LETTERS: It was announced during the 2021 Budget tabling that eligible Employees Provident Fund (EPF) members can withdraw up to RM6,000 from Account one (1) next year.
Eligible and very specific members are allowed a monthly withdrawal of RM500 for a period of 12 months.
The fund withdrawal from account one (1) of EPF is to help the economy for low-income group (B40) of entitled members to ease their financial burden in the middle of economic impact of the Covid-19 pandemic.
This should be considered as a last resort to allow people to be financially independent during the trying times to get an instant cash.
However, this is the short-term relief at the expense and the withdrawal is in the short run effects only because when they get the money, they will spend.
The main objective of EPF is for long term retirement benefit. So that, if the members can withdraw the money, it will reduce their savings and the savings is not enough to support themselves when they retire.
Meaning, this is a negative impact for small EPF savings because they have nothing left if they draw their money.
Moreover, after a few years, EPF will lose more capital and consequently they cannot invest to generate income and gain more money to give more dividends for members.
The members of EPF should be responsible over their financial situation. They must plan their expenses. They must know how long they could survive in an event of unemployment or salary cut.
Those in critical situations, they can apply for targeted moratorium by visiting the related bank to rescheduling and restructuring of a financing. They also can seek help at the Credit Counselling and Management Agency to find the solution.
As a conclusion, besides the government allowing the EPF members to draw their money, the government should also find a way to improve or enhance the people's earnings.
One is by continuing to create job opportunities. Another that should be considered is by offering more subsidies to employers to allow workers take home a full salary and not endure pay cuts.
WAN ZAWIYAH WAN YA'COB
International Islamic University Malaysia
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times