ICYMI, Prime Minister Muyihiddin Yassin announced last Monday that those below 55 years old can withdraw up to RM500 from the Employees Provident Fund (EPF) starting 1 April 2020. Out of the RM161.3 billion economic stimulus package announced recently, RM53.1 billion is from EPF (source: Malay Mail).
EPF membership is mandatory for Malaysian citizens employed in government and private sectors, it’s a saving plan for your future-old-self.
It is estimated that about 40% of active EPF contributors do not even have enough savings in their Account 2 to be able to benefit fully from this programme named i-Lestari. So, this initiative is essentially a drawdown of old-age savings. It seems logical to dip into this pool now, but what about the long term effects since many Malaysians do not have much to begin with?
As for small business owners or the self-employed, for example, your neighbourhood artiste or your fav Makcik-jual-karipap – this option is not even available for them. Ironically, they’re the ones who are really in need of financial aid.
This i-Lestari programme is offered to help ease financial burdens during the Covid-19 pandemic and MCO but so far, many have voiced out their concerns over the programme.
Check out what some Malaysians have to say:
The government is basically saying to all Malaysians:
“You’re on your own, folks.
If you don’t have EPF or savings, then that’s your problem, not ours.”
IOW, we have been left to fend for ourselves.
— Mikhail Hafiz (@IMMikhailHafiz) March 23, 2020
Epf is your own money. So the govt basically says. Here have your own money now.
— 🇲🇾 Encik Khalid (@_Acat_) March 23, 2020
It’s an illusion. Basically telling you go use yr own retirement savings to sustain yrself. The RM40bil is unreal as you don’t know how many ppl will take that option. Some daily wage earners hv no EPF account https://t.co/5kt4lE14db
— pankajkumar (@happypankaj) March 23, 2020
I’m no economist & yes there’s finite resources, but surely d Gov can do better than allowing EPF withdrawals (our own money) – after 6 days since MCO?
Isn’t that y we tapped a technocrat ex-banker as MOF? To inject creative clever policies, not something mundane like this?
— Lim Wei Jiet 🇲🇾 (@limweijiet) March 23, 2020
The bottom 40% of active members in EPF have about RM9k savings (both acc 1 & 2). Assuming account 2 is 30% of total, this translates to less than RM3k. Which means they have less than 6 months to survive on RM500 only…. And this excludes those w/o EPF… https://t.co/IBYpEelCpF
— Adam Firouz (@AdamFirouz) March 23, 2020
IMO, on EPF
1. Be careful. Jangan haphazardly w/draw. Even before this, EPF is found to be NOT enough for retirement. Habis dlm tempoh ave 2-3yrs dr retirement.
But I understand how this is a time of need. Just be careful. W/draw IF really crucial https://t.co/G7q5OIRgZx
— Rejaie Arbee #GirlsNotBrides 🇲🇾💞 (@rejaie) March 23, 2020
Kenapa Kerajaan minta rakyat guna simpanan KWSP mereka untuk tangani Covid-19?
Sepatutnya Kerajaan beri rakyat RM500 sebulan ini, bukan rakyat kena keluar duit hari tua melalui KWSP.
Golongan B40 dah la duit KWSP tak banyak, lagi pula sekarang kena keluar duit lagi.
— Syahredzan Johan (@syahredzan) March 23, 2020
Kaum petani & self employed ada EPF ke?
The people who needs help most ie the most vulnerable group in the society may not have EPF.
— Khalid Karim Brother can you spare me a dime (@khalidkarim) March 23, 2020
We’ve students, disabled individuals, SME businessmen coming in to ask for monetary help.
Sickly parents, can’t pay rent, laid off from work & more.#Covid19 is really taking on a toll on them but our gov thinks enabling EPF access is enough.
Please donate, I beg of you. pic.twitter.com/fBAi2LjmHt
— fir redzuan (@FirzanaRedzuan) March 23, 2020
Sure, allowing access to EPF funds is a stop-gap until a comprehensive stimulus plan is released later this month.
But this is all too little, too slow & the vulnerable don’t even have (much) money in their EPF to be withdrawn anyway! This is a thoroughly inadequate response.
— Mifzal Mohammed (@mifzalmohd) March 23, 2020
basically when the gov tells us to take money from our retirement savings during this time of plague, they are saying this is a you thing. u ada ramai orang to feed? tu bukan salah kami. u kena jaga ahli keluarga sakit? not our problem. ambil je dari simpanan kamu.
— bread nad✊🏽 (@khaleesinadya) March 23, 2020
Pleading YB @MuhyiddinYassin and Senotar @tzafrul_aziz @MOFmalaysia to take consider on those working wholly depending on the daily wages/income. Hopefully some initiatives/benefits will be channelled to them apart from KWSP idea or any existing schemes that announced recently. https://t.co/e8TaiHzrIk
— Vimal Vivekanandah (@veemsbuzz) March 25, 2020
Besides Twitterjaya, The Star reported that entrepreneur Fanny Wong, 39, said the initiative would bring more harm than good in the long run as the public may not have enough savings to support themselves when they retire.
“I think it is better for the government to give financial aid to those with low income instead of asking them to take out money from their savings… Some may not even have much in their savings now,” she said.
In a Malay Mail opinion-report regarding this initiative, Deputy Director of Research at Khazanah Research Institute (KRI), Christopher Choong stated that “In these pressing times, we have to respond to short-term shocks, but we cannot be short-term in thinking.
“We cannot afford to keep dipping into social protection funds to compensate for the lack of fiscal spending. Expanding fiscal resources has to be our next step forward,” he said.
For now, PM Muhyiddin has said that a more comprehensive economic stimulus package and further aid for Malaysians may be announced on March 30. So hopefully, there’s something for everyone besides taking out money from yourself as we go through this time of crisis.
Proof cyberbullying works https://t.co/9KGf3Ug4gg
— Izzah. (@theonlyizzah) March 26, 2020
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