KUALA LUMPUR, April 4 – Minister of Economy, Rafizi Ramli presented four reasons why the government remains with the stance of not allowing the withdrawal of contributions to the Employees’ Provident Fund (EPF) on a targeted basis. He said, among them, the EPF was created to ensure that contributors have savings in their old age. He said, even if the contributor dies, the savings will be given to the heirs. Contributors may withdraw money for today’s needs but the EPF was created to ensure that workers and Malaysians have savings in their old age.
Even if we die tomorrow, the savings and contributions in the EPF will go to our heirs, he said in a post on Facebook on Monday. Rafizi explained, although the EPF withdrawal demand if allowed can be seen as a government program, it does not actually involve government money or efforts, instead it will reduce old age savings from the people’s own contributions. In the past two years, a total of RM145 billion in EPF contributions was allowed to go out by the previous administration.
“When this fund shrinks, it will limit the EPF’s ability to diversify and strengthen its investment strategy in order to get better profits,” he explained. Commenting further, Rafizi who is also a Member of Parliament for Pandan explained that withdrawals will also affect other contributors even if they do not withdraw EPF money because the overall return will be low. If the overall EPF return is low, then other contributors will also bear the impact, in a situation where most of the contributors do not have sufficient savings for old age.
“For that reason, as announced in the 2023 Budget by the Prime Minister, Datuk Seri Anwar Ibrahim, the government’s action instead is to increase contributions and savings for old age to EPF contributors. It is not to allow the withdrawal as demanded by a few contributors,” he said. He added that the government is responsible for protecting the people, especially those at risk such as EPF contributors. So that’s why we choose a path that brings good to all, not a short path simply to gain temporary political popularity, but leave the problem to other leaders in the future to solve,” he said.