Malaysia’s Employees Provident Fund Saturday said over a third of the national defined contribution system’s more than 14 million members has taken advantage of the EPF’s latest hardship withdrawal facility, applying to take out a combined 40.1 billion ringgit ($9.4 billion) in retirement savings.
The fourth special withdrawal facility offered up to members over the two years since the COVID-19 pandemic first hammered Malaysia’s economy will bring the combined leakage from the 1.01 trillion ringgit, Kuala Lumpur-based fund to more than 140 billion ringgit, or 14% of the current total.
An EPF news release said 5.3 million members applied for hardship withdrawals over the two weeks since the latest facility first opened on April 1. The program will close to further withdrawals on April 30.
The news release said 44% of the 11.95 million EPF members eligible to make withdrawals under the new facility did so.
Earlier this year, EPF executives, who had previously accommodated government calls to allow Malaysians facing economic hardship to tap their retirement savings, became more public in expressing concerns that continued withdrawals could be setting the stage for a retirement crisis.
In November 2021, an EPF news release warned that in the wake of more than 100 billion ringgit in early disbursements since March 2020, a majority of EPF members had too little remaining in their EPF accounts to avoid poverty in retirement.
That news release highlighted the hit to Malaysia’s politically powerful Bumiputera Muslim majority, noting that “4.4 million or 54% (of) Bumiputera members now have less than 10,000 ringgit, and 2 million or 25% have less than 1,000 ringgit.”
Even so, on March 16, Malaysia’s prime minister, Ismail Sabri bin Yaakob, suggested that the needs of Malaysians to save up for retirement had to be balanced with the “needs of the day.”
An EPF spokeswoman Monday said there was no update to share at present on what the coming 40 billion ringgit withdrawal would mean for the account…