KUALA LUMPUR: The Employees Provident Fund (EPF) is set to launch two facilities, i-Sayang and i-Lindung, next year as part of its effort to improve the wellbeing of Malaysians amid the Covid-19 pandemic.
Chairman Tan Sri Ahmad Badri Mohd Zahir said the i-Sayang facility would be launched in the first quarter of next year, which would allow for the voluntary transfer of 2% EPF contributions from the husband’s account to the wife’s.
Another launch by the country’s largest retirement fund next year would be the i-Lindung facility, which would allow withdrawal from Account 2 to purchase life and critical illness insurance through the EPF platform.
“Other initiatives we are exploring include the gradual approach towards mandating legal EPF coverage to non-agriculture informal sector workers.
“We will also be advocating our voluntary excess scheme where members can compel their employers to increase their EPF contribution to more than the 11% statutory rate,” Ahmad Badri said in his opening speech at the International Social Wellbeing Conference (ISWC) 2021.
The two-day ISWC 2021 was officially launched by Prime Minister Datuk Seri Ismail Sabri Yaakob yesterday.
It is worth noting that EPF has launched three Covid-related withdrawal programmes namely i-Lestari, i-Sinar and i-Citra during the pandemic. As of Oct 31 this year, a total of RM101.1bil had been withdrawn under these three programmes.
EPF building
As such, Ahmad Badri highlighted that the amount withdrawn under these Covid-19-related withdrawal programmes is equivalent to 22% of the total RM530bil of the government stimulus programme.
That said, he conceded that these withdrawals have worsened the situation for EPF members as they face the risk of having insufficient savings for retirement.
“The situation is that 48% of EPF members below age 55 have critically low EPF savings. This is a 28% increase in members reaching critically low EPF savings from before the pandemic.
“The median savings for all EPF members below age 55 stands at RM13,000, which translates to RM54 a month for their retirement years.
“Whereas the median savings of EPF members at age 54 is at RM38,000, which translates to RM159 a month for the next 20 years,” Ahmad Badri explained.
Ahmad Badri disclosed that only three out of 10 adults in Malaysia are covered by some form of social protection including government pension scheme and EPF coverage.
This translates into 7.5 million out of the 23.5 million working age population in the country.
Ahmad Badri said the pandemic has also shifted the employment landscape towards informality, with the growth of the self-employed and informal bracket expected to increase from the current 5.7 million to 8.8 million in 2040.
For EPF members to recover the loss of savings from Covid-19-related withdrawal, he estimated that they would need to work an additional four to six years.