KUALA LUMPUR, Nov 9: Finance Minister Tengku Zafrul Aziz has advised the Employees Provident Fund (EPF) to allow more contributors to withdraw from Account 1.
The minister said he held discussions with the fund’s management today and the board had said they would announce details on who would be eligible to make withdrawals.
“My advice to the EPF management is to increase the number (above the target) and give the flexibility for more contributors to withdraw,” Tengku Zafrul said in an interview with TV3 yesterday.
In the budget proposals tabled on Friday, only those who lost their jobs because of the Covid-19 pandemic would be allowed to withdraw from Account 1, which comprises the pension fund portion of EPF savings. The budget proposal was for withdrawals of RM500 a month for up to 12 months, or a maximum of RM6,000.
“Whether to increase, I will let them make the announcement. I have requested that they refine the proposals (based on feedback from Malaysians),” the minister said.
Total withdrawals from Account 1 are expected to amount to RM4 billion. Eligible contributors can apply starting January next year.
Also on Friday, EPF chief executive officer Tunku Alizakri Alias said in a statement that details on this latest facility would be provided on Nov 11.
In April, EPF had introduced the i-Lestari withdrawal facility that allowed members to withdraw RM500 a month for 12 months with a total of up to RM6,000. This facility has benefited 4.7 million members with a total value of RM11.6 billion.
Taking into account these two initiatives, the total allowed withdrawal will be up to RM12,000.
Ample room exists for the government to stimulate the economy with a debt ceiling of 60% of gross domestic product (GDP), Tengku Zafrul said in response to a question on whether the ceiling should be raised further to 65%.
“I feel this (60%) debt-to-GDP ratio is sufficient for now. By the end of this year, our debt level is expected to reach 56% of GDP,” he said. The ratio is expected to touch nearly 60% next year.
The minister said every 1% represented a debt increase of RM15 billion. “If it is raised to 65% of GDP, that will be an increase of RM75 billion. It (raising the level) really depends on how (well) we fight the Covid-19 pandemic,” Tengku Zafrul said.
The government recently increased the statutory debt level temporarily to 60% of GDP from 55%.