The Employees Provident Fund (EPF) recently announced the disbursement of a RM708 million government additional contribution incentive to its 1.4 million members aged between 40 and under 55. The incentive was allocated to individuals with EPF savings of RM10,000 and below in their Account 1 as of Feb 24, 2023.
Source: https://ms.wikipedia.org
The one-off RM500 contribution incentive seeks to encourage EPF members with low savings and nearing retirement age to continue to save and accelerate the accumulation of their retirement savings.
If the RM500 stays for 20 years and dividend is at 5% p.a., the money may grow to over RM1,300. Is this enough to retire? Isn’t this just a populist move?
And the Government pumps in RM500 for each account of the 1.4 million members, hoping they will accelerate their savings with this incentive! Don’t get that? They will be encouraged to wait for another pump-in next year and the year after that and so on. Each year more than the previous year. How can they be responsible savers?
The issue of insufficient savings in EPF is a serious matter. Over 6.3 million members under 55 – or about 48% of total members have less than RM10,000 in their accounts up to September 2023. This requires a holistic, comprehensive work by MOF, EPF, employers, employees, not a piecemeal, populist step!
Reference:
EPF pays out RM708m govt additional contribution to 1.4m members, Malaysiakini, 10 January 2024
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