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The Malaysian Trades Union Congress (MTUC) Sarawak division’s proposal to extend the Employees Provident Fund (EPF) withdrawal age from 55 to 60 to be in line with the minimum retirement age has attracted hundreds if not thousand of responses from all segments of society.

While some of the comments are positive, most, especially in the social media, are overwhelmingly against the extension. Some of the comments are quite emotional.

“EPF is my money, I can do whatever I want with it. If I lose it at a casino, it is my problem. MTUC don’t play god.  I don’t want EPF to squander away money.”

It appears that the strongest comments came from those who are nearing 55 now and have plans to withdraw. This is perfectly understandable.

That is why MTUC has proposed a grace period of five years to allow this group to withdraw. Those currently aged 50 and above can still withdraw when they reach 55.

For those who need part of their funds or plan to retire earlier than 60, the existing 50 years withdrawal scheme can remain at 50 or be extended to 55. This would give the flexibility to contributors. However those who start work this year do not plan their retirement savings due in 2055!

From the comments it is also clear that most people want to withdraw as soon as they can because of a general mistrust of the government and fear that their hard-earned money with the EPF may disappear when they retire.

We must seriously address government governance and ethical issues, but the indisputable fact is that not a single eligible contributor has been denied EPF withdrawal in the past 60 years.

Saying it is your own money is not quite correct because employers contribute as well. To claim that we can do whatever we want with it should logically mean we should also be able to withdraw at any age, not just 55.

Imagine a 25-year-old can withdraw to buy a iPhone 8 1/2. Don’t laugh. There was once a demand to allow withdrawal to buy computers, even to clear their bankruptcies. The irony is that the EPF Act protects EPF savings from bankruptcy proceedings - meaning that your creditors cannot touch your money.

Similarly, should we also be given the freedom whether to contribute every month? Given a choice, most people would not want to contribute to EPF, mainly because their salaries are so low, they need the cash every month to cover the rapid increase in cost of living.

Employers will be jumping with glee - because they then do not have to contribute their share. To simply state that EPF is my money and I can withdraw anytime would mean that employers are very reluctant to increase their share. We will be cutting off our nose to spite our face.

Savings are low because salaries are low

We agree that EPF savings are low because our salaries are low. MTUC and unions are fighting a difficult battle. Under Dr Mahathir Mohamad, even union leaders had been detained under the Internal Security Act (ISA) for fighting for higher salaries. The Government Trade Unions Act is so restrictive that only 2 percent of private sector employers are unionised. Employers also employed union-busting tactics with impunity.

Low wages must be addressed but we still need to put some aside so that we do not retire in destitution.

The introduction of the minimum wage is a small step in the right direction and there is still a long way to go. The retirement age of 60 was another significant milestone to provide Malaysian with a more comfortable retirement.

EPF has also recently increased employers’ share for those who earn less than RM5,000 from 12 percent to 13 percent.

It seems that quite a lot of us make emotional decisions when it comes to our own money and are our own worst enemy. So it actually reinforces our belief that we need to extend the withdrawal age. The fact that most of us want to withdraw as early as possible does not mean it is the right thing to do. We cannot depend on our children as they can hardly make ends meet. Neither should we depend on Bantuan Rakyat 1Malaysia (BR1M).

Financial protection in our old age is a serious matter. We must approach it in a rational and holistic manner and we must display responsible leadership on the issue.


LAW KIAT MIN is general-secretary, Sarawak Bank Employees’ Union.

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