The decision to stop Employees Provident Fund (EPF) contributors from withdrawing their savings via its i-Citra programme has been lauded.
PETALING JAYA: The decision to stop Employees Provident Fund (EPF) contributors from withdrawing their savings via its i-Citra programme has been lauded.
Malaysian Trades Union Congress acting president Mohd Effendy Abdul Ghani said if more i-Citra withdrawals were allowed, people would have to work longer to restore their savings for their retirement.
“Almost half of the members (numbering 6.1 million) have less than RM10,000 in savings and most of them want to withdraw the money to pay debts and cover business losses.
“The government should continue to provide additional assistance to small traders, including grants, subsidised loans and credit as part of stimulus packages either through banks or government agencies.”
Third Age Media Association founding president Cheah Tuck Wing said the government should have stopped such withdrawals earlier.
“When times of crisis come, why do people have to withdraw their money? The government should have allocated money to help the rakyat in times of an emergency and not ask them to withdraw money from their retirement savings.”
In a statement recently, EPF said further withdrawals from the i-Citra scheme will no longer be allowed as this would affect its position as a provident fund and trustee to the retirement future of its members.
Within the category of those with less than RM10,000 in savings, EPF stated that 3.6 million have less than RM1,000 in their account, levels at which it would be impossible for them to plan their retirement.
Cheah said instead of i-Citra, the government should study whether they should introduce a universal pension scheme or a basic income.
“The government can provide a minimum of RM600 every month as a life pension to those who really need it, especially those in the B40 group for their social security,” he said.
Meanwhile, economist Tan Sri Ramon Navaratnam said the government should think of a long term solution for the rakyat to compensate for the discontinuation of i-Citra withdrawals.
“What would the authorities do if they have to face the same situation as the people are facing now?”
Ramon said while he agrees people should be able to withdraw their EPF savings, he also urged the government to come up with better safety nets than the ones available.
“The rakyat are still underpaid and thus many have low personal savings or do not have savings that are enough to keep them afloat. Hence, many of them end up (dipping into) their retirement savings from EPF, which in return paints an unpleasant picture for their future,” he added.
“The government must compensate by having better long term solutions rather than short term ones. Implement better aid for the people so that when crises like the floods happen, they have a safety net to sustain themselves.”
Ramon also stressed that the government should stop spending on lavish projects and find a way to reduce corruption.