By G. Sharmila
The PM’s announcement last Thursday that the full withdrawal age limit would remain at 55 caught the public by surprise, as EPF was just two days into its online public consultation process on the withdrawal age options. Tiger thinks that the PM jumped the gun, thus undermining EPF.
According to the laws of the jungle, only the strongest survive. However, despite that, each species of animal has a different role to play and that role is respected, be it prey or predator. It’s a law that is respected by all in the animal kingdom and that is how peace among animals prevails.
This doesn’t always apply to the human world, however. No, in the homo-sapien realm, power often overrides designated responsibility and Tiger fears that this has now happened to the Employees Provident Fund (EPF), long respected for being relatively autonomous and for “keeping its hands clean”.
Tiger is talking about no other than the prime minister’s (PM) announcement last Thursday that the full EPF withdrawal age limit would remain at 55, with an option for EPF members to withdraw their money at age 60 if they so wish.
The PM supported his announcement with the fact that over 90% of 50,000 EPF members had voted for this option as of Thursday, which is the second option offered by EPF under its online consultation process. The first option involves gradually increasing the EPF full withdrawal age from 55 to 60 on a staggered basis over a 15-year period, going up by a year every three years.
Now, it may seem that the majority of EPF members want to get their money out at 55, but one has to remember that EPF has 6.66 million active members. By making the announcement before the process is concluded, the PM may have just swung the majority to his way of thinking, thus altering the results of what should have been a neutral public consultation process. Why not wait until the process is over, then make an announcement? Surely that would make more sense?
At the end of the day, it may very well turn out that the majority of EPF members see the light and want their money kept with EPF until they turn 60. If so, what then? Will the PM be forced to retract his endorsement of a mere 50,000 members when millions prefer the first option? Tiger thinks it very unlikely. In fact, she has a sneaky suspicion that the Ministry of Finance (MOF) may just pressure EPF to go ahead and allow the withdrawal age to remain at 55.
This is where Tiger thinks that EPF should be allowed to assert itself and be allowed to do its job without interference. What EPF is trying to do is help its members with retirement planning and it has the numbers to strongly support the need to increase the withdrawal age limit to 60.
If you’re an EPF member who had participated in the online consultation, doubtless you would have seen the scary statistics. To recap, according to EPF, 68% of members aged 54 have savings lower than RM50,000. Furthermore, 50% of EPF members above age 55 have exhausted their EPF savings in five years.
Sure, retirement planning should begin at a much younger age so you don’t end up becoming a statistic. This is the approach the PM should have taken; he should have advised EPF members to start saving early and keep their money for as long as they needed to in order to have a comfortable retirement.
If anyone should be advising people on retirement, it should be EPF itself and it should be given the freedom to do so, without other members of government (yes, even the PM himself) intervening.
The EPF is there for a reason – it is there to help a sizeable number of the Malaysian public to enjoy a comfortable retirement. Stripping EPF of its role via populist announcements is a no-no, because people (in particular, EPF members) will only suffer in the long run despite gaining the short-term satisfaction of status quo.
Tiger would like to ask MOF to let EPF continue doing its job and not interfere with the roles of the agencies it has trusted these responsibilities to. Empower them, Tiger says, and all will go smoothly.
GRRRRR!!!
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