Allow partial EPF withdrawal now

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Our fund is just so huge that the natural momentum is we’re going to be hitting RM1 trillion in assets under management within the next few years.
–Tunku Alizakri Alias, CEO of EPF

This time, I am on the side of Umno Youth.

I stand in total disagreement with Tan Sri Muhyiddin Yassin in disallowing Employees Provident Fund members to withdraw their savings from the EPF Account 1.

The prime minister’s reason: It will lead to financial difficulties later. There will not be enough savings for their retirement.

I can understand this. EPF savings are meant for be used after one retires and is no longer working without a monthly income.

However, the proposal was only for a small fraction of RM5,000 or RM10,000 of their savings in Account 1.

Last week, Umno Youth chief Datuk Asyraf Wajdi Dusuki urged the government to allow the public to make the partial withdrawal, saying that this is to ease financial difficulties in the current Covid-19 pandemic.

“The fact is, many people are suffering and have voiced their difficulties of living through the pandemic that directly impacted their daily survival”, he said.

Asyraf suggested that contributors be permitted to withdraw at least RM5,000 and a limit could be set at RM10,000.

I would go even further than that. I think allowing a 10 percent withdrawal at this unprecedented difficult time is not only necessary but urgent.

Muhyiddin has stated the obvious — people will face financial hardship later.

Hello, are the people not facing financial difficulty now? How many hundreds of thousands have lost their jobs since April? How much longer can they survive on their meagre savings?

We understand it would be too much to expect the government to allow EPF withdrawals every time there is a national crisis.

But this is not a case of “every time” – this is a very extraordinary period with the worst pandemic ever to confront the human race. This is not only a national crisis, but a global one of epic proportions.

We have never been under a national lockdown until now. We were unprepared for this worst health crisis which has taken its toll on the financial health of the nation too.

The economy is expected to deteriorate; more businesses will shutter and retrenchment figures are frightening. Employment is almost zero.

As I write this, I read that 2,000 Malindo Air employees will be laid off with minimal benefits. Malaysia Airlines, AirAsia and Malindo Air are among the airlines that have seen debt-structuring efforts and layoffs as they struggle to keep afloat.

I do not think it is unreasonable to allow a 10 percent withdrawal. Let me explain.

Let’s take the case of a 40-year-old company executive with three kids who has RM200,000 in EPF savings. Allowing him to take out RM20,000 is reasonable.

Let’s say he lost his job six months ago. By now, he would have spent most of his savings. What do you expect him to do next? Who can he turn to for help?

Probably, he would not be entitled to Prihatin. So, do we expect him to beg from family or friends (who are possibly in the same boat) for help? Or to sell nasi lemak, goreng pisang or char kuey tiaw by the roadside?

This is no laughing matter. Many have turned to such menial work just to put food on the table for their children. We salute such caring and responsible parents.

For the EPF member, worrying about not having enough for his retirement is the last thing on his mind. He needs money to ensure that he and his family survive now, not later. Can we not understand that?