EPF looking for feedback on full savings withdrawal age

KUALA LUMPUR: The Employees Provident Fund (EPF) yesterday opened consultations on several proposals designed to address issues related to the inadequacy of retirement savings among members for the long term.
EPF chief executive officer Datuk Sharil Ridza Ridzuan said through the members consultation exercise, the fund is seeking a consensus on the issue concerning the alignment of the retirement age determined by the government and the age for full withdrawal of savings.
Sharil said members will be asked to consider whether they prefer to have:
» to extend the full withdrawal age from 55 to 60 years on a staggered basis over 15 years or
» to maintain the current withdrawal age at 55 years and introduce 60 years for those working past the age of 55.
EPF contributors can give their feedback via myEPF portal through their i-Akaun from April 21 for two weeks.
Explaining the first option, Sharil said the staggered basis is where the age for full savings withdrawal will be gradually increased by one year, every three years.
This means the full withdrawal age of 55 in 2016 will be increased to 56 in 2019, 57 in 2022, 58 in 2025, 59 in 2028 and age 60 by 2031.
The second option, Sharil said, will retains the current age of full withdrawal at age 55, but those who work past that age can continue contributing and withdraw at age 60.
“EPF members will also be asked to comment on a proposal to introduce additional contributions for members whose wages are below the monthly minimum wage,” said Sharil, adding that it is aimed at addressing the issue of a large portion of the population whose contributions are lower than they should be under Minimum Wage laws.
Other scheme enhancement initiatives being considered are to extend dividend payments from the age of 75 to 100 years, and introdue Shariah-compliant retirement savings in addition to the existing retirement savings scheme.
“The options are to address the issue of inadequacy of retirement savings among EPF members for the long term,” he said.
“According to our statistics, 78% of active members at 54 have not achieved the basic savings of RM196,800 and 68% of EPF members at 54 have savings lower than RM50,000,” Sharil added.
EPF contributors can give their feedback via myEPF portal through their i-Akaun for two weeks from today.
Sharil said the EPF board will make a decision on the full retirement age based on the members’ feedback on these proposals.
“The decision will be easier to make if the feedback received from members skewers to be extremely negative or positive. We will bring it to the board before presenting it to the government. Only after this the decision reached would be announced,” he added.