According to a report presented in the Dewan Rakyat on Nov 29, 94,827 out of 274,715 EPF members aged 54 have less than RM10,000 in their savings, which accounts for about 35% of the total members in that age group. On the other hand, 4,877 members, approximately 2%, have more than RM1mil in their respective accounts. The combined savings of the 35% amounted to just RM246.1mil, while the 2% had combined savings of RM7.9bil.
Further details provided included the breakdown of savings based on different ranges. 8% of members had savings ranging from RM10,001 to RM20,000, while 13% had RM20,001 to RM50,000, and 12% possessed RM50,001 to RM100,000. Additionally, 13% had savings ranging from RM100,001 to RM200,000, and 4% had RM500,001 to RM1mil in savings.
During questioning, Dr Dzulkefly Ahmad highlighted that low retirement savings is a significant concern among Malaysians. He noted that only 16.5% of the workforce paid individual income taxes, emphasizing the importance of addressing the issue. In response, Deputy Finance Minister Steven Sim acknowledged that the low EPF savings is a longstanding problem that needs structural reforms. He mentioned EPF’s efforts to provide other channels for contributions, such as voluntary contributions where members can put up to RM100,000 a year in savings.
Sim also highlighted initiatives by the government to increase contribution limits for programs like i-Saraan and i-Suri. Additionally, there was a discussion about the proposed third EPF account, with an announcement expected in February following EPF’s dividend declarations. The third account, also known as the flexible account, would allow savings withdrawals to be made at any time to meet potential emergency cash needs. Currently, the EPF savings scheme consists of Account 1 and Account 2, divided based on a 70% and 30% ratio, for members under 55.
