Full withdrawal age stays at 55, extending to 60 possible, says EPF
The Employees Provident Fund (EPF) has no intention of revising the age for full withdrawal by members from its current 55, despite the minimum retirement age being increased to 60, Bernama reported today.
In a statement released today, EPF said that ideally, the age for full withdrawal needs to be harmonised with the minimum retirement age as the savings are meant for retirement.
However, EPF said it was looking into the matter and will wait further input and feedback from stakeholders and members before making a decision.
"Hence, at this point in time, the withdrawal age of 55 remains unchanged," the statement read, according to Bernama.
Meanwhile, the Congress of Unions of Employees in the Public and Civil Service (Cuepacs) called for the government not to accept any proposal from the EPF to increase the age for withdrawal of full retirement savings to 60 years.
Cuepacs president Datuk Azih Muda said the age limit to withdraw ones savings should not match the official retirement age because not every employee retires at the age of 60.
"Currently, there are pensioners who chose to retire at the age of 58. How about them? Do they also need to wait another two years to withdraw their savings?
"The age limit to withdraw savings should match their personal retirement age or sooner, so as to give them an opportunity to use the money to do things like buying a house or performing Hajj," he told Bernama in Kuala Lumpur today.
According to Bernama, Prof Dr Mohamed Aslam Haneef, the Economic Faculty lecturer at International Islamic University of Malaysia, also agreed that any proposal to increase the minimum full withdrawal age needed to be refined, because the five-year difference for withdrawing funds would not bring significant difference to the total amount.
He added that he understood the move could probably be to ensure the savings "lasted longer" but it may not necessarily succeed ultimately if it was still spent without prudence by the contributors.
"It is understood that there are many EPF contributors with savings of less than RM50,000 and are likely to finish their savings between the first and fifth year of their retirement," Bernama quoted him as saying.
Prof Aslam said more could be done to help the contributors, especially those from the lower income group, including "intervention by relevant parties" to increase their income bracket.
"Those with lower income can only contribute a small amount to the EPF until their retirement. If their income increased, so would their savings amount in EPF."
He also advised the public to contribute more to their own personal savings or use investment channels available in the market instead of relying solely on their funds in EPF for their retirement.
"At age 55, even if someone received an EPF fund of roughly more than RM100,000, they would not be able to live comfortably with that amount because it would be insufficient to bear the expenses during their retirement.
"The best way is to have other savings and to save or invest at least 10 percent of their net salary," he said, according to Bernama.
As of September this year, 68% of EPF members aged 54 had less than RM50,000 in savings, while only 33% met the basic savings level – a minimum of RM196,800 – in order to provide for a monthly income of RM820 over a 20-year period. – November 17, 2014
