Thursday 07 Dec 2023
By /
main news image

KUALA LUMPUR (March 4): The median savings of the Employees Provident Fund’s (EPF) Bumiputera and Indian members have dropped significantly, following the multiple Covid-19 pandemic-related withdrawals totalling RM145 billion over the past two years.

Bumiputera EPF members saw a whopping 70% drop in median savings to RM4,900 as at December 2022, from RM15,500 as at April 2020, while Indian EPF members’ median savings declined 40% to RM14,900 from RM25,700 during the same period, said EPF chief executive officer Datuk Seri Amir Hamzah Azizan at a media briefing to announce the fund's 2022 financial performance on Saturday (March 4).

“The Chinese community is pretty well grounded as they continue to contribute to their retirement savings," he said.

Chinese EPF members' median savings stood at RM45,200 as at December 2022, down 1% from RM45,800 as at April 2020.

"For us, we cannot allow more withdrawals, because the base has now gotten too low for some groups," said Amir Hamzah.

In terms of income groups, Amir Hamzah said the median savings of EPF members in the bottom 40% group (B40) were hit the most, falling 70% to RM577 as at December 2022, from RM2,434 as at April 2020. This was followed by the middle 40% group (M40), whose median savings declined 34% to RM19,926, from RM30,113 over the same period.

The top 20 group (T20), meanwhile, managed to grow their median savings by 9% to RM152,964, from RM140,440 previously.

The B40 and M40 had 5.2 million members each contributing to the fund, while the T20 had 2.3 million EPF members.

Meanwhile, Amir Hamzah pointed out that the low-wage structure is one of the factors causing inadequacy of retirement savings.

Other factors include inconsistent contributions from EPF members and low financial literacy.

“From the survey we have been running for years, we have seen that finance literacy in Malaysians remains very low," he noted.

To illustrate this point, he said EPF members' financial literacy rate stood at 29%, while Malaysians in general stood at 36%, which was lower than neighbouring countries such as Singapore, whose population had a financial literacy rate of 78%.

Edited ByKang Siew Li
      Text Size