KUCHING: Employees Provident Fund (EPF) proposed Account 3 for contributors is a good additional feature to the pension fund that can be withdrawn at any time on top of the current Account 1 and Account 2.
In stating this, Sarawak United People’s Party (SUPP) Stakan chairman Datuk Sim Kiang Chiok opined that however, it should be optional and members are allowed to contribute on a voluntary rather than compulsory basis.
Furthermore, he said, the interest rates must be higher than any commercial bank rates so that members can enjoy a better return for this Account 3 to work.
“This Account 3 should be an alternative to the commercial bank saving account that will get all working Malaysians an alternative way to save at a better saving rate.
“The interest rates should also be paid on a daily rather than yearly basis,” he said in a statement today.
Touching on the mandatory monthly withdrawal that is only for those members born after 2010 when they retire, he said that it is similar to turning the EPF into a pension fund as compared to now which is a retirement fund with the option to withdraw all the funds, periodically or monthly after 55 and 60 years old.
“Mandatory monthly withdrawal at pension age has its advantages such as the member will not run out of money too quickly but he would not be able to withdraw all to settle his other debts or to invest in other ventures.
“Meanwhile, lump sum withdrawal might cause the member to run out of money too quickly if the retirement fund is spent unwisely, and he might have to return to the workforce due to insufficient retirement funds,” he said.
