KUALA LUMPUR, March 16 — The Employees Provident Fund (EPF) issued a stern reminder that the country could be staring at a retirement crisis just hours after Prime Minister Datuk Seri Ismail Sabri Yaakob greenlit another withdrawal facility to help people cope with the Covid-19 fallout.

The pension fund said this should be "the last” special withdrawal initiative as it reiterated its concerns around members’ retirement adequacy.

"As the country rebuilds the economy and more people have returned to work, the EPF believes that this should be the last facility allowed under the special withdrawal initiative,” the fund said in a statement.

"The EPF would like to reiterate its concerns around members’ retirement adequacy and hopes this will be a precursor towards the rebuilding of retirement savings and reforming of the nation’s social security system.”

Ismail Sabri announced earlier this afternoon that the government has agreed to allow a last withdrawal of up to RM10,000, saying the decision was based on growing public demand that the programme be extended.

This will be the fourth withdrawal after i-Lestari and i-Sinar in 2020 and i-Citra in July 2021, to meet the urgent cash flow needs of members during the periods of the movement control orders (MCO) and the subsequent economic slowdown. 

As of end 2021, a total of RM101 billion had been withdrawn under the first three facilities.

EPF said application for the special withdrawal facility will be opened to members below age 55 starting April 1, 2022 and ending on April 30, 2022, while payment will commence before April 20, 2022.

Members are allowed to withdraw a maximum amount of RM10,000 and a minimum amount of RM50, and must fully utilise their savings balance in Account 2 first before accessing their Account 1.

Today’s decision came as a surprise since Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz had indicated hesitancy to allow the withdrawal.

Another one-off RM10,000 facility could amount to RM63 billion if all 6.3 million eligible were to make the withdrawals, the minister told the Dewan Rakyat on Monday.

The EPF recently announced a 6.1 per cent dividend for conventional savings for 2021, one of the highest to date, but Zafrul said it could have been as high as 6.7 per cent if previous unprecedented Covid-19-related withdrawals were not allowed.

This would have meant RM5.4 billion in terms of additional dividend could have been distributed among EPF members.

Umno president Datuk Seri Ahmad Zahid Hamidi and his ally, former prime minister, Datuk Seri Najib Razak, have been pushing for the RM10,000 withdrawal, making it a campaigning issue at the recently concluded Johor state election, where the party won with a supermajority.

Ismail Sabri is Umno vice-president.