes has also lowered the retirement funds for all except the Top-20 group.

“The bottom 40% or five million depositors saw a drop of 38% in their savings to RM8 billion, making their savings median RM1,005 while the mid 40% saw their savings drop by 18% to RM155 billion (savings median RM24,995).

“The top 20% (below 55 years of age) were the only group that saw their savings median increase to RM152,043 or RM633 per month for 20 years,” said MOF.

According to the ministry, although 70% of depositors between the ages of 45 and 59 have more than RM50,000, this is not enough for retirement.

“As a general rule, RM50,000 is only enough to give RM200 per month for 20 years or RM1,000 per month for four years. As this group only has 15 years to retirement, it will be hard for them to build up sufficient retirement savings,” the ministry said.

MOF was responding to Wan Azizah Wan Ismail (Pandan-PH) who asked the government to compare the state of the depositors’ retirement funds in 2019 and 2021.

The i-Lestari, i-Sinar and i-Citra schemes were introduced by the Perikatan Nasional government led by Muhyiddin Yassin to help Malaysians cope with the effects of the Covid-19 epidemic.

According to MOF, the three schemes saw depositors withdraw RM101 billion which caused 6.1 million depositors to have less than RM10,000 in their retirement savings fund. – November 16, 2021.