Recently there was a proposal to extend the full withdrawal age of our Employees’ Provident Fund (EPF) savings from age 55 to 60. However, the prime minister has quite quickly announced that the withdrawal age should remain at 55. Then a survey was done to gather the views of contributors and the general consensus was to maintain the withdrawal age at 55.

EPF is a ‘retirement saving fund’, at least this is what is stated in EPF’s vision statement. It did not say money in EPF should be prematurely withdrawn for other purposes, although the fund has allowed earlier withdrawal for medical reasons, purchase of homes, computers, et cetera.

EPF’s mission statement is to ‘provide the best retirement scheme’. Again it did not say contributors could withdraw part of the savings to invest on their own in unit trusts and other forms of investment as being practised now.

With working age extended to 60 and beyond and with life expectancy getting longer, I think it is natural for us wanting to take a relook at the withdrawal age. But apparently this is not to be. Most contributors are just very eager to take their money out from EPF upon reaching 55.

There are probably various reasons for this. Some are probably very much in need of money now than to worry about their golden years. Some think they could invest and get better returns than EPF. Some probably don’t trust EPF to hold on to their money even for one extra day.

To me, extending the withdrawal age should not be an issue if retirement age has been extended and life expectancy has become longer. If we live longer, we probably have to work more years and have bigger savings to cater to our longer life span.

Hence, the focus of debate should not just be confined to withdrawal age. To begin with, we should rightly debate whether most contributors have earned enough to set aside part of their income as compulsory savings in EPF.

Then, we should also focus on whether EPF has allowed too many premature withdrawals for various needs when the primary objective of EPF is savings for retirement. Again this may relate to the low income level of many EPF contributors.

More importantly, I think EPF contributors must also focus their attention on EPF as an institution that is able to manage their savings reliably, prudently and profitably. EPF contributions are compulsory savings based on very long gestation period, stretching over the working span of most adults.  

Contributors (through the government, trade unions, political parties and other NGOs) must therefore monitor and demand reasonable returns of their long-term savings after taking into account inflation rates prevailing in the country over time. Many are concerned with returns unable to match with inflation rates and the increase in cost of living.

In light of recent purchase of 1Malaysia Development Berhad (1MDB) land by Lembaga Tabung Haji, I urge all EPF contributors to be ever vigilant and watchful of their money in EPF.

I think these are the issues that should dominate the debate, not just on withdrawal age. Opportunity to withdraw our EPF savings early does not mean we can live more comfortably in our retirement years. On the contrary, savings in our hands could be easily depleted if not properly managed and prudently invested.