KUALA LUMPUR, Feb 16 — The Employees Provident Fund (EPF) needs to provide for the cash flow to accommodate any new special withdrawals, according to the Finance Ministry (MoF).

It said the EPF would need to rebalance its portfolio to account for the current cash holdings, liquidity and maturities of fixed income instruments, as well as slowing down its domestic investment activities.

"This will cause constraints in undertaking new investment opportunities and will have a direct impact in terms of potential long-term returns as well as income-generation opportunities for future dividend payouts to members,” MoF said in its written reply posted on the Parliament website today.

The ministry was responding to Tan Sri Muhyiddin Yassin’s (PN-Pagoh) suggestion that the government consider allowing targeted EPF withdrawals to ease the people’s burden.

MoF said the four special withdrawal facilities introduced during the Movement Control Order period had led to a drastic drop in the percentage of active members who met the basic savings threshold (RM240,000 at age 55) from 36 per cent in 2020 to 29 per cent at the end of 2022.

Any further targeted or blanket withdrawal scheme would worsen the situation of insufficient retirement savings which is already at an alarming level, it added.

On EPF’s investment opportunities, MoF said economic indicators show that economic activities are recovering with businesses starting to operate fully and a large number of workers returning to work to earn income.

It said there has been significant growth in members and employers that are actively contributing, member and employer registrations, and total contribution as of December 2022.

Last year, the number of new members registered surged to 635,989 members from 421,643 in 2021 while that of new contributing employers increased to 93,669 from 72,518 previously. — Bernama