In a press statement, Finance Minister Tengku Zafrul Tengku Abdul Aziz said EPF would give further details on the special withdrawal in the near future, as well as necessary steps to manage the issue of diminished retirement funds faced by contributors.
There have been calls to allow for a fourth round of withdrawals by various quarters, prior to Wednesday’s announcement.
The United Malays National Organisation (UMNO), Mr Ismail Sabri’s party, has been urging the government to allow for a new round of EPF withdrawals since December last year.
During the recent Johor state election, the opposition had also called for the government to allow for another round of special withdrawals from the retirement scheme.
However, the finance minister warned in January this year that more EPF contributors would end up retiring below the poverty line if the government allowed for more withdrawals. He added that there will be future implications especially if a recession occurred.
Almost half of EPF’s contributors had less than RM10,000 in their accounts, he stated at that time.
On Mar 14, the minister said in parliament that without the three previous withdrawal schemes, the EPF’s dividend for conventional savings in 2021 could have reached 6.7 per cent. Currently, it has dropped to 6.1 per cent.
He added that another round of withdrawals capped at RM10,000 could see an estimated RM63 billion taken out by the 6.3 million eligible contributors.
This, he said, would force the EPF to rebalance its portfolio by selling off more overseas investments and halting domestic investments in the short to medium term to accommodate the withdrawals, resulting in serious implications in the long-run.