Govt Yet To Decide On Allowing EPF Savings To Settle Credit Card Debts

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KUALA LUMPUR, Dec 23 – The government has yet to decide on allowing contributors to withdraw Employees Provident Fund (EPF) savings to settle their credit card debts, the Dewan Negara was told on Tuesday. Finance Deputy Minister Datuk Chua Tee Yong said the principle of EPF as a social security organisation was to provide retirement savings for members.

“A contribution in EPF Account 2, which is in pre-retirement category can be withdrawn only for specific purposes such as health, housing and education. If there is demand to withdraw EPF savings for another purpose, we are worried it will effect a sufficient amount (of the fund) for their retirement,” he said.

Chua was replying to Senator Datuk Goonasakaren Raman who wanted to know whether the government allowed EPF saving withdrawl to settle credit card debts. EPF has fixed 70 per cent contribution of the fund for Account 1, while another 30 per cent was for Account 2.

However, Chua said the government had formed the Credit Counselling and Debt Management Agency (AKPK) to help individuals who had financial management problems by providing advice and a suitable repayment plan. As of September this year, the deputy minister said more than 141,000 borrowers had been registered and assisted under AKPK’s debt management programme.

Meanwhile, he described the mindset that credit card application process was easy as inaccurate because according to statistics, the approval for credit card application were between 40 to 50 per cent. He said the process was in line with conditions regulated by Bank Negara Malaysia to take into consideration the total income of an individual and the number of credit cards requested.

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