Early withdrawals from Malaysia's Employees Provident Fund to help participants cope with the economic fallout of COVID-19 have reached 145 billion ringgit ($32.6 billion), undermining retirement preparedness in the country, according to parliamentary testimony.
Since early 2020, Malaysia's government has provided participants in the Kuala Lumpur-based national defined contribution system four successive opportunities to dip into their retirement savings to help cover basic needs.
In Upper House testimony Monday, Deputy Finance Minister Shahar Abdullah said withdrawals from the 1.01 trillion ringgit EPF, together with a shortfall of 10 billion ringgit from a temporary reduction in participant contribution rates, had left the country's Bumiputera, Muslim-Malay majority particularly vulnerable.
Two months after the latest early access program's April 30 close for withdrawals from participants' accounts, 6.6 million of the 12.8 million EPF participants under the age of 55, or 52%, had retirement savings of less than 10,000 ringgit, Mr. Shahar said. Bumiputera participants accounted for three-quarters of that total.
Just less than half of that 6.6 million, or 3.2 million participants below age 55, had less than 1,000 ringgit in their retirement accounts as of June 30, with Bumiputera participants accounting for more than four-fifths of that total, he said.
