Post Budget Comments The Employees Provident Fund (EPF)

The EPF notes the federal government’s fiscal reform initiatives with the tabling of 2015 Budget in the context of a challenging and uncertain economic environment.
EPF Head of Economics and Capital Markets, Nurhisham Hussein said, “The 2015 Budget shows a fine balance between delivering fiscal prudence with a sensitivity and responsiveness to the needs and aspirations of Malaysians.
“In view of the rapid increase in property prices, the middle and low income earners have had difficulty in obtaining affordable housing and home financing. In response to this, the EPF welcomes the introduction of the Youth Housing Scheme (Skim Perumahan Belia) for first-time home buyers.”
He added that since relying on EPF savings solely would not be enough to support the majority of members' basic retirement needs, the EPF felt that the scheme would enable youths to diversify their investments and prepare for their retirement.
To ensure the smooth implementation of the YHS initiative, EPF members can withdraw from their EPF Account 2 via the Housing Withdrawal facility for house purchases. Members can also opt to apply for Withdrawal to Reduce/ Redeem Housing Loan to reduce their housing loan balances or to be utilised for their monthly repayment instalments. The implementation mechanism for the withdrawal will be announced in due course.
Over the longer term, Nurhisham said the EPF is increasingly concerned over the impact and costs of the ageing of Malaysian society. The ratio of those aged 60 and above in the population will more than double from 7.8% in 2010 to 16.3% in 2040. Increasing longevity comes with challenges in terms of adequacy of retirement income, healthcare support and other issues related to ageing.
“In this context, the EPF feels there should be a holistic plan and infrastructure to coordinate and synchronise the delivery of social security initiatives at a national level. The EPF looks forward to working with the government to achieve this.”