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Withdrawal from EPF account 1 should be last resort – MYC

Kuala Lumpur – The limited and selected withdrawal of money from Account 1 of the Employees Provident Fund (EPF) should only be used as a last resort for those who do not receive any financial aid and have run out of savings in Account 2, said Malaysian Youth Council (MYC) president Jufitri Joha.

This, he said, was because those who withdraw from their EPF Account 1 contributions could find themselves being very poor when they retire due to a lack of savings.

“As we know, 71 per cent of EPF contributors have savings of less than RM50,000, with the minimum amount required to retire at the age of 55 being RM240,000.

“These statistics are facts that cannot be denied. If there is a fourth or fifth wave of COVID-19, the MYC is worried that the amount of EPF savings among low-income members will continue to decline sharply, resulting in them having no more savings despite their years or decades of working,” he said in a statement yesterday.

The MYC, meanwhile, gave three proposals for Budget 2021, with the first being to enhance social protection efforts to protect workers in the formal and informal sectors through the ‘Social Protection Floor’ which could immediately be undertaken by the Social Protection Council (MySPC).

The other suggestions are to continue the aid package to the affected B40 and M40 groups for six more months; as well as to extend the withdrawal of the i-Lestari Account 2 and increase the withdrawal amount if the applicant is still unemployed.

“These proposals are also to prevent the people from withdrawing from their EPF Account 1 contribution and to protect their savings,” he said, adding that it was the government’s main responsibility to help improve the social protection of those who are currently affected.

The MYC hoped that these alternative proposals would help the government protect the people’s EPF Account 1 contribution and ensure their future well-being.

Last week, several parties proposed that the EPF should allow contributors to make a one-off withdrawal of up to RM10,000 from their Account 1 to help ease their financial burden due to the pandemic.

Last Friday, Prime Minister Tan Sri Muhyiddin Yassin said that accessing EPF members’ Account 1 savings to address the daily challenges caused by COVID-19 could cause larger problems in the future. – Bernama

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