THE government is finalising the Account 2 support facility for Employees Provident Fund (EPF) members to obtain cash resources without having to withdraw from their savings.

The Finance Ministry (MOF) said in a statement today that the initiative will provide facilities for EPF members to use their savings balance in Account 2 as a back-up to obtain financing from banks.

“This initiative will not burden the people as the interest rate (conventional) or profit rate (Islamic) that will be charged by the banking institutions involved in this initiative is expected to be 4-5% per annum.

“This rate is significantly lower than the current market rate of personal financing from banking institutions charged at 8-15%,” it said.

The initiative is also said to not contradict section 51 of the EPF Act 1991 as the savings balance in Account 2 is only used as a back-up through withdrawals at retirement age.

“This is in line with the EPF’s investment objective as a long-term retirement fund to hedge and increase the value of members’ savings through the declaration of a stable and sustainable dividend rate,” it said.

The MOF said that the government would not consider any additional withdrawals from the EPF savings.

“In fact, based on the Organisation for Economic Cooperation and Development, all countries that had allowed contributors to withdraw part of their retirement funds during the pandemic stopped the facility for early withdrawal from retirement funds in 2021,” it said. – Bernama, March 21, 2023.