Is EPF Savings Low and Worrying?

The impact of the Covid-19-related withdrawal programmes on the Employees Provident Fund (EPF) members' savings is estimated at RM155 billion. This was told by the Deputy Finance Minister 1 to the Dewan Negara recently. Of this, RM145 billion was withdrawn by members under the four withdrawal programmes and almost RM10 billion was from the impact of the reduction of the employees’ share statutory contribution rate.

As of June 30, a total of 6.62 million members or 52 percent of the total of 12.78 million EPF members aged under 55 had savings of less than RM10,000. Of that total, 4.99 million members or 75 percent were bumiputera. About 3.2 million members under the age of 55, have a very critical savings level of less than RM1,000, and 2.58 million members or 81 percent of them are bumiputera. Bumiputera members make up 64 percent or 8.22 million of the total 12.78 million members of the retirement fund aged below 55.  Then there is PNB which is largely for Bumiputera. So the savings position of Bumiputera is not reflected fully.

BNM could give a better picture of savings held by Malaysians after gathering information from EPF and PNB. Then it may not be that critical! Nevertheless, “bailout” of Bumiputera savings may be popular politically but not feasible for other reasons. Wage review, productivity, retirement age extension are some other measures that may need some serious focus.

References:

EPF savings low and worrying, MOF says after withdrawal schemes, Malaysiakini, 8 August 2022

EPF members’ savings worrying after RM145 bil withdrawals – MOF, Shazni Ong, TheEdge CEO Morning Brief, 9 August 2022