KUALA LUMPUR, July 25 — A total of 3.4 million of 13.1 million Employees Provident Fund (EPF) members aged below 55 have withdrawn RM8.9 billion from their flexible accounts as of July 19.
Finance Minister II Datuk Seri Amir Hamzah Azizan said that in the same period, 3.8 million, or 29.3 per cent, of EPF members chose to save the initial amount in the flexible account (Account 3), with a transfer of RM12.6 billion, while RM5.6 billion was transferred to the retirement account (Account 1).
He said retirement account transfers have increased members’ savings, with the addition of 43,000 new members having reached the basic savings level.
“Withdrawals from the flexible account do not significantly impact the EPF as the expected amount of withdrawals by members is within the EPF’s cash and money market allocation.
“Under the current Strategic Asset Allocation, the EPF has allocated investments in cash and money market instruments between 2 and 6 per cent of EPF’s total investment assets,” he said in a question-and-answer session at the Senate today.
He was replying to Senator Anna Bell @ Suzieana Perian’s question about the percentage of contributors who chose to transfer contributions into the EPF Account 3 and made withdrawals.
Regarding implications for the national economy, Amir Hamzah said the initial estimate of Account 3 withdrawals in the first year was around RM15 billion, or about 0.8 per cent, of Malaysia’s nominal gross domestic product (GDP) for 2023.
“Nevertheless, the actual impact of the introduction of the flexible account on the country’s GDP growth will depend on several factors, including the members’ spending tendencies,” he said.
The minister stressed that the restructuring of EPF accounts is aimed at improving the security of retirement income and giving members access to Account 3 at any time and for any purpose, especially for emergencies.
“However, EPF members are advised to use withdrawals for emergencies only,” he added.
— Bernama
